Yohei

The Death of Mortgage Banking and the Shadow Banking System

Savings have to increase. Therefore the retail saver has to get a return of, say, 3% net of inflation.

A casual examination of the facts shows that the CPI-U understates inflation by at least several points. Using the pre-Clinton CPI calculation (much less the pre-Johnson more valid calculation) current inflation is 3.5%.

Therefore large FDIC insured Certificates of Deposit need to return about 6.5% at this time. The problem is regulatory, naturally.