Fed to Savers: You don't matter

Reading this article at cnbc.com reminded me of one of the most devastating consequences of the decisions made by the monetary policy "experts" at the Federal Reserve.

"It's also time", says the author, Andrew Barry, "for the Fed to consider the plight of the country's savers..who are being forced to take substantial interest rate or credit risk if they want higher yields.. there are millions of Americans — most of them elderly — who diligently saved and now have little income to show for a lifetime of effort."

Without question, the condition of our nation's savers is a pretty low priority for Bernanke and his cabal of Wall Street buddies. Those of us who have been living within our means, staying out of debt, and managing to put some money away in the bank have punished unfairly by the Federal Reserve's monopoly on interest rate control. In the past year, the interest rate on my savings account has dropped from a healthy 3.3%, to a paltry 0.5%. Other savers across the country have been affected in the same way. Of course, none of this matters to Bernanke. What's important to him is that his friends on Wall Street have easy access to money with which to rebuild their businesses, and build the next bubble, after the previous bubble popped last year. To the elitists in Washington and on Wall Street, savers are simply a necessary casualty of the bailouts (yes a 0% interest rate is a bailout).

There is, however, another way. In a truly free society, savers would be paid an interest rate determined by market forces, not the whim of bureaucrats in Washington. As the amount of savings declined, interest rates would rise. As savings increased, interest rates would decline signaling to entrepreneurs that now is the time to begin new capital intensive ventures. If you are as fed up with this nonsense as I am, make a point of emailing your representative this week and asking him or her if they think it is fair for the Federal Reserve to punish the savers in our country.