ole joyful's rant to his (federal) Member of Parliament's office

joyfulguyMay 17, 2012

Won't reiterate here - but check it out over on "Kitchen Table, under title of "My memorable week-ago Wednesday morning" or something similar.

Best do it soon after today, May 17, as the pages move about a page a day, over there, so it'll drop off of p. 67 in 2 - 3 months, likely.

The compliance officer overseeing the work of my mutual fund guy criticized him for allowing an old guy over 80 to be willing to accept "moderate" risk in his investments, aiming at "growth" ... which is what he should have done ... but my advisor argued, saying that his 80-year-old was familiar with investments, and knew what he was doing. So they had me initial those choices that I'd made.

Then I visited a local (federal) Member of Parliament's office to ask whether they knew how our government's shooting many of their citizens in the foot, especially seniors. (They recently rescinded a former law requiring the registry of long guns - we've had one regulating pistols for decades).

Basically, in setting interest rates low, meaning that many are getting minimal return on investments ... as are many pension funds.

While printing money ... which, sooner or later, brings inflation ... which reduces the value of one's dollar-denominated assets.

ole joyful

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marie_ndcal

Hope things went as you wanted them to.

    Bookmark   October 4, 2012 at 12:18PM
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joyfulguy

The governments are deep in debt ... and going deeper every day.

So they don't want to have interest rates rise.

Can't stand to have them do so, actually.

But with the printing of the money, sooner or later there'll be inflation.

Those who are stretcchhiinngg their financial picture now in order to buy a house, with the current low interest rates, will be in trouble if/when interest rates double.

As an investor, though, if I get 2% on a bond, and pay 25% of that in tax, I'm down to 1.5% return, after tax.

And when I put my dollars where I have a guarantee that at the end of the contract I'll get back every dollar that I loaned (plus the rent on the money) ...

... there's another guarantee that they never mention: I won't get one single dollar more, either (apart from the rent on the money).

So ... as each dollar will buy less when it's returned than it would when I loaned it out, part of the (after-tax) rent on the money must be added to the original stash in order to keep purchasing power intact.

If I get 3% on the money that I loaned out and pay 25% tax rate, that takes me down to 2.4% after-tax money in hand ... and the official rate of inflation for some time has been about 2% ... which doesn't leave me with much.

And if you've visited a grocery store lately, I think that you'll judge that there's a little bit of hogwash included in that claim of the official rate of inflation being only 2%.

Learning how money works - an interesting hobby ... THAT ... PAYS ... WELL!!

ole joyful

    Bookmark   December 12, 2013 at 4:53PM
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