Richardcyoung.com

The Online Home of Author and Investor, Dick Young

  • Home
  • How We Are Different
  • About Us
    • Foundation Principles
    • Contributors
  • Investing
    • You’ve Read The Last Issue of Intelligence Report, Now What?
  • Your Survival Guy
  • The Great Reset
  • COVID-19
  • My Rifles
  • Dividends and Compounding
  • Your Security
  • The Swiss Way
  • Dick Young
  • Debbie Young
  • Key West
  • Paris
  • Dick’s R&B Top 100
  • Liberty & Freedom Map
  • Your Health
  • Ron Paul
  • Bank Credit & Money
  • Dick Young’s Safe America
  • Your Survival Guy’s Super States
  • Critical Race Theory
  • NNT & Cholesterol
  • Work to Make Money/Invest to Save Money

The Goldman Wars. Which Side Are You On?

May 21, 2021 By Richard C. Young

By petrmalinak @ Shutterstock.com

Originally posted on August 17, 2011.

Here’s my true story. A few years back, Sydney and Rhonda Goldman sold the family deli in Brooklyn and headed south, looking forward to their long retirement in a high-rise condo in sunny Boca. For decades, they had worked from 5:00 a.m. to late in the afternoon and were now worn out and ready to hit the beach. The net proceeds from the sale of their deli provided Sid and Rhonda with a million dollar nest egg that, with their Social Security checks, figured to hold them well. Their plan was to draw a modest 4% from an ultra-low-risk, fixed-income portfolio. The proposed $40,000 annual draw covered, if just barely, Sid and Rhonda Goldman’s basic needs. They are frugal people.

So how are things going? Thanks to Ben Bernanke, not so well. You see, the Fed Chairman has decided that the way to artificially pump up the economy is to clamp the lid on the interest rates for two more years. The target rate on Fed funds is now basically zero. Such historically low borrowing costs are just dandy for Washington’s favorite New York trading crowd at Goldman Sachs, but far from fine for the savaged Boca Goldmans, Sid and Rhonda. You see, their 33/33/33/ mix of safe and secure 90-day T-bills/money market funds/1-year CDs is pulling in just $4800 mini-dollars for the retired and now tragically underfunded couple. This is but a tiny fraction of the $40,000 annual draw the prudent Boca couple had planned on. The last shopping trip to the local Winn Dixie was so expensive and Rhonda’s wallet so thin that she had to take most of the groceries out of her basket at the checkout counter. Rhonda stood there aghast at the hit her food-buying mission was taking from her decimated budget and from brutal cost inflation. Had not Mr. Bernanke assured Americans that inflation was under control? Well, what Rhonda was forgetting is that the food that she and her retired husband survive on and the gas she burns up on her trek to Winn Dixie do not count on Mr. Bernanke’s inflation meter.

Meanwhile, everything is hunky-dory back on Goldman’s New York trading floor, giggles all around. Imagine the largesse of Mr. Bernanke in allowing Goldman, for the next two years; to ride the free money truck up and down Wall Street? A child could make a fortune borrowing at basically zero. Isn’t America great, and isn’t Ben Bernanke a sweetheart? Well, that’s the story: one dream of a retired couple that had worked hard for a lifetime shattered and truckloads of free money for the Wall Street speculators.

Click to Enlarge

The U.S. economy is in the tank after two-and-one-half brutal years of mismanagement from the Obama administration. As the Ames, Iowa Straw Poll has just shown, American’s are honked off and ready to do battle. You may be shocked at the level of discontent in America, and my consumer sentiment chart will make you feel no better. Americans will not spend in this environment, and America’s small business owners will not hire. A nice one-two punch, don’t you think? Have a good week.

Warm Regards,

Dick

P.S. For more, read Inflation Rise Puts Fed in a Bind by Sudeep Reddy at The WSJ.

If you’re willing to fight for Main Street America, click here to sign up for my free weekly email.

Related Posts

  • Power Wars
  • Store Wars
  • Python Wars
  • Author
  • Recent Posts
Richard C. Young
Richard C. Young is the editor of Young's World Money Forecast, and a contributing editor to both Richardcyoung.com and Youngresearch.com.
Latest posts by Richard C. Young (see all)
  • For Investors Who Want to Stop Worrying About a Market Crash - July 1, 2022
  • Florida Is a Refresher Course in American Greatness - July 1, 2022
  • Biden’s Economy Even Weaker than Thought - June 30, 2022

Dick Young’s Must Reads

  • Yes! Money Can Bring You Happiness
  • V4 Stands Against North African and Middle Eastern Invasion
  • The Butterfly Effect and Chaotic Markets
  • Vermont Abandoned, Dairy Farm Economy Devastated
  • Florida: Enjoy Certain Freedoms and Individual Liberties
  • BEYOND RUSSIA: America Strengthens India Ties to Counter China
  • Being Fully American Means Americans First
  • CONSTITUTIONAL CARRY: Alabama Becomes 22nd Permitless Carry State
  • Victor Davis Hanson: How to Bust DC’s Stronghold
  • Sen. Hawley Makes the Case Against U.S.-China Relationship

Our Most Popular Posts

  • FOOD SHORTAGE: Not "If," But "How Bad?"
  • One Surprising Thing You Should Know About Private Jets
  • Saudi Oil Is Different from U.S. Oil?
  • Your Survival Guy in Paris: Awakened from His Slumber, “Dad, I’m Going to London”
  • FLORIDA DODGED A BULLET: Elected Superb DeSantis Over Unstable Gillum
  • Good News for the 2nd Amendment
  • The Most Controversial Restaurant in Paris?
  • The Great Reset and the COVID Coup D'etat
  • 10th AMENDMENT: Dobbs Decision a Win for States' Rights
  • What Just Happened? Fixing Its Historic Mistake

Disclosure

RSS Youngresearch.com

  • Even Without Food and Gas, Inflation is Soaring
  • Time to Save, Troubles Dining Out, and Intelligence on Yellowstone
  • Purchases of Gaming Chips for Crypto Mining Tailing Off
  • RURAL RENAISSANCE: America Finds the Country Again
  • Are Google, Amazon, and Microsoft About to Crash This Specialized Real Estate Market?
  • Why Work When Taxes Take It All?
  • Regulators’ Bungled Attempts to Cut Emissions Drove Oil Prices Higher
  • Your Survival Guy in Paris: Awakened from His Slumber, “Dad, I’m Going to London”
  • What Happens to Your Passwords When You Die?
  • Your Survival Guy: Clearing the Decks, Buying a Boat, Seeing the World and More

For Investors Who Want to Stop Worrying About a Market Crash

Breaking News: House Election Update

WATCH: New York Governor Melts Down When Asked for Facts

Florida Is a Refresher Course in American Greatness

Should You Believe Ms. Hutchinson?

Biden’s Economy Even Weaker than Thought

Copyright © 2022 | Terms & Conditions | About Us | Dick Young | Archives