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Savings accounts and the Fed

 
Anonymous Coward
User ID: 2849260
United States
08/18/2012 02:16 AM
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Re: Savings accounts and the Fed
At this site they give 7 reasons for the low interest rates.

[link to www.nytimes.com]

I can't say that I agree with those reasons though. I found the comments posted on this page about that article to be more informative.

[link to bucks.blogs.nytimes.com]

To give you an idea as to what the readers had to say, I'm posting parts of a couple of the comments.

the only time anything trickles down is when those CEOs and investment bankers urinate

During the 1950s & 1960s the general rule of thumb for banks was to pay 3% interest rate to consumer depositors and charge 6% interest rate on consumer mortgages. That was the general "spread." By the mid-1990s, banks were paying 1% interest rate on consumer deposits yet charging 8% interest rate on consumer mortgages.


A lot of the people commenting thought greed was a part of the equation.
SaveAmericaFightNWO

User ID: 19096721
United States
08/18/2012 02:56 AM
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Re: Savings accounts and the Fed
I moved my shit out today. Not going to get .1% interest to let them lend out my principal 45X with interest... a joke. Will put it in safe dividend paying ETFs or whatever.
 Quoting: Cult of Personality


Why would you have your money in US dollars anyway? Should be all in tangible items and assets.

Land, water, seed, guns, ammo, solar powered generator, atmospheric water generator, tons of filters, tons of storable foods, an underground bunker 1/4-1/2 mile deep, 40-80 feet is just okay.

Last Edited by SaveAmericaFightNWO on 08/18/2012 02:57 AM
"what would you do if you, knew all the things we knew. Would you stand up for truth, or would you turn and walk away"
Anonymous Coward
User ID: 14899339
United States
08/18/2012 03:47 AM
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Re: Savings accounts and the Fed
All told, anyone looking for all of the U.S. dollars in the world in July 2009 could expect to find around $8.3 trillion in existence.

[link to money.howstuffworks.com]

Way less then 50%.
Anonymous Coward
User ID: 20569884
United States
08/18/2012 03:51 AM
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Re: Savings accounts and the Fed
When I was a kid (70's) I remember having a savings account that actually paid pretty well. It was like 7-8% interest annually and we were taught by our parents that it paid to save your money.

 Quoting: JesseDart


You misremember. You MIGHT have gotten 5% on an ordinary savings account then.

.
 Quoting: Anonymous Coward 6685296


I remember my savings account being 6% in the early 80's and my parent's complaining how far down the rates had come.
Anonymous Coward
User ID: 2849260
United States
08/18/2012 04:10 AM
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Re: Savings accounts and the Fed
When I was a kid (70's) I remember having a savings account that actually paid pretty well. It was like 7-8% interest annually and we were taught by our parents that it paid to save your money.

 Quoting: JesseDart


You misremember. You MIGHT have gotten 5% on an ordinary savings account then.

.
 Quoting: Anonymous Coward 6685296


I remember my savings account being 6% in the early 80's and my parent's complaining how far down the rates had come.
 Quoting: Anonymous Coward 20569884


I remember 5%. My sister used to work at a bank years ago and she remembers 7%. The rates more than likely varied from bank to bank back then as they do now.
Anonymous Coward
User ID: 1541801
Canada
08/18/2012 04:15 AM
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Re: Savings accounts and the Fed
Thanks for the enlightening posts, even if some of them started out with a condescending insult.

I guess my next question is, that IF and thats a big if, the economy recovers someday,

Will the banks continue to be able to borrow from the Federal Reserve for miniscule amounts of interest, or will they be forced to use deposited funds for loans resulting in a non-insulting amount of interest paid to depositors?
 Quoting: JesseDart


It seems like you are under the impression that banks actually lend out your deposits, they don't, this is just the simplistic line that is generally promulgated because most people do not want to get into the convoluted minutia of fractional reserve banking. If your deposit was really lent out then that would mean you wouldn't always have access to it, since that is not the case, for savings accounts anyway, it clearly means your deposit wasn't directly lent out. You would have to read up on fractional reserve banking to understand why and how interest rates are set by the Federal reserve. The same as they were when you got %8 on your savings account.

It is also best to have an understanding of how the system evolved over time to be able to put it into context.

The origination of modern fractional reserve banking started with goldsmith's who held gold in their vaults for clients who would get receipts. People began trading the receipts and using them for the payment of goods instead of getting their gold from the vault, making a payment and then the other party having to bring the gold back to the goldsmith and deposit it back in the vault. The goldsmith's realized that at any given time the majority of the gold would remain in the vault so they would lend it out and make a profit. If, say, only %10 was withdrawn at any given time then they could lend the other %90 out and no one would be any wiser because they still had enough liquidity to cover the withdrawals that were only %10 of the total at any moment. If everyone withdrew at once they would be caught with their pants down and in essence, with alot of modern financial wizardry built on top of it, this is the basis of the system in place today.
EXCALIBUR
User ID: 13037068
United States
08/18/2012 04:37 AM
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Re: Savings accounts and the Fed
One major reason they are keeping rates low is to keep the banks looking solvent. The investment banks, hedge funds etc, have billions in US Treasuries. If rates go up, the value of the treasuries they hold will go down. And it will become obvious that the banks are toast. The derivatives will implode. The dollar will crash and the bansters will be working at Wal Mart :)
Anonymous Coward
User ID: 1212477
United States
08/18/2012 04:51 AM
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Re: Savings accounts and the Fed
Singapore bonds are paying 11%.
2012Portal
2012Portal - The Mayan Calendar

User ID: 15022013
Netherlands
08/18/2012 04:56 AM

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Re: Savings accounts and the Fed
Banks used to be banks and secured your money. Today, they invest just like the big investment firms, directly in the markets at large, meaning they generally take more risks, through a broader bottom-line which does not necessarily include the little, normal depositer.



