Fed 'Repression' Penalizes Savers: Morgan Stanley's Roach
Thursday, October 27, 2011 at 10:01PM 
The Federal Reserve is penalizing consumers by keeping interest rates near zero, threatening long-term savings and the U.S. economy, Stephen Roach told CNBC Thursday.
The Fed said in August it will keep interest rates at the current low rate until 2013.
Roach, Morgan Stanley's [MS 19.41 
2.82 (+17%) 
] Asia non-executive chairman, said doing so raises a serious question "about the financial repression practiced by your favorite central bank, the Federal Reserve. The idea that we can run zero interest rates in perpetuity and penalize savers is absurd."
Roach, who previously told CNBC a national consumer debt forgiveness program might be needed to take the burden off consumers, said the U.S. balance sheet won't be "fixed" in his lifetime.
"We’re going very, very slowly," said Roach, who is also a senior fellow at Yale University's Jackson Institute.
He said one of the big disconnects in the U.S. policy debate right now is a fixation on stimulus packages, the Fed's "unconventional monetary policy," and President Barack Obama's jobs bill at the expense of helping Americans get rid of their increasing debt load so they can save more.
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