Bernanke, The Fed, Hurting Economy

Federal Reserve Chairman, Ben Bernanke, is artificially suppressing interest rates for both savings and loans to ridiculously low levels. In some twisted thinking on economics they somehow think that this helps, rather than facing the reality of true inflation. Somehow the Fed feels that manipulating numbers is a better way to manage the economy rather than supporting business and people, and dealing with reality. They look at only one side of the equation in believing that artificially suppressed interest rates will stimulate investment and the economy. Yet those who invest are holding back specifically due to the economy and the uncertainty. What they don't look at is that these very low rates actually hurt banks and individuals, particularly seniors. Banks are being forced to walk the fine line of financial viability, their margin of error is very slim. Individuals have less money from their savings to spend on those extra items they may need. Banks are placed in financial jeopardy, less money flows into the economy. Seniors, in particular, are being placed into a financial stranglehold.


It makes no sense to make interest rates artificially low when true inflation is running about 10 to 15%. What could be more fundamental than food? In shopping for groceries people are experiencing well over a 20% increase, some say higher. Since January 2009 the average cost of gasoline has increased by over 60%. Mysteriously, real estate taxes have increased in spite of home values decreasing in a depressed housing market. Federal, state, and local taxes, fees, as well as many hidden taxes and fees, have increased. Home heating, electric, and energy costs have increased significantly. Health Insurance has increased dramatically, in some cases by as much as 40 to 56%, with a doubling of co-pay, or more. Most "necessary" items that we purchase to live by have increased significantly. This is the real world that the American people experience in their everyday purchases. Inflation is NOT flat. As one woman recently commented: "What planet do they live in?"

China is actually doing a much better job of managing their economy than the United States. In dealing with reality, they have recently announced raising interest rates for the second time in slightly more than a month. This pushed the benchmark one year deposit rate to 3%, and their lending rate to 6.06%. This is dealing properly with reality and managing the economy! The United States, should right now be at about these same levels of interest rates.

Reality, not manipulation, should be the approach taken by our federal government to begin fixing our economy. Being honest about inflation and rational interest rates are a part of this.