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Fed robbing seniors

The federal government is destroying the lifetime savings of senior citizens using the Federal Reserve’s “quantitative easing” (QE) and “Operation Twist.”

These programs disproportionately focus on devaluing the savings accounts of every senior citizen. The unfairness of this strategy relates to the fact that senior citizens hold most of the privately invested wealth is this country. The result is bilking seniors and rewarding thieves who caused the problem.

QE is essentially creating money out of thin air, using it to buy back financial risky assets held by banks and other financial institutions. This relieves these institutions of possible bad debt and gives them additional reserves to make loans to stimulate the economy. That means that as the banks release the money they are “sitting on,” the dollar will be worth about 70 cents.

“Operation Twist” is intended to reduce long-term interest rates by selling the government’s inventory of short-term bonds. These sales would allow the Fed to purchase long-term bonds, which would force prices up and interest rates down. Unfortunately, the government sale of short-term bonds is inadequate to significantly impact this market, so it is printing more “funny money” to finance it.

The third burden on seniors is the Fed reducing short-term interest rates to zero, so that seniors’ savings essentially generate no income.

Warren A. Smith

Penn Township

Butler County


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