Savers Need To Get Paid Again

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Just an interesting article I came across.

Savers Get Paid Again​

Posted November 22, 2022 by blair

Cash is back! It was only a year ago that people were so desperate for yield that the Wall Street Journal asked me if savers should put some of their home down payment savings in the stock market. Now we have high-yield savings accounts topping 3%. Three-month Treasuries are yielding 4.4% and 12-month paper is near 4.75%. These yields could top 5% if the Fed raises rates again in December as expected. Savers are getting paid again. What a sweet relief to the decade-plus of ZIRP policies (zero interest rate policy).

I remember 5% CDs (certificates of deposit) in the early aughts. Back then, Suze Orman still pined for 8% money market rates on afternoon talk TV. When I learned about the risk-free rate in college, the long-term average was 3%. But for more than 12 years, the Fed Funds rate was below 3% and for most of that time near zero. Zero-interest rate policy began after the Great Financial Crisis and only ended with the September Fed hike. Europe even toyed around with negative interest rates for a while. It was wild.

ZIRP is not the normal state of the monetary system. Where we are today is normal. Savers should be paid to wait, and the risk-free interest rate should not be zero. That was insane. Everyone got so high on the supply of free money that we forgot the basics of how money works. Unwilling to park cash in zero-interest savings accounts, investors went on a mad dash of risk-taking.

Full article:

Savers Get Paid Again

Cash is back!
blairbellecurve.com
 
Everyone got so high on the supply of free money that we forgot the basics of how money works
Click to expand...
Oh boy. The author of that article probably doesn't even realize the irony of his statement being true but not for the reason he intended.
 
Didn't want to start a new thread so here we are. Interesting read.

Alasdair Macleod: The benefits of a savings culture​


JANUARY 6, 2023

Guest post by Alasdair Macleod from GoldMoney.com:

Savings are a vital component of any successful economy, and the foolishness behind the paradox of thrift is exposed in this article. It has been a huge error for Keynesian policy makers to discourage savings in the interests of temporary boosts to consumerism.

It is probably too late now but encouraging people to save by removing all taxation from savings makes an enormous contribution to reducing price inflation and trade deficits, while enhancing national wealth. This is evidenced empirically and demonstrated by reasoned theory.

Furthermore, there is an error in assuming that there is no alternative to Triffin’s dilemma, which posited that for a nation to produce a meaningful level of reserve currency for external circulation it must run trade deficits. Triffin was describing the problems the United States gave itself under the Bretton Woods agreement, leading to the failure of the London gold pool in the late sixties. It still informs US policy makers today, and wrongly leads American commentators to believe that the dollar cannot be toppled from its pre-eminent position.

Full article:

Alasdair Macleod: The benefits of a savings culture - Dollar Collapse

Guest post by Alasdair Macleod from GoldMoney.com:
www.dollarcollapse.com
 
But they don't want you to save.... they need money to lubricate the debt-based economy.

Saving money is like saving your engines oil. It needs the oil to keep running.
 
Saving cash, right now, is a losing proposition.
Banks are paying diddly squat as far as interest rates go.
The "official" inflation rate is currently at 7%, while Shadowstats says it's actually closer to 12%
 
Many of you don't remember the interest rates of the Carter administration. I could and will get higher than that, I've said for years it will happen until implosion. AKA Wiemar Republic. You can have all the interest you want as the dollar sinks to a some negative, Better have gold, silver land and guns.
 
Allianz conservative is 10% upside with 100% downside protection for Jan contracts

t
 
I had a CD paying 16% in the Carter years!
 
At one time CD rates were damn good.

Certificate of Deposit Rate History

Understanding the certificate of deposit (CD) rate history over the past few decades can help you manage your expectations when shopping for a CD today.
www.thebalancemoney.com

Not so much now but they are climbing.
 

I remember. I'm cursed with a good memory. I was a very young man who voted for Carter in 1976. I had just turned 18 and it was the first time they allowed 18 year old people to vote. Before that it was age 21. I joined the Navy about a year later. I wasn't long before everything turned to sh!t, and I LEARNED the error of my ways. Gas lines, double digit inflation, interest rates, & unemployment. The misery index was a nightly feature on the News. I learned a lot from some old salts in the Navy. Voted for Ronald Reagan twice. After the Navy I was fortunate to meet a mentor who taught me about DEBT. Even during inflationary times a dollar can go a long ways when you have ZERO debt.

