Richard Weisser of Newnan, GA makes an interesting case for increased interest rates. I definitely agree that the current climate does not encourage savings. Possibly an increase in interest rates will also spur some action for those on the sidelines of buying as well.
Some months back I wrote about eliminating the mortgage interest deduction. Many might consider that as heresy from a real estate broker.
Now I am suggesting that we NEED higher interest rates. Once again, many in the industry may take a strong dislike to that notion.
But have you tried to open a savings account lately? Or purchase a certificate of deposit? Or a treasury security?
I went into a credit union the other day and the prevailing rate for a 5 year CD with a $100K deposit was UNDER 1% per anum! Even though the rate of inflation is relatively modest, an “investor” is certainly going to lose money by saving.
And would it surprise you to learn that bank profits are at the highest levels in years?
There is no incentive to save. That puts our long-term economy at risk. Without liquid savings, the average household is just weeks away from financial ruin.
Depositors should expect a reasonable return on their investment. More savings translates to more money available for financial consumers.
We NEED higher interest rates to sustain the balance between savings and consumption.
Otherwise we are edging closer and closer to the precipice of financial collapse.
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