Archives and past articles from the Philadelphia Inquirer, Philadelphia Daily News, and Philly.com. Watch Chega De Saudade Youtube.

Leadership by LEADERSHIP Newspaper - issuu.

Dead money — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate. Checked out your chequing account lately? They’re now called ‘banking accounts’, which means no interest on balances. Actually, you have to pay to use them.

Checked out your chequing account lately? They’re now called ‘banking accounts’, which means no interest on balances. Actually, you have to pay to use them. Issuu is a digital publishing platform that makes it simple to publish magazines, catalogs, newspapers, books, and more online. Easily share your publications and get. FierceWireless provides breaking news and expert analysis of the trends shaping wireless communications.

At the biggest bank (RBC), the basic account costs four bucks a month and you can use it for only 1. This sucks big,” Alvin was telling me on the weekend. I have two hundred grand sitting in my account now for two years because I was afraid to invest, and I thought I was at least getting half a per cent or something.”Nope. Nada. And it’s estimated about $4. Savings? Forget it. The big banks pay 0.

The fruit guys pay 0. Oaken Trust, which provide a greater return. Oaken, for example, offers 1. Home Trust, which is a big mortgage lending outfit hungry for funds to shovel into inflated residential real estate. By the way, you might recall Home Trust was in the news last summer when a bunch of its brokers committed mortgage fraud by, among other things, falsifying buyers’ incomes on loan apps. Eventually several dozen were punted after the regulator moved in, finding about $1 billion in bum loans. Presumably a bunch of that money came from Oaken depositors, so thankfully the company is a member of CDIC (if you believe in deposit insurance).

Now, let’s remember that saving money is officially penalized in Canada ever since we got emergency interest rates in 2. Most ‘savers’ are with banks, and so receive half a point. Meanwhile inflation in December was 1. Fail. Worse, the few pathetic shekels of interest paid on savings are fully taxed at the depositor’s marginal rate.

Even worse, GIC- holders are taxed annually on interest they don’t actually receive. If you have a Big Bank high- interest account, after inflation and taxes your return is negative about - 1. You can stick savings in a TFSA and improve that – for a negative return of just over - 1. So, obviously, this is no way to build your wealth, prepare for retirement, get monthly income, bulk up money for a down payment or hustle capital for a kid’s education. Saving is dead. Official monetary policy has destroyed a financial strategy that supported seniors for generations – shoveling life savings into low- risk bonds or other guaranteed interest- bearing investments to minimize the risk of losing capital while harvesting a steady and predictable income stream.

Now that stream’s gone. Bonds pay nothing. The banks pay worse. And as more and more Boomers slide into retirement with mortgage debt and meager pensions, they face the greatest risk of all – running out of money. For this you can thank central banks. When money pays nothing, it also costs nothing. So we’ve turned from a nation of savers to one of borrowers.

A savings rate north of 2. A nation of conservative little squirrels has morphed into one of crazed, granite- lusty leveraged beavers. Well, no wonder EQ Bank’s made a splash, along with some other digital players like Zag. EQ this month launched itself into the big leagues by offering to pay 3% on deposits, or more than triple that of its competitors. The outfit also has no minimum amount, lets you move money around, photo- deposit cheques and will probably send you a free mug. It’s looking to attract ten thousand customers this year and garner $2.

But there’s a catch. EQ Bank is a division of Equitable Bank, which is an ‘alternative- mortgage’ provider. As you know, ‘alternative’ is not a great word these days, conjuring up images of diddling web sites and guys with trench coats and no pants. In the lending world, Alt- A mortgages fit between traditional loans (made to people with 5% down, no other savings and jobs) and subprime ones (for borrowers with damaged credit or a parole officer). The rate charged on Alt- A loans is 1- 2% higher than for traditional ones, which suggests how EQ might start affording to pay vastly more interest than anyone else can muster.

As well, Equitable does commercial mortgages, which always come with high interest commensurate with higher risk. This ‘bank’ is also virtual. No branches. No ATMs. No tellers, advisors, loan officers or retail employees.

It’s designed to exist on your i. Phone, and it has no actual vaults full of money. Nothing to rob, of course, but then good luck if the servers are hacked.

EQ, Zag, Tangerine, Oaken or any other of these companies are not about to fold. As mentioned, we have modest deposit insurance in Canada – although it has rarely been tested. But the public appeal of digital banks providing no services and completely reliant on an Internet connection is another small indication of how monetary policy has failed us. By grinding rates into the ditch, whacking savers and rewarding massive real estate leverage, central banks have created asset bubbles which every million- dollar house sale in Toronto or Vancouver and every struggling senior proves. We’re surrounded by risk.

And stocks have little to do with it.