"Better have gold, silver land and guns"...... the only thing I can add to this is,...... NO DEBT
 
Goldhedge said:
But they don't want you to save.... they need money to lubricate the debt-based economy.

Saving money is like saving your engines oil. It needs the oil to keep running.
Click to expand...
Being in debt puts you at their mercy.

If they say, for example, you MUST get a medical procedure, which they do NOT say, but which you can see, is experimental, very dangerous, and perhaps even malevolent and part of a genocide....

...if they require it for you to keep your job, and you're up to your ears in debt...you do it.

Then maybe you have a heart attack while landing the jumbo jet you fly for a living.

If, on the udder hand...you have MONEY SAVED - and not in a bank account, either, in stacks somewhere...REAL money...and your job just gets two ugly...as it has to me, three times...this even before the Great Culling...you channel your inner Johnny Paycheck and show them your hindquarters.

I've done that, and the times between jobs, in the Long Emergency (2008-present) and I had some GREAT recreational opportunities. Toured the Mountain States and the Northwest by motorcycle. Laid about drunk, during snowstorms. Hiked mountains in the sun, in the warm weather.

That is the difference between debt and savings. Between being owned, like chattel, and owning your own destiny. Between putting up with BS rules, long hours, UNPAID hours, face diapers, stupid safety rules, such as wearing only a certain brand of eye protection...and simply deciding that 72 hours a week, every week, without a break, is too much.

To me it's so obvious it's almost not worth discussing...except that it is.
 
Inflation has been mentioned quite a few times in this thread, so I decided to post Sal's vid here rather than start a new thread. Lighthearted look at preparing for inflation.

This PAPER Product FAR Outperformed Gold And Silver During Inflation​

SalivateMetal
Jan 7, 2023


Link to vid Sal mentioned in his vid:

CCT Video: https://www.youtube.com/watch?v=l6lVa...
 
Goldhedge said:
I had a CD paying 16% in the Carter years!
Click to expand...
I'm sure you felt that was pretty good but for every person admitted from those High interest rates a whole lot more American suffered. There comes a point when you got to think about your fellow American and don't play the Usery game on them.
 
Curtman said:
I'm sure you felt that was pretty good but for every person admitted from those High interest rates a whole lot more American suffered. There comes a point when you got to think about your fellow American and don't play the Usery game on them.
Click to expand...
That was a storm not of our making. Every one of us had to figure out a way to survive, or hold on.
 
Cash is no longer trash, courtesy of sharply higher interest rates. Trailing yields on risky assets are looking up too.

The source for the change in payout rates, of course, is a run of rate hikes by the Federal Reserve and other central banks around the world. The most conspicuous shift is in cash and cash equivalents, such as 3-month Treasury bills, which currently yield 4.84% as of Feb. 22.

 
Five-percent T-bill yield.

Eight-percent annual cost-of-living increase - BY THE GOVERNMENT'S JIGGERED FIGURES. True price rises, over 16 percent annually.

So, you buy T-bills, and you lose HOW much in purchasing power each year?
 

How miserly big banks are stiffing savers: They've made BILLIONS by hiking loan repayments thanks to Fed rate hike - while refusing to increase pitiful 0.15% yields on rainy-day funds​

2h ago

Three of America's biggest banks raked in nearly $50 billion from higher interest payments last quarter - yet none have raised the yields on their savings accounts.

JPMorgan Chase, Wells Fargo and Bank of America this week posted profits much higher than expected as they cashed in on the Federal Reserve's relentless interest rate hikes which have allowed them to increase the cost of taking out a loan - as well as the repayments on existing loans.

But analysis by DailyMail.com reveals they have failed to pass these high rates onto their savers - as experts urged them to look elsewhere for better returns on their cash.

JPMorgan Chase and Bank of America offer a pitiful 0.01 percent yield on their standard savings account - while Wells Fargo offers a slightly better 0.15 percent.

