The Federal Reserve Is Immoral

During the first few days of each month comes a task that is increasingly approached with dread around here and, unfortunately, that condition is likely to persist for some time.

Shortly after banks make their month-end update to various short-term savings accounts that we hold, these balances are queried, only to find that, almost without exception, interest credited is less than it was in prior months and far less than it was eight or ten months ago.

Why?

Largely as a result of the Federal Reserve keeping short-term interest rates pegged to zero.

You see, aside from some Certificates of Deposit that were locked up late last year which, today, provide the strangest of feelings during a very strange period in history (i.e., feeling lucky to get about 2.5 percent interest for a one-year CD), it's nearly impossible to get more than a two percent return these days on any kind of an FDIC-insured account and, more likely than not, you'll get less than one percent.

Speaking as one who knows from experience, there's a big difference between one or two percent and five or six percent, what used to be the "minimum" rate of return for a super-safe savings account backed by the government.

More importantly, if this is causing us angst every month, I can only imagine what it's doing to the budgets of other savers whose finances are far less comfortable than ours.

Put simply, the freakishly low short-term interest rates that the Federal Reserve is jamming down everyone's throat are immoral and, maybe, just maybe, a lot more people are beginning to see this, along with other practices of our central bank that are just not right.

Maybe, just maybe, something will finally be done about reforming (or, as suggested by Rep. Ron Paul, abolishing) this banking cartel - hopefully before the Fed celebrates its 100-year anniversary in a few years.

Just to be clear on the terminology here, Merriam-Webster offers the following:

immoral
adjective
not moral; broadly : conflicting with generally or traditionally held moral principles

moral
adjective
1a: of or relating to principles of right and wrong in behavior

Setting aside questions about the dark veil of secrecy surrounding who and how much the central bank has been helping with their problem loans, problem assets, and problems staying solvent, there are at least three ways that the organization David Wessel calls "the fourth branch of government" is acting badly these days - by punishing savers, by enriching the banks, and by fleecing the poor.

Of course, none of this is really new - it all just seems a whole lot more relevant today than ever before given the current state of affairs in this country and around the world.

Punish the Savers

As noted above, it used to be that you could always count on getting five or six percent interest in a "no-risk" savings account backed by the FDIC. In fact, going all the way back to 1955 (when the interest rate data at the Fed's website stops), the average short-term lending rate is right between those two marks - 5.66 percent.

Ever since I was a teenager, I can remember thinking, "If I could somehow amass a million dollars, that would surely generate enough money to live on for the rest of my life".

Well, welcome to the 21st century, where the asset bubbles keep a-poppin' and the interest rates keep a-droppin'.

Over most of the last hundred years, aside from the dollar losing more than 90 percent of its purchasing power (versus a loss of zero during the prior ten decades), there hasn't been too much to complain about in the Fed's management of money and interest rates but, since asset bubbles and the attendant "mopping up" process have become a way of life, the rate of return on savings has been abysmal.

With the exception of the "baby-steps" rate raising campaign a few years ago, the Fed funds rate has been below two percent since 2002 - after the decade's first asset bubble met its pin.

Now, if there was a good reason for keeping rates so low, this might all make some sense to senior citizens who have looked disappointingly at their bank statements for years, but given the fact that the low-rates in 2002-2004 led to the housing and credit bubbles forming and then bursting a few years later, and here we are with even lower rates today, all of this should make anyone with half a brain realize that there is something seriously wrong with the system as it currently operates.

In a nation in dire need of internal savings, the fact that savers are being punished as never before is just plain wrong - immoral - and the idea that we live in an era of "low inflation" is just salt rubbed in the wounds of senior citizens who, year after year, watch prices for health care and energy rise by some multiple of the one or two percent they can earn on their savings.

Twenty years from now (perhaps sooner), they'll look back on today's monetary policy and say to themselves, "What were they thinking, punishing the savers like that when the U.S. desperately needed savings?"

Enrich the Banks

As if it weren't bad enough that savers are cheated every time the Federal Reserve lowers interest rates, the worst part is that banks are the beneficiaries.

