QE3 and Low Interest Rates Help Savers? Bernanke Thinks So

Bernanke’s pretzel economics are based on the idea that what’s good for the economy, at least according to the Fed, is good for savers, too.

“Savers often wear many economic hats,” Bernanke said. “Many savers are also homeowners; indeed, a family’s home may be its most important financial asset. Many savers are working, or would like to be. Some savers own businesses, and — through pension funds and 401(k) accounts — they often own stocks and other assets.”

So while you’re still getting hosed with near non-existent returns on your savings, the Fed’s policies are supposedly compensating for that by shoring up the value of your home and 401(k) plan.

Of course, many people still haven’t recovered from their stock losses of 2008-2009, nor have their home values returned to where they were before the bubble burst.

And in defending the Fed’s efforts to bolster employment, Bernanke added this cynical observation:

“Without a job, it is difficult to save for retirement or to buy a home or to pay for an education, irrespective of the current level of interest rates,” Bernanke said.

How to Protect Your Savings from QE3
Despite Bernanke’s attempts to spin it otherwise, his easy money policies have been catastrophic for savers.

It’s a “war on savers,” says Money Morning‘s Global Investing Strategist Martin Hutchinson.
“The Fed Chairman is a saver’s worst nightmare.”

Hutchinson notes that with interest rates at historic lows, “folks with savings have been virtually forced into the market these days in search of higher yields.”

But higher yields usually come with higher risk. That means investors seeking a haven from low interest rates and inflation need to choose wisely.

Hutchinson says that means finding investments that emphasize income over growth.

Investments that Hutchinson has recommended to Money Morning readers include mortgage REITS (real estate investment trusts), closed-end mutual funds and high-dividend stocks.

To learn out more about Martin Hutchinson’s strategies to fight back against Ben Bernanke’s “war on savers,” click here.

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