Tags: David Stockman | federal reserve | jihad war | retire

David Stockman: Fed Needs to Stop 'Jihad' Against Retirement

David Stockman: Fed Needs to Stop 'Jihad' Against Retirement
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By    |   Wednesday, 16 September 2015 08:00 AM

David Stockman, former Reagan Budget Director and a Newsmax Finance Insider, urged the Federal Reserve to stop waging war against America’s savers and retirees.

“I’m arguing that the jig is up,” Stockman told Fox Business Network.

“Eighty months of zero interest rates is crazy enough. It’s time for the Fed to stop its wretched jihad against the savers and retirees of America… and allow the market to find an interest rate that makes sense,” he said.

“There are savers out there millions. There are borrowers out there — millions. Let them figure out the right rate, not 12 people sitting on the FOMC,” he said

Analysts said an interest rate hike — the first since 2006 — would remove the uncertainty that has dogged the market for several weeks.

"The debate around the Fed continues but the Fed will do more damage waiting for December to raise rather than start the normalization process," Art Hogan, chief market strategist at Wunderlich Securities, told Reuters. "If they don't raise rates this week, it's a bad signal."

U.S. interest rates futures implied traders placed a 27 percent chance the Fed would end its near-zero interest rate policy on Thursday FFU5, up from 23 percent late on Monday, according to CME Group's FedWatch program.

Meanwhile, Stockman also told Fox Business Network that the Fed’s 2 percent inflation target is “totally made up.”

“[It] conveniently allows them [the Fed] to shovel free money into Wall Street,” he said.

“It never does get to Main Street. The whole idea of zero interest rates is to get consumers and households all jiggy and get them borrowing and spending, but that doesn’t work anymore because we’re at peak debt. Households have $13 trillion of debt. Ninety percent of households are tapped out. They can’t borrow, regardless of the interest rate,” he said.

“We can’t solve this economy by picking sides at the Fed between savers and borrowers and say ‘we’re going to keep at zero for borrowers forever.’ It should be neutral and it shouldn’t be intruding in such a massive way into the financial market.”

To be sure, retirees have it difficult enough.

While both men and women face big retirement-savings challenges, the hurdle is higher for many women. To have a decent standard of living in old age, women, who earn on average 78 cents to a man's dollar, need to save $126 for every $100 men do, Bloomberg News reported.

Financial Finesse, which provides financial education programs to more than 600 organizations, examined data on median income, retirement savings, life expectancy, 401(k) salary deferral rates, and projected health-care costs for a woman and a man, each 45 years old. The goal: Figure out how much each needed in order to retire at age 65 and live on 70 percent of his or her pre-retirement income.

The gap that emerged between the sexes: 26 percent. A man's retirement shortfall was more than $212,000. A woman's? More than $268,000, Bloomberg reported.

(Newsmax wires contributed to this story).

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David Stockman, former Reagan Budget Director and a Newsmax Finance Insider, urged the Federal Reserve to stop waging war against America's savers and retirees.
David Stockman, federal reserve, jihad war, retire
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2015-00-16
Wednesday, 16 September 2015 08:00 AM
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