Savings accounts and the Fed

Nobody knows?

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.

With mortgage rates so low, savings account rates are even lower.

I remember those great savings rates & being taught it pays to save money.

I talked to a banker about the savings rate, telling them that the savings rate isn't keeping up with inflation but they told me that the fed sets the rate not them.

Maybe I'm confused, but even when interest rates hovered around 7%, savings accounts still paid like 2%. What changed that allows banks to borrow directly from the Federal Reserve at almost 0% instead of having to borrow the little guy's money and pay a decent amount of interest to us?

There is zero reason for banks to ever borrow money from anyone but the Federal Reserve, when did this change?

Thanks for the pin, hopefully we can get some good answers in here. This is something that has bugged me ever since I can remember.

[link to www.youtube.com]

silver pays better.....

Because with $16 trillion in debt, the Fed has to keep interest rates artificially low or the interest payments on all that wasted buckage would run us into a quick bankruptcy.

Since there are few or no investors willing to literally lose money buying Treasuries, the fed has to print money and buy them for ourselves. That dilutes the value of our currency. So we have inflation and artificially low interest rates.

Welcome to currency manipulation and devaluation.

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

.

so we'll invest our money in the markets, where it's much easier for them to steal, either way, stocks/commodities or t-bills, they are stealing what you worked to get, on their side, they created the money from thin air.

+ it helps that the rule of law is dead

"Because with $16 trillion in debt, the Fed has to keep interest rates artificially low or the interest payments on all that wasted buckage would run us into a quick bankruptcy.

Since there are few or no investors willing to literally lose money buying Treasuries, the fed has to print money and buy them for ourselves. That dilutes the value of our currency. So we have inflation and artificially low interest rates.

Welcome to currency manipulation and devaluation".


Absolutely correct! The only way to prolong the inevitable collapse is to keep interest rates at or near zero. In the final analysis it won't matter, collapse will occur. However, it delays the bankruptcy.

This country (The US is a corporation) has been operating in bankruptcy since at least 1913.

economic slavery.

People need to think and realize that there is not 16 trillion dollars in the entire world. How in the fuck are we supposed to pay it back? We can't...

That was a different money world time it actually had more stable value back then.
Now it just valued off of debt loans & interest.

Stable CD dont even pay much right now.
Many now play the world stock market game in hope of quick high yield rollovers.

Finally, on August 15, 1971, President Richard M. Nixon announced that the United States would no longer redeem currency for gold. This was the final step in abandoning the gold standard.

[link to www.econlib.org]

You have to read up on monetary theory to solve the riddle.

Rate of interest doesn't matter once you understand the mechanics of the monetary system and there IS a way control the flow of money you spend but I will leave that up to you to find out.

Remember every you buy has to be financed somehow and you can do it without resorting to conventional means eg loan from bank, or dome other third party.

...OK, to many kids slept during Econ 101...

The average annual inflation rate from 1900 to 1970 was approximately 2.5%. From 1970, however, the average rate hit about 6%, topping out at 13.3% by 1979. This period is also known for "stagflation", a phenomenon in which inflation and unemployment steadily increased, therefore leading to double-digit interest rates that rose to unprecedented levels (above 12% per year). The prime rate hit 21.5 in December 1980, the highest in history
[link to en.wikipedia.org]

..so when lending rates were HIGHER..savings rates were HIGHES...they paid you 7-8% and lent it out at 10-11%...today,borrow rates, for good credit folks, is below 4%..banks lend at 2-3% above inflation, approx., so low mortgage rates translates into low saving rates...I remember US treasurys at 12% !!!!! the most secure investment in the world paying 12%...and car loans were 22% and home loans were 18%...my lone denial was a home loan in 1979 in S Cal...18% interest..excellent credit and 2 good jobs...denied on a home loan....now you know why....

I remember 8% for some reason also

It's called CORPORATE GREED....

It's what got us where we are today....

It hasn't been fixed and it will be around forever


Enjoy making no interest on savings

Enojy paying high credit card interest...

Enjoy losing your 401k and other retirement money..

Enjoy your $7 an hour jobs...

Enjoy a lifetime of more of what we are experiencing right now?

How does it feel?

It's the new normal..

Banks and Big Business and Liberals learned it's easier to fuck you out of your money than to lose theirs..

I smell what The Rock is cooking.

The credit unions still pay a good amount as long as you meet the requirements like direct deposit and 10 debit card transactions

Look it up
Stop using banks
Use credit unions

I got 8% on CD's in 1985 when my dad died. Million dollars at 8%. The good old days. Now I have 6% annuities. Not so good.

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?

Fear

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.

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?

Anyways, while Congress may not be able to control the fed, they sure as hell can control banks. Do they have the balls to do it is the question.

Sadly, the answer is probably no.

I have had a savings for several years, not much just several thousand and come to think of it I havent had any interest added