Yellen proposes taxing savings at 2% a year until further notice
What? She did?
Yes she did. She ….She has decided … yes, She has decided that a 2% inflation rate is just the answer to our economic troubles. And She has also decided that zero interest rates are here to stay for a while. Yes, She has decided and She has spoken. Praise unto the Federal Reserve Chairperson.
It was just a few years ago that Cyprus was on the rocky shoals of bankruptcy. One of the solutions floated to assuage the condition was a 10% tax on savings. Outrage ensued.
Yet what Ms. Yellen proposes is exactly the same solution. It is merely dragged on at smaller increments for a longer period. Outrage, where art thou?
The much ballyhooed and headlined “Federal Reserve Mandate” includes the direction to “stabilize prices”. At the Yellen recommended rate of 2% inflation, compounded, prices will rise by 64% nearly every 25 years and will double every 36 years. Exactly where is the allegiance to price stability? And more importantly, where is the authority and the power to encourage inflation? We, those who save and hold dollars, respectfully inquire.
So as Yellen continues with the ZIRP (zero interest rate policy) and promotes 2% inflation (as they so lamely measure), the net effect cannot be denied. No country has ever assumed a ZIRP and extricated themselves. Couple this with the fear of deflation, trumped up as beef, shrimp, electricity, and gasoline all are making or near all time high prices, and we have a misguided unauthorized policy implemented by an appointed body, self directed by assumed authorities and guided by false inflation measures. What could go wrong?