It is complicated and that is a sign in and of itself, in part:

Glass–Steagall Act

"By the time the affiliation restrictions in the Glass–Steagall Act were repealed through the Gramm-Leach-Bliley Act in 1999 by President Bill Clinton, many commentators argued Glass-Steagall was already “dead.”[4] Most notably, Citibank’s 1998 affiliation with Salomon Smith Barney, one of the largest US securities firms, was permitted under the Federal Reserve Board’s then existing interpretation of the Glass-Steagall Act.[5] Clinton publicly declared, "The Glass-Steagall Act is no longer relevant."[6]"
SOURCE:
[link to en.wikipedia.org]
Mayan Calendar and 2012-
From the love of power to the power of Love -
[link to 2012portal.myfeedportal.com]
Anonymous Coward
User ID: 19852008
United States
08/18/2012 05:02 AM
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Re: Savings accounts and the Fed
When I was a kid (70's) I remember having a savings account that actually paid pretty well. It was like 7-8% interest annually and we were taught by our parents that it paid to save your money.

Fast forward 30 years, and the longer you have your money in the bank at today's rates, the more you lose.

My question is this, what changed? Was legislation passed that allowed banks to borrow directly from the Federal Reserve at ridiculously low rates or something?

I'm hoping somebody knows because this is something that has bothered me for years and I can't seem to find the answer.

Anyone?
 Quoting: JesseDart


ZIRP . Search on this and you'll find a whole lot to read about why monetary policy is doing the weird things it's doing now.
Anonymous Coward
User ID: 19522042
United States
08/18/2012 05:07 AM
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Re: Savings accounts and the Fed
When I was a kid (70's) I remember having a savings account that actually paid pretty well. It was like 7-8% interest annually and we were taught by our parents that it paid to save your money.

Fast forward 30 years, and the longer you have your money in the bank at today's rates, the more you lose.

My question is this, what changed? Was legislation passed that allowed banks to borrow directly from the Federal Reserve at ridiculously low rates or something?

I'm hoping somebody knows because this is something that has bothered me for years and I can't seem to find the answer.

Anyone?
 Quoting: JesseDart


What was the inflation rate back then?
Chances are the inflation rate was higher than your interest on savings, and you were not paying the mortgage and grocery bills as a kid.
We are in a rigged, Ponzi economic system where the economic
indicators are manipulated. Libor rate comes to mind.

When food and fuel are not calculated in the inflation index, that is a rigged system.

Money printing --that is a rigged system.

John Corzine -- not in jail, proves the criminals are in charge.
Anonymous Coward
User ID: 17584550
United States
08/18/2012 05:15 AM
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Re: Savings accounts and the Fed
This. Is. EXACTLY. WHY. YOU. NEED. TO. SUPPORT. Ron Paul's. AUDIT-THE-FED!!!!!

(in Senate RIGHT NOW! Call your state reps. Asap)!!

They should be tracked the same way they track us. If they had been, & The Fed was audited, you'd have the answer to this thread question.
Game. Over.
Anonymous Coward
User ID: 17584550
United States
08/18/2012 05:25 AM
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Re: Savings accounts and the Fed
My question is this, what changed? Was legislation passed that allowed banks to borrow directly from the Federal Reserve at ridiculously low rates or something?
 Quoting: JesseDart


What? Are you fucking stupid? You think Congress has any control whatsoever over the Fed and "the banks?"

You have a lot of reading to do.
 Quoting: Anonymous Coward 7110254


Easy there tough guy. I'm no economist and am just asking questions. No need to be insulting.

What you doing in Thailand anyways? Renting ladyboys from the hills?
 Quoting: JesseDart


BangCOCK-Thai-boy is the fucking stupid one OP. Audit the Fed legislation just passed Congress & is currently in Senate so obviously they have a say on what is going on. Idiots abound....
Anonymous Coward
User ID: 21804745
Sweden
08/18/2012 05:26 AM
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Re: Savings accounts and the Fed
When I was a kid (70's) I remember having a savings account that actually paid pretty well. It was like 7-8% interest annually and we were taught by our parents that it paid to save your money.

Fast forward 30 years, and the longer you have your money in the bank at today's rates, the more you lose.

My question is this, what changed? Was legislation passed that allowed banks to borrow directly from the Federal Reserve at ridiculously low rates or something?

I'm hoping somebody knows because this is something that has bothered me for years and I can't seem to find the answer.

Anyone?
 Quoting: JesseDart


You see.. when the economy started to go bad.. and due to everyone being so deep in dept.. there was only one thing that could keep the system afloat from a total and instant collapse:
To lower the interest rates.

But now.. as they are almost 0%... there isn't any more of this fix available.
If the economy goes even worse.. well its the end of the world as we know it.
Anonymous Coward
User ID: 1538644
United States
08/18/2012 06:15 AM
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Re: Savings accounts and the Fed
Watch the movie Zeitgeist.
Anonymous Coward
User ID: 1073423
United Kingdom
08/18/2012 06:15 AM
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Re: Savings accounts and the Fed
They are stealing the money of savers by devaluing its purchasing power and lying about (real) inflation (shit you need = more, shit you don't = less) in the hope that most of you are too fucking stupid, ignorant, lazy and greedy to realise what is actually happening ...

... and it's working



Sheep! Baa baa baaaaaaaaaaaaaa






sheep
Anonymous Coward
User ID: 21662845
Australia
08/18/2012 07:05 AM
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Re: Savings accounts and the Fed
You can get 6% here
Anonymous Coward
User ID: 17584550
United States
08/18/2012 07:35 AM
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Re: Savings accounts and the Fed
Morning folk bump
bump

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