In “How Does the Fed Control Interest Rates in a Free Market?” we wrote:
Even as recently as 2007, banks were paying 4% interest. Now you have to go to the hundredth decimal before you find your interest rate. We have the Federal Reserve’s manipulation of the bond market to blame for this change.
Here is a chart of taxable money market interest rates:
Many people don’t understand that official inflation no longer measures actual inflation. But we can see the effects in everything we buy, including the Big Mac Inflation Index:
Most people understand the risks of the stock market. But few people understand how keeping your money “safe” might lose half of it in 16 years. Nor do they understand how investing mostly in bonds might mean a much lower lifestyle in retirement.
In retirement planning, these are the deep risks we are more concerned about than the passing volatility of a single asset class over a two year period.