Wednesday, January 29, 2014
Postal savings returns?
Dayen notes that the Post Office is thinking about bringing back Postal Savings.
YES! YES! YES! Excellent idea!
We had a Postal Savings system from 1910 to 1966; other countries had it much earlier and some still use it. This original 1910 proposal summarized how Postal Savings worked in other countries. The authors seemed desperate to reassure banks that the PO wouldn't compete with them. Repeatedly made the point that Postal Savings intended to serve only "widows and orphans", offering very low interest rates. [Very low = 2%, which is of course unimaginably stratospherically high by today's criminal standards.] The European experience showed consistently that a customer who got prosperous enough to seek higher returns would move up to commercial banks, and the proposed US Postal Savings was designed to force such moves. Obama's new Myra proposal for low-income retirement forces the same intro/moveup paradigm.
Here's a clear description of how Postal Savings actually worked in 1911. You could save up to $500 (about $10k today). Twice a year you could roll over part or all of your account into 20-year maturity bonds, with clippable coupons for 3.125% interest; so your liquid account was limited but your total federal account wasn't limited.
Ideally, a new version of Postal Savings should have the opposite purpose. PS should work hard to corner the market on all banking services because banks no longer offer banking services. Banks no longer want savers. Banks no longer pay interest. Banks no longer want to make loans. Banks are solely playgrounds for the Chosen, who have the unique gene-based privilege of taking all the money in the world AND MORE, plus infinite amounts of counterfeited QE "money" AND MORE, just because they're Chosen.
Thus the Post Office could make a profit from the entire market of poor and working class (i.e. non-Chosen) savers, simply by paying NON-ZERO interest rates and making small loans.
We had a Postal Savings system from 1910 to 1966; other countries had it much earlier and some still use it. This original 1910 proposal summarized how Postal Savings worked in other countries. The authors seemed desperate to reassure banks that the PO wouldn't compete with them. Repeatedly made the point that Postal Savings intended to serve only "widows and orphans", offering very low interest rates. [Very low = 2%, which is of course unimaginably stratospherically high by today's criminal standards.] The European experience showed consistently that a customer who got prosperous enough to seek higher returns would move up to commercial banks, and the proposed US Postal Savings was designed to force such moves. Obama's new Myra proposal for low-income retirement forces the same intro/moveup paradigm.
Here's a clear description of how Postal Savings actually worked in 1911. You could save up to $500 (about $10k today). Twice a year you could roll over part or all of your account into 20-year maturity bonds, with clippable coupons for 3.125% interest; so your liquid account was limited but your total federal account wasn't limited.
Ideally, a new version of Postal Savings should have the opposite purpose. PS should work hard to corner the market on all banking services because banks no longer offer banking services. Banks no longer want savers. Banks no longer pay interest. Banks no longer want to make loans. Banks are solely playgrounds for the Chosen, who have the unique gene-based privilege of taking all the money in the world AND MORE, plus infinite amounts of counterfeited QE "money" AND MORE, just because they're Chosen.
Thus the Post Office could make a profit from the entire market of poor and working class (i.e. non-Chosen) savers, simply by paying NON-ZERO interest rates and making small loans.Labels: 20th century Dark Age, Danbo, the broken circle
¶ 6:31 AM
