>>Hilmar,
>>
>>Yes, interest rates are low right now. Here in the US, interest rates often move with the Fed rate. I did a google search, here's an article:
>>
>>http://www.chron.com/cs/CDA/story.hts/business/buggs/789208
>>
>>The Fed rate is low right now, and was cut several times last year by Greenspan...in an attempt to encourage the economy to grow.
>>
>>Of course there are factors besides the Fed rate that affect interest rates. Supply and demand.
>>
>>
>>>Interest rates for bank deposits and similar have gone down drastically in the last 2 years, approximately, here in Bolivia. I have heard that the same happens world-wide. 1) Is this true? 2) If yes, what might have caused this?
>>>
>>>Hilmar.
>
>Hmmm... Well, first of all, thanks for your reply. Now, this information seems to pose at least as many questions as it answers! For instance: If lowering the Fed rate tends to make the economy grow, would that make the interest rates go up again, in the long term? Did the lowering of the Fed rate affect - perhaps indirectly - most other countries, who are now "following suit"? What caused the economic slowdown in the first place? Is the tendency showing signs of reversal?

Your question related to DEPOSIT rates. Here in Canada they have been low for 3+ years now. The bank that I used to use was paying .05% (no, that's not a typo) and for amounts over $50,000. it was .15%. Sheer robbery!
Mind you, the best that I could find at that time was 4.00%, which rose for a few months to 4.35%, and is now at 2.75%.
Yes, our "fed rate" is low too, but with the banks lending at anywhere between 6.50%-9.x+% it is still criminal.
The alleged reason for the low (fed) rate is that inflation is low and so the economy can be stimulated with these low rates. However, I don't know how they calculate the "inflation rate" because virtually nothing that I want/need to buy, except PC-related stuff, has stayed level in price. It has ALL gone up.
I even hear the news (local, national, CNN, etc) report the low inflation rate (say, 1.2% per year annualized) and then a few news items later they will say that the cost of X has risen 17% over the last 2 years and the price of Y has risen 35% over two years.

What it all comes down to is that we are getting screwed by our own government, increasing daily the gap between rich and poor and all the while losing more and more BASIC government sevices.


>
>Too many questions, some of them quite tricky, I know!
>
>Hilmar.