- June 23, 2013 - 09:22
Does anyone really believe that higher interest rates are imminent? I don't believe that interest rates will rise significantly in my lifetime, and I'm not 60 yet. When people talk about interest rates, they talk about the cost of borrowing and what a 1% hike would mean to a mortgage holder. That, in itself, is true. What is not discussed is that when interest rates go up, not only does the cost of borrowing go up, but interest accrued on savings also goes up. That is where the problem lies for the Fed and the Bank of Canada. When seniors could put their life savings in an interest bearing account and get 4 or 5 percent annually, they were happy enough. Over the last few years on programs like The Fifth Estate and W5, we have seen numerous stories of seniors who have lost everything, because they trusted their money with Wall Street investors, simply because regular savings accounts amounted to keeping your money under the mattress. The long and the short of it is, those investors (gamblers) wanted whatever savings you had, and you had to live in hope that their gambles paid off. When Wall Street stops calling the shots and dictating government policy, then interest rates will rise. I'm not holding my breadth.