That's if they don't exceed their 2% inflation goal, and they are wildly wrong at that number. The real inflation rate is closer to 12%, if you include food and energy, and calculate the number the way it was originally calculated. This is something I write about regularly, here for example. Borepatch did the same today. Why do they want 2% inflation? Quoth the oracles:
“The Federal Open Market Committee (FOMC) judges that inflation at the rate of 2 percent (as measured by the annual change in the price index for personal consumption expenditures, or PCE) is most consistent over the longer run with the Federal Reserve’s mandate for price stability and maximum employment. Over time, a higher inflation rate would reduce the public’s ability to make accurate longer-term economic and financial decisions. On the other hand, a lower inflation rate would be associated with an elevated probability of falling into deflation, which means prices and perhaps wages, on average, are falling–a phenomenon associated with very weak economic conditions. Having at least a small level of inflation makes it less likely that the economy will experience harmful deflation if economic conditions weaken. The FOMC implements monetary policy to help maintain an inflation rate of 2 percent over the medium term.”This inflation rate has already sapped most of the value out of the dollar. Over at Washington's Blog, there are a couple of plots of the decrease in the value of the dollar. We've done it here, too, and you can see some charts I constructed in my article: could we return to a gold standard in the US.
Robert Kiyosaki's latest book "Unfair Advantage" and this is one of his main topics. The "debt is money" system is set up to destroy savers. He says if you're going to save, don't save dollars: save gold and silver. The only asset in the last decade to come close to matching the yields we need is the precious metals. Forget the idea of buying and holding stocks in a 401k. That ship wrecked and is in pieces on the rocks.
Savings? Give me a break! The Banks that run America (Goldman Sachs, JP Morgan) have demanded an end to zero interest. They want negative interest! They demand that you pay them for the privilege of buying bonds. Forget getting a return on investment. In the quote of the day, commenter Chuck Bone on that Zerohedge article says,
In Soviet America, government debt earns interest from you!