You see, in addition to buying up many of the bad assets previously held on banks' books over the last year or so - the result of waves of imprudent bank lending - when the Fed lowers interest rates it helps to make the business of banking much more profitable and, conventional wisdom has it that our finance-based economy will then begin to recover.

And when the banks can borrow at these super-low rates, that means that savers can't earn much more in interest.

Banks come first and savers are far down on the list.

Why does the system work this way?

Well, most people haven't got a clue what the Federal Reserve is or what it does (though, understandably, there is growing interest in this topic, ever since the wheels fell off of the global economy last fall), but the crucial bit of information that the now-slightly-more-curious public should learn quickly is that the central bank was not set up to help the people or the government, but, rather, to help the big banks.

In fact, according to G. Edward Griffin, who happened to write a whole book on the subject, the very reason that the Federal Reserve was formed back in 1913 was so that big banks could wrest back control of the banking system from the many small, fledgling, independent banks all around the country that were taking away their business.

Look around you today. You might see lots of little banks failing, but only a few large ones ever go under and none of the country's biggest banks ever fail.

The Fed was created by the big banks, for the big banks, and its unwritten "mission statement" is to do whatever it takes to ensure the survival and profitability of those big banks, getting the government to step in with public money when necessary for "the greater good", effectively socializing the losses while keeping the gains in private hands.

That's why what we have today - a wholly unsustainable system of ever-expanding credit and debt dominated by a handful of "too big to fail" banks - keeps getting propped up.

The masses are led to believe that credit is the "lifeblood of the economy" when, in fact, credit is the lifeblood of a banking system that has, over time, sucked the life out of the economy.

It's hard to imagine anything that is more immoral than the Federal Reserve's role in this process, now almost a hundred years in the making.

Fleece the Poor

In arriving at the third and final way that the Federal Reserve is immoral, clearly, that last thought in the previous section was premature.

In fact, there is one very good example of something being done today by the central bank that is even more immoral than a nearly century long wealth transfer from the public sector to the private banking system - the ongoing assistance being provided by the Fed in helping the banking system reach out and find new customers so that every possible dollar can be extracted from them.

You see, the country's big banks (along with the central bank that serves their interests) would much prefer that poor people all across the country not go to a place like you see to the right and, for a small fee, convert their paycheck into cash and forever live within their means.

Bankers would much rather see the nation's poor open up checking accounts and then venture further into the world of modern day banking, quickly learning to spend well beyond their means.

Left unsaid in the Fed's many efforts to reach out to the "unbanked" is that checking accounts are a sort of "gateway drug" for many people - a road to debt serfdom where, in addition to paying interest on money borrowed to buy stuff that they don't need, these "newly banked" poor will also be fleeced by a bewildering array of fees and charges in a system that is set up to systematically suck as much money out of as many people as possible.

Over the years, the Federal Reserve has made great efforts to attract new customers for banks, in some cases providing cartoon characters to make the whole idea of debt serfdom seem like a friendly sort of condition, much in the same way that Joe Camel once attracted new smokers.

Under the guise of "education" and with "consumer protection" as its goal, the Federal Reserve might seem to be "looking out for the little guy", but they're not. They've had the power to do this for many years now but, for obvious reasons, have exercised their "power to protect" the consumer only sparingly, allowing millions of subprime borrowers to give the housing bubble one last giant hurrah before it finally burst.

Fortunately, it appears that the Obama administration would like to see the American consumers' interests watched over by some other group and for good reason. A report earlier in the week in the Financial Times detailed how big banks in the U.S. plan to extract almost $40 billion in overdraft fees from American consumers whose balance sheets haven't been bolstered by government bailouts.

It seems that, with the collapse of the mortgage finance bubble, big banks are now reverting to a profit model that is driven more by extracting fees from their customers wherever possible and overdraft fees from the cash-strapped are "the mother lode".

A full 90 percent of overdraft fees come from just 10 percent of all checking accounts and most of this 10 percent have low credit scores and/or are recent entrants to the world of mainstream banking.

