Certificate Of Deflation

Although I was a young teenager at the time, I vividly remember the excitement my parents and their friends exhibited during the early 1980's when they talked about CD's, which at the time meant Certificates of Deposit. Since I was 13 years old back then, a 15% rate of annual interest seemed like a lot to me, and it was. In fact it was the top of the interest rate market. Rates had nowhere to go but down from there.

I highly doubt they ever saw the collapse of CD rates coming. They were thrilled to be getting 15% on their money from a product they could buy at their local bank branch. Of course inflation was clocking in at 15% during that time so the real rate of return on their savings investment was closer to zero than fifteen, but hey - they were getting a lot of interest with no risk so everyone was happy.

If you want to know what the future of the stock market looks like, look at the chart of the 3-month CD and then prepare accordingly.