1928 - Alderson High School - 1968




Rick Hughes - August 30, 2012

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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