Flashback to earlier this Spring.
---
In honor of Sheila's resignation announced a few hours ago...
Video - Sheila Bair for FDIC's "America Saves Week" - Feb. 22, 2011
Sheila's Message: Skip Starbucks And Give More Money To The Banks
This might be the saddest, most ridiculous and infuriating public service announcement since Bert the Turtle's "Duck and Cover." For "America Saves Week," Sheila Bair tells Americans to try to sock away just $10 per week.
"Here's what's amazing," Bair says, "... even if it earns only 1% interest, you will have more than $2,600 in five years and more than $11,500 in twenty years." Ok, let's see how that works out...
- $10 x 52 weeks x 5 years = $2,600
- $10 x 52 weeks x 20 years = $11,500
Wow, Sheila, that is "amazing." In a bygone era, banking officials used to talk about the "wonders of compound interest," but with the Fed holding rates at ZERO, the interest earned on your savings account isn't even worth calculating. And Sheila doesn't even bother. That's amazing. Folks, forget FDIC insured bank accounts, you may as well bury your money in a plastic sack in your back yard.
Here's what an ordinary savings account will earn at today's rates...
1.11% doesn't even make up for inflation -- not even close. Just take a look at gas prices over the past 12 months:
Or how about food prices?
America Saves...??? We should just rename it "America Saves the Banks Week," because that's what it is. Artificially low interest rates are for the benefit of the banks, who can take free money from the Fed and then turn around and "invest" it in Treasuries (which we pay off with our tax dollars), or speculate in commodities like oil and food, which we pay for in the form of higher prices at the pump and at the grocery store.
Of course, if we're being honest, we have to acknowledge that every week is "America Saves the Banks Week." We now know that we subsidized the banks in 2010 to the tune of $130B in bonuses. Yet here we have FDIC chair Sheila Bair telling Americans to skip their afternoon snack or brown bag their lunch so that they can give the banks an extra $10 with which to drive up the price of oil, food and other commodities. When ordinary Americans are dealing with the nuclear fallout from the bankers' fraudulent debt bombs, Bair's advice isn't just insulting, it's the financial equivalent of "Duck and Cover"...
Duck And Cover (1951) Bert The Turtle Civil Defense Film