[dtennent]

Boom bust cycles have been going on since the founding of our country. The Fed was established to modify the highs and the lows. Over the past 40 years, I would say that they have done a reasonable job.

[Topspinmo]

Originally Posted by tophcfa

The media is downright giddy that the most recent inflation report indicates the Fed might soon be cutting interest rates. Exactly how is that good news for responsible senior citizens who have saved their hard earned money, avoided debt, and want to earn a reasonable real rate of return above inflation on their savings?

IMO manipulation and Ponzi schemes ever since gold standard was axed for paper money. yes I know I have weird opinions..

[Topspinmo]

Originally Posted by Stu from NYC

Once upon a time the media would just report the news

Not on this planet…

[Michael G.]

Originally Posted by Stu from NYC

Once upon a time the media would just report the news

They still do but now it's fake.

[Blueblaze]

Mortgages were over 8% for my entire working life, until the gooberment blew up the economy giving way mortgages to people who refused to pay them back, and the whole thing came crashing down in 2008. Heck, my Grandparent's 20-year, $5,000 mortgage was over 5%! My father's 20-year $18,000 mortgage was 4% (thanks to the Nixon/Carter inflation)! My first home was 18% for a 30-year, $80K mortgage, because that's what it took to fix the Nixon/Carter inflation. And still, my savings NEVER hit 0.01% until 2008. Before 2008, the gooberment was never so cruel as to force me compete with their printing press!

There is NOTHING "normal" about a 3% mortgage or 0.01% passbook savings rate. The passbook savings rate was 4.25% for 100 years prior to 2008. NORMAL is when a bank pays you 4.25% to save your money with them, so they can loan it back out for 8%. But the gooberment's magic money machine makes your savings account a mere nuisance. The bank gets its money direct from the FED, not you.

"Normal" ended in 2008.

[Pugchief]

Originally Posted by OrangeBlossomBaby

It's bad news for rich old people only to the extent that they'll have fewer pieces of gold to fill their coffins with when they're buried.

Harsh. Maybe they are concerned about needing expensive in-home care when they are older. Or supporting their unemployed adult children. Or something else.

It's good news for anyone who has debt in any legal institution that charges interest.

It has zero impact on anyone who has neither savings nor debt.

Not true. Unless your investment portfolio is 100% stocks, bond rates and values are very sensitive to interest rates.

[Stu from NYC]

Originally Posted by Topspinmo

Not on this planet…

They used to! Now they tell us what they want us to think.

[OrangeBlossomBaby]

Originally Posted by Pugchief

Harsh. Maybe they are concerned about needing expensive in-home care when they are older. Or supporting their unemployed adult children. Or something else.



Not true. Unless your investment portfolio is 100% stocks, bond rates and values are very sensitive to interest rates.

Most Americans don't have ANY "investment portfolio." Bond rates and values don't affect them at all. I have stock in one company. Current value is around $6,000. It was worth something like $325 when my grandmother bought it for me. If Intel goes bankrupt I'll be out nothing, since I never invested a dime of my own money into it. I have no pension, no 401K, no IRA, no annuities. Most Americans with a 401k only get to invest a small percentage of their paycheck into a limited list of fund options. Since their contribution is matching, they'll come out ahead no matter what happens to bond rates and values.

[Pugchief]

Originally Posted by OrangeBlossomBaby

Most Americans don't have ANY "investment portfolio." Bond rates and values don't affect them at all. I have stock in one company. Current value is around $6,000. It was worth something like $325 when my grandmother bought it for me. If Intel goes bankrupt I'll be out nothing, since I never invested a dime of my own money into it. I have no pension, no 401K, no IRA, no annuities. Most Americans with a 401k only get to invest a small percentage of their paycheck into a limited list of fund options. Since their contribution is matching, they'll come out ahead no matter what happens to bond rates and values.

Except you weren't talking about 'most Americans'. You were talking about wealthy retirees in TV. Who presumably have diversified portfolios including bonds.

Your words: "It's bad news for rich old people only to the extent that they'll have fewer pieces of gold to fill their coffins with when they're buried."

Not investment advice, but you might want to think about diversifying that Intel stock into an S&P 500 fund or something.

[Battlebasset]

When return on CD/Treasuries was above 5%, I moved excess cash into those. When it drops, it's time to invest with the fixed income money I have made. If we go into recession, then I can pick up stocks cheaper.

Yes, I'm only 60 so I have some runway.

[Topspinmo]

Originally Posted by Battlebasset

When return on CD/Treasuries was above 5%, I moved excess cash into those. When it drops, it's time to invest with the fixed income money I have made. If we go into recession, then I can pick up stocks cheaper.

Yes, I'm only 60 so I have some runway.

Depends on how big airplane is?

[Aces4]

Originally Posted by Blueblaze

Mortgages were over 8% for my entire working life, until the gooberment blew up the economy giving way mortgages to people who refused to pay them back, and the whole thing came crashing down in 2008. Heck, my Grandparent's 20-year, $5,000 mortgage was over 5%! My father's 20-year $18,000 mortgage was 4% (thanks to the Nixon/Carter inflation)! My first home was 18% for a 30-year, $80K mortgage, because that's what it took to fix the Nixon/Carter inflation. And still, my savings NEVER hit 0.01% until 2008. Before 2008, the gooberment was never so cruel as to force me compete with their printing press!

There is NOTHING "normal" about a 3% mortgage or 0.01% passbook savings rate. The passbook savings rate was 4.25% for 100 years prior to 2008. NORMAL is when a bank pays you 4.25% to save your money with them, so they can loan it back out for 8%. But the gooberment's magic money machine makes your savings account a mere nuisance. The bank gets its money direct from the FED, not you.

"Normal" ended in 2008.

You hit the nail on the head. Now everyone needs to get rich in the stock market so prices are super-inflated to feed the masses. It's ridiculous, every medical supply, service and so forth is also super-priced along with everything we touch. And the pyramid scheme goes on and on.

I think if interest rates paid on personal savings accounts tanks again, everyone should pull their money out of banks even if it bites. Let them get their free money from the government for their mortgages and such.

[JRcorvette]

Originally Posted by tophcfa

The media is downright giddy that the most recent inflation report indicates the Fed might soon be cutting interest rates. Exactly how is that good news for responsible senior citizens who have saved their hard earned money, avoided debt, and want to earn a reasonable real rate of return above inflation on their savings?

You need to take action now before the rates drop. There are still safe investments out there that will pay you 5%++. But don’t wait too long.

[FloridaGuy66]

Originally Posted by OrangeBlossomBaby

I have no pension, no 401K, no IRA, no annuities.

Seems like anyone living in TV in that situation would have to be sitting on a significant stockpile of money just to cover home, food and modest entertainment costs for several decades.

[Switter]

Originally Posted by bshuler

In July, on a new home in TV I got a 30 year rate quote of 7% from Citizens First.
Tuesday I got a rate of 5.875% on a 30 through National Bank of Kansas City (nbkc).
Loan officer claims rate cut has already been built into the market.

I bought last August and I am at 6.875. I didn't know they were already below six. I might still wait, holding out hope they'll go to the low 5%