Read the rest:

 
Use stonecastle and fdic insured MM - currently paying around 4.5%

look at Allianz life variable annuity for ultra low risk investment (min 100k to avoid fee)

its 1 year term and you can lock gains at any time during the year. If you choose the most conservative package (it’s called “protection”) it pays either 9.6% or zero. If the index loses money you don’t lose anything. If the index finishes in the black, even if it 0.001% you get the full 9.6% for that term

there are restrictions for early withdrawal. A few percent to start that falls each year until zero at around five years.. RMD isn’t considered an early withdrawal for us old folks

I’m using this like the old bond ladder where each month one terms out. So 12 in total and one decision per month unless I’m locking early.
 
Would like to see this happen here.

LONDON, July 31 (Reuters) - Britain's banks and building societies have until the end of August to justify to regulators why some of their savings rates are low or face sanctions, the markets watchdog said on Monday, as Bank of England rates look set to rise to their highest since 2008.

Britain's banks told to justify low savings rates by end of August

Britain's banks and building societies have until the end of August to justify to regulators why some of their savings rates are low or face sanctions, the markets watchdog said on Monday, as Bank of England rates look set to rise to their highest since 2008.
www.reuters.com
 
Think twice before you fall in love with a CD.

Browsing for attractive CD rates can be a bit like scrolling for partners on Tinder. There are new, exciting options every day that seem very tempting and worthy of your time. But the same principle holds true for both: tread carefully, as the most appealing options may not be as wonderful as they first appear. Take a closer look before you commit — and, above all, don’t believe the hype.

The 7% CD — don’t believe the hype

As interest rates rise, financial institutions compete for customers with certificates of deposit.
www.marketwatch.com
 

Top Money Market Funds vs Cash (September 2023)​

Sep 4, 2023

8:31

Core & leading money market funds at Fidelity, Vanguard & Schwab nearing 5% & in some cases, even as high as 5.29%! That’s what we’ll be talking about in today’s video - where rates currently stand on core & leading money market funds at Fidelity, Vanguard & Schwab!
 
As cryptos come into official use, it looks like banks will have to morph or go away. Really they only have transactional value to me and crypto removes that function.
 

What's Better? Tax Free vs Taxable Bond & CD Yields (Comparing Tax Equivalent Yields)​

Sep 12, 2023
11:36

A 6% fully-taxable CD vs a 5.5% Treasury or agency bond? Or perhaps a 4.6% tax-free municipal bond? Which of these might be better for you? And what's a quick & easy way to compare tax-equivalent yields across different types of fixed income instruments? That's what we'll be talking about in today's video!

SOURCE
https://digital.fidelity.com/prgw/dig...
 
For anyone interested:

How To Buy Tax-Free Municipal Bonds On Fidelity (Step-By-Step)​

Sep 29, 2023
20:34

Rates keep going up! 7.11% to 7.48% tax-equivalent yields are what the latest long-dated new issue bonds from the NYC Municipal Water Finance Authority closed at this week & the earliest call date is in about 10 years. As a point of reference, the 10-year Treasury closed out at 4.59% on the secondary market yesterday. Watch on as I walk you through how to buy municipal bonds on Fidelity (step-by-step) in today's municipal bond investing video!
 

Top CD Rates October 2023 | Best No-Penalty CDs 2023​

Oct 9, 2023

10:55

What are the top two CD rates out there in October? What are some of the best rates you can get if you don’t qualify for these top two CD rates & what no-penalty CD would I personally buy right now if I were a CD buyer?

SOURCES
https://www.bcu.org/resources/campaig...
https://www.truliantfcu.org/locationshttps://alto.bmo.com/en-us/high-yield...
https://savings.breadfinancial.com/pr...
https://www.capitalone.com/bank/cds/o...
https://www.cfg.bank/personal-banking...
https://www.marcus.com/us/en/savings/...
https://www.synchronybank.com/banking...
https://www.raisin.com/en-us/cd-accou...
https://home.treasury.gov/resource-ce...
 
If you have an Etrade account you get access to many more options and there is no commission on CDs. I also saw higher rates on Etrade.
 

What Is Really Inside JEPI and JEPQ ETFs? Watch Before You Buy!​

Oct 11, 2023

22:05

Should you buy JEPI or JEPQ ETFs? The JPMorgan Equity Premium Income ETF is so popular that they added the JPMorgan Nasdaq Equity Premium Income ETF in May 2022. What is the difference between JEPI and JEPQ?
I explain how they are different and how they are similar with both using Equity Linked Notes (ELN). I take a look at how JEPI and JEPQ are structured and try to figure out what is in the ELNs that makes them able to pay out such high dividends.
Will the covered call strategy of JEPI and JEPQ continue to pay high dividends even though the Volatility Index (VIX) has gone down significantly in the last year? The premiums received from selling calls has decreased and may go down further in the future. Is the added risk of not knowing what is in the ELN worth buying JEPI and JEPQ or should you stick to simpler dividend ETFs like SCHD, VIG, SDY, VYM?
 

