American • Federal Reserve’s policy to save housing is forcing seniors
Federal Reserve’s policy to save housing is forcing seniors into foreclosure
LAGUNA HILLS, NEWS
The federal reserve controls short-term interest rates through buying and selling Treasury notes. These rates determine how much interest people earn in savings accounts, the asset class favored by senior citizens. The federal reserve lowered interest rates to zero to force money out of savings accounts in hopes this money would seek out riskier asset classes and stimulate the economy. Since seniors are risk adverse, most have left their savings in place, and those that need those savings to survive — which is most seniors — are depleting their savings accounts to make ends meet.
When many seniors planned their retirement, they counted on a certain amount of interest income to survive. The federal reserve has instead diverted this money to its member banks to help them earn their way back to solvency. In other words, the federal reserve has taken food out of the mouths of seniors so bankers can continue to make money, earn bonuses, and otherwise rape and pillage the American economy.
One of the reasons the federal reserve recently began buying more mortgage-backed securities is to lower home mortgage rates to stimulate housing. The collapse of the housing bubble is causing a general economic malaise, and both the lowering of Treasury rates and mortgage rates are intended to lift housing and the overall economy.
Although the federal reserve ostensibly wants to keep loanowners in their properties, their policies are having a broad but unintended side effect. By taking away income seniors were counting on in their retirement, many lifelong homeowners are finding themselves unable to make their mortgage payments. These seniors are probably going to lose their homes in foreclosure. Many of these wounds are self-inflicted, but at their age, seniors have little chance of recovery.
Statistics: Posted by yoda — Tue Sep 25, 2012 1:43 pm
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