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Interest rates are at historic
lows, why are we not buying on credit as
never before? First if you have any capital at all you have no idea
how the government is going to reform or maybe not reform the tax
system. Everyone wants and needs consistent rules so they can plan,
at
this moment the economy is like quicksand, will we be able to stand or
must we sink. Also, most Americans seem to be taped out, increased
credit is the last healer they need.
Let me make a personal
observation. Credit should be used to buy instruments that produce
income, not to buy wasting or declining assets. Cash should be used for
that. Interest rates are low because the government and the fed have
decided to protect itself and the largest banks instead of the average
American.
Government deficits are protected by extremely low or almost
non existent interest charges. Banks today pay anywhere from .05 to 1.9
on CD rates. Should you be a cautious investor, having saved all your
life your return will be pathetic. On 100,000, you might get a grand, it
of course is taxed. Should you be a fanatic saver and have a million
you might get 10,000 ..this will be shredded by taxes. This just
another opinion, if you want energetic money, not lazy money, you better
become a skilled market investor. There are no guarantees on that
one. Banks can borrow money at extremely low rates, however they can
make more money investing it in the market or even bonds than loaning
it on the local level, with all the attendant credit risks. Also, the
slow and sometime destruction of our currency comes in to focus, but
that is for another time and topic.
One final point, Senior citizens who
did save money, now find conservative investments. CDs, etc. are a losing
proposition. Right now, at this moment in history, the FEDERAL RESERVE
runs this economy to benefit debtors, huge banks, and LARGE
GOVERNMENTS, NOT THE LIFE LONG PATRIOTIC PRUDENT AMERICAN CITIZEN.
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