Why Long Term Bonds Are Making a Comeback: 30 Year Treasury Bond Hits 5%​

Oct 19, 2023

18:36

With the 30 Year Treasury yield going above 5% for the first time since 2007, is now the time to lock in longer term rates on Treasury Bonds and CDs?
Have interest rates peaked or is the Treasury selling by foreign holders causing long term bond yields to spike higher for longer.
I take a look at who is selling Treasuries and who is buying them now. I look at Term Premium of the 10 Year Note and talk about why it is now positive.
Despite what the Federal Reserve hints at, inflation does not seem to be over and interest rates can still go higher.
If you believe this may be the top for interest rates or close to it, you may want to consider moving your cash out of short term money markets, T-Bills, and CDs and lock in some of the decent interest rates offered on longer term rates on Treasury Notes and CDs. I take a look at what rates are available on Fidelity.
Before you consider to buy some longer term Treasury Bonds, CDs, or Corporate Bonds, watch this video.
 

What Are Corporate Bonds | How To Invest In Corporate Bonds​

Oct 27. 2023

16:24

7% is the top rate on new issue corporate bonds currently! So in today's video, I'm going to cover: what are corporate bonds, what are the two main types of corporate bonds & how can you start investing in corporate bonds?

WATCH NEXT (referenced in video) Callable Bond Basics: https://youtu.be/RDoQAc7BSbA

Channel: https://www.youtube.com/@DiamondNestEgg/videos
 

Municipal & Corporate Bond Investing (Fidelity, Schwab, Vanguard): How To Set Up Fixed Income Alerts​

Oct 29, 2023
10:27

6% to 8% & in some cases, even higher than 8% - that’s where many of the new issue longer–maturity corporate & municipal bonds are currently coming to market at & some of the best-yielding new issues sell out in a matter of hours!
Find out how to set up your account so that you're the first to find out about these attractive-yielding new issue munis & corporates!

2:01 FIDELITY
5:02 SCHWAB
7:41 VANGUARD
 
Take this fwiw - dyodd.

Shocking $10 Billion Loss: The Truth Behind Big Bets on TLT Bond ETF​

Oct 29, 2023

10:30

Professional traders have lost $10 Billion betting that the TLT Bond ETF will rise as interest are lowered during the upcoming recession. Investors have been piling into the iShares 20+ Year Treasury Bond ETF (TLT) with the expectation that a small drop in interest rates will give them a big rise in the price of TLT.
A Bloomberg article explains that traders see this as a trade with very little risk compared to the upside if they are right about falling interest rates. But they have invested over $17 Billion into TLT this year and are now sitting on $10 Billion in losses while they wait for their expectations to play out.
What if they are wrong and long-term bond interest rates continue much higher?
I show how much they stand to lose or gain as interest rates on long term bonds go higher or lower. If you are thinking of moving from short term Treasury Bills into longer term bonds like the 10 Year Note or 30 Year Bond, watch this video first so you can understand the risks of increasing duration on your bond investments.
 

More:

Survey: 81% Of Americans Didn’t Increase Their Emergency Savings This Year; Majority Feeling Behind | Bankrate

Just 1 in 5 households has increased their emergency savings in 2023, while 60 percent feel behind on saving for emergencies.
www.bankrate.com
 

Which Dividend ETF Is Right For You? SCHD, DGRO, VIG Or VYM​

Nov 2, 2023

8:09

Many investors pick dividend stock ETFs by whichever pays the highest yield. The Schwab Dividend ETF SCHD pays a higher yield than similar dividend ETFs like iShares DGRO, and Vanguard's VIG and VYM. I take a look at these 4 ETFs and compare them and see what is in them to get an understanding if the highest yielding dividend ETF SCHD is actually the best investment. If you are thinking of investing in dividend stocks and are considering buying SCHD, DGRO, VIG, or VYM, watch this video before you invest.
 
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