Interesting week, albeit seemingly uneventful, in the financial worlds. The stock market continues to make new ALL-TIME highs and continues with its 5 year bull market without much logic (in my humble not expert opinion). Interest rates continue to be low since the government continues to print money. The real estate market is slowing down, at least in the Phoenix market, which tends to lead the national market in both directions. I'm not saying it's going south just slowing to maybe a more normal level. Unemployment still troubles me and gives me pause with respect to the economy as a whole...
Back the rate issue and the government printing money - a while ago I read an article that was an eye-opener for me. I always thought that China was the biggest lender to the United States, or at least that's what the media led me and the rest of the US to believe. In actuality, the biggest lender is the United States itself. The Federal Reserve (The Fed) controls roughly 40% of the US Debt and growing like crazy through various agencies, a staggering amount in my opinion. So how much does China hold??? Roughly 8%, foreign governments all put together to hold greater than 50% but the whole story was certainly an eye-opener.
World of Low Rates..
Low rates over the last four years have certainly helped the "borrowers" out there at the expense of the "Savers." I'm definitely in the "borrower" category at this stage in my life with a mortgage and car loans and and as such have benefited, however working in the banking business I see our elderly customers who have saved all there life only now being forced to live on rates at all time historic lows. In one respect they may have a decent amount of change in the bank that they could dip into to meet their needs but on the other hand most just try and live on what they receive. It doesn't quite seem fair when the whole problem was started by the borrowers borrowing more than they should have and lenders (not me nor my employer) exacerbating the issue. Ultimately, I hope the rate environment normalizes so the savers get a little more in their pockets and the economy gets on more stable footing for the long-term.
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| Tutu Power - March 2014 |
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| Tutu Power - March 2014 |
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