Not surprisingly, the highest overdraft fees come from the biggest banks - Citigroup, Bank of America, JP Morgan Chase, Wells Fargo, SunTrust, and Citizens Bank.

For banks, overdraft fees are a low risk, high profit part of their business, not something that is usually mentioned as part of the Fed's outreach programs. It is a sophisticated, large scale sort of "payday loan" system that many Americans fall prey to and, as long as customers have their payroll checks automatically deposited, the bank will always have first crack at the money and people will continue to spend more than they make because, when you get down to the very basics here, most people aren't very good at math.

But, banks are.

Maybe Ron Paul is right - the Fed should be abolished.

Then markets could set interest rates, banks would have to fend for themselves, and there would be one less group helping to extract what little money the poor have left.

Comments

[User 357705:]

Its good to see that more and more have come to the conclusion many of us came to when everyone else was worshiping at Greenspan's feet. Hah!

Aug 14 12:19 PM

[Teutonic Kn...:]

Speaking of Moral Hazard, the Scriptures tell us, in John 8:1-11 "Go and Sin no More"...

Aug 14 12:34 PM

[Econ Base:]

Try laddering long term CD's. I have been writing about keeping significant portion in cash for a while now. Back those CD's with precious metals gold/platinum. Good luck!
portfolioforlife.blogs...

Aug 14 12:39 PM

[PainfullyAware:]

How is the "Lobbyist", (Linda Robertson) the Fed hired in July, doing at "Influencing Congress". Her Enron Days Should Have Prepared Her For "Anything That Comes".

Ron Paul is one of the only Representatives that I hear that has rational arguments for his principled conclusions on monetary policy. Most of the "Others" give "Platitudes And Concern" with a "We're Working Hard On It" at the end. RIGHT - Working Hard Like You Did To Read The TARP Legislation? More Than Just The Fed Should Be "Audited" And Made Public.

The World Does Not End When Systems Fail - Humans Spontaneously Restructure.

If Detriment Is Recognized - Why Continue Current Path? To Do So Likens To The "Addict" - Destroy The "Body" For "The Short Term High".

One Thing Is For Sure - We Are Going To Get Change. (I just hope the "Light Of Liberty" is not "Extinguished In The Process". I Am Anxious That "Fearful Fools" Will Sell Their Birth-Right For Faux Comfort.)

Aug 14 01:30 PM

[reveigel@ms...:]

When alll is said and done, who is to blame? The Fed? The banks? Who established the Fed? Congress! Congress can 'un-establish'.
Why doesn't it? What would the banks do without the collusion of the Fed (and government)? Our nation just might be in much better financial shape. And so would the banks.

Aug 14 04:25 PM

[tunaman4u2:]

As a middle class guy with some 40K in savings I feel pressured to spend & put it in the market when I'm not comfortable with that...
The Fed has made it MORE uncomfortable to hold cash like you say...
I agree with your article bro.
My grandfather made 100 bucks a week... it feels like they are going to repeat inflation this with my generation & saving is the worst thing you can do.
Buy stocks? Buy real estate? GLD? I dunno, its a hard time

Aug 14 05:14 PM

[TxTim:]

By definition QE is the Fed printing money to buy treasuries. They don't need to borrow money to engage Quantitative Easing. Let's also make a clear distinction: Community Banks have no motivation to loan money to people who are not credit worthy. Big banks and the former investment banks did because they could fraudulently securitize the crap loans they were creating. Make sure that when we talk about "banks" we make the distinction.


On Aug 13 11:14 AM Moon Kil Woong wrote:

> The banks need your money for free so they can loan it to people
> who are not credit worthy or to loan it to the Fed to engage in QE.
> One makes money the other doesn't. But both don't do a lot of good
> for the economy. Well, on the other hand you could always deposit
> with Goldman or JP Morgan who play with stocks and commodities to
> make a fat profit off of 0% interest deposits.
>
> I am sure if you ask Bernake he would tell you it's all good for
> the country. Perhaps he might go so far as to say, "To oppose the
> Fed's will is being selfish." That's how morally backwards we have
> become.

Aug 14 08:35 PM

[dcb:]

You have to be th biggest looser ever, or just paid by the banks to say this, or working for the banks. It isn't idealogical hoigwash, but the truth. I have done extensive research on the fed during this crisis, from the get go, and everything this guy is writing is the truth. In fact there is ample evidence that the "depression" that caused the creation of the fed was designed to happen to produce the crisis.
People like you make me sick to my stomach. It's folks like you who spread false beliefs that are believed by the masses while the bankers lead us to sheep to a slaughter to feed their bonuses. My advice to you is to spend the past two years learning the front and back fo this crisis, the policy responces to this crisis, and then have something to say.
It's people like you who are the case of this mess. You believe all the shit the shovel, spread it over the airwaves, the people believe it and they don't do the only appropriate things which is to riot in the streets. This is why we get screwed over an over by washington and corporate interests. when you are stupid enough to believe they are actually helping you you are just allowing them to make you poorer.
the banks aren't lending their cheap money. the fed is giving the banks profits by buying back bonds they sell at a loss to the fed but a prifit to the banks. the banks give 44% of profits as bonus!!!!. the cheap money is getting invested in thre market causing a stock bubble, which drives up oil prices, and leads to further inflation while we get no interest.
The Fed tells me there is no inflation. That's a lie and I knw it each and every day. the bus, subway, everything costs more. food hasn't dropped with commodities, health insurance.All still going up.
Our founding fathers started a revbolution against the british for less than what the fed is doing to us. We elect people for change and they stock the cabnet with goldman stooges. Wake up america because when the dollar doessn't buy anything, and you are working to the day you die just to eat dogfood lloyd blankfien and Obama will be having brunch on their private Island.
Prof William Black, just look him up, knws what is going on. it is the biggest tax payer ripoff in teh history of the world. the bankers (fireman) are running out with the goods while the building burns. they are not even attempting to put out the fire. But you think they are there to put out the fire. They are looting while Rome burns and if we don't do something fast there will be nothing left for anyone not in the game!!!





On Aug 14 12:32 AM FB5000 wrote:

> What a load of idealogical hogwash. Garbage ranting.
>
> And the comments. What is wrong with you people?
>
> The policy response to the Great Depression II was appropriate. Reduced
> short term rates, quant. easing were/are the right things to do.
> Without that the level of lending, GDP growth and unemployment would
> have been significantly worse.
>
> What gems.
>
> Abolish the Fed? That's funny.
> Default on debt. Really you believe that the U.S is at risk of default.
> You are a clown. Tell the folks who bought long treasuries
> Deepen deflation - make it worse so it can be better. Idiotic. Cut
> off you arm when you break it.
> Immoral Fed? That's too funny
>
> You are a bunch of reationary survivialist clowns. Load up your truck
> with ammo, spam and gold and go and live in Idaho.
>
> I love reading this stuff. As long as I know you are all out there
> I know I can make money.
>
> That's all
>
>
>
>
>
>

Aug 14 10:11 PM

[dcb:]

Dear Sir,
> Miss Tett has written extensively about the credit
> crisis
> but once more fails to elucidate salient points
> regarding
> the issue of securitisation.
>
> She correctly points out that research from Pimco
> states
> that "Until the 1980's
> the expansion of nominal gross
> domestic product tracked the volume of outstanding
> private
> credit closely. But since then credit has
> dramatically
> outstripped economic growth as securitisation took
> hold".
> Meaning credit growth beyond nominal growth rate does
> not
> lead to economic growth.
>
> According to Prof. Aswath Damadaran (NYU Stern), one
> of
> the
> foremost experts of valuation today, the most
> significant
> input into a discounted cash flow model is the stable
> growth
> rate. This growth rate can be sustained in perpetuity
> allowing us to estimate the value of all the cash
> flows.
> No
> firm can grow forever at a rate higher that the
> growth
> rate
> of the economy. So, the value all things can't
> grow faster
> than the economy (Damaodaran, Investment valuation,
> Chapter
> 12, 2002)
>
> Therefore, at a certain point the growth of credit
> must
> become unstable when it
> is rises faster that the rate of
> growth in the economy. This is essentially the nature
> of
> our
> financial crisis. Valuations based on the growth of
> credit
> (leverage) were not able to be supported by the
> nominal
> growth rate of the economy.
>
> There are additional features to our economy that
> have
> happened since securitisation has taken off. The
> stock
> market has grown faster than the economy, CEO pay has
> gone
> from 30X to 300X of the average American worker, real
> wages
> have fallen, and wealth disparity has reached heights
> not
> seen since the great depression. All of these issues
> are
> in
> fact related.
>
> Securitisation has allowed those whose pay is based
> upon
> leverage (credit)to increase many times faster than
> the
> growth of the real economy and the vast majority of
> workers.
> Securitisation has allowed the experts on credit risk
> and
> valuation (bankers) to
> off load these risks onto the
> public.
> This has created instability (highly distorted
> valuations)and a moral hazard where society bears the
> brunt
> of costs, while bankers and CEOs reap the benefits.
>
> When Ms. Tett reports that respected figures such as
> William Dudley of the NY Fed consider it paramount
> that
> securitisation markets get jump started if we are to
> recover
> she fails to mention that Mr. Dudley, as a former
> managing
> director of Goldman Sachs, and the majority of people
> who
> are calling for this to happen are the very people
> who
> have
> benefited the most from securitisatiion.
>
> I hope the American people will wake up and see that
> efforts to jump start securitisation are nothing more
> than
> an attempt by those who caused the crisis to restart
> the
> system that allowed them to reap the rewards and off
> load
> the risks of that system onto others.
>
>
> With these facts in mind one must wonder what the
> point of
> the Feds easy credit (money)policy are. Are they
> benefiting
> society? Not very much. Are the benefiting wall street
> and
> the banking class? Well, Goldman Sachs profits answer
> that
> along with a stock market that does not reflect
> economic
> realities.
>
> It also answers the inflation issue. Growth in money
> supply
> faster than the ability of society to use it (nominal
> growth
> rate) has to result in inflation or asset price
> bubbles.

Note securisation and cheap money are the same thing both have allowed debt to climb much faster than GDP. with cheap and easy debt no need to pay a nice living wage, just get them enslaved by having them borrow. This is why americans should jsut stop paying the credit card bills and mortgages as a form of protest. What the hell are they going to do. time to revolt!!!

Aug 14 10:25 PM

[dcb:]

That right, except the banks get to borrow, but the tax payer pays the treasury rate to pay back the borrowed funds, not the banks!!!. they get the teaser rate for ever, we get the late payment penalties!!!


On Aug 14 12:03 PM Teutonic Knight wrote:

> Just a couple of my 2 cents. Zero percent Fed Funds interest rate
> betrays that the Fed and the government are now back against the
> corner and the wall. It also means that they are empowering themselves
> to borrow infinitely and to spend. It reminds me of those enticing
> credit cards offer of the zero percent balance transfer. The catch
> though, is that those offers invariably (and must) come with an effective
> period. Once that period expires it will rest to something like a
> 10%++ rate. So unless you would have an exit strategy it looks like
> a tickling time bomb, and a very big and devastating one. Maybe around
> December 21, 2012 when the Mayan Calendar resets to a whole New Word
> Order?

Aug 15 12:23 AM

[dcb:]

The point is to have a stable economy that benefits everyone, not the few percent of people that own 99% of stocks. You don't get it because you can only think about your own welfare!!!!


On Aug 14 12:37 AM FB5000 wrote:

> Some sense.
>
> Learn from this guy.
>
> The wayto make money is too keep your eyes and ears open.
> I too bought the preferrds and corp. debt. amd financials.
>
> If rates are zero the yield curve is bending upward - you can cry
> about it or you can buy financials.
>
> What a bunch of clowns.

Aug 15 12:26 AM

[Papasmurf:]

America can't be prosperous when so much of GDP is tied up in the unproductive tasks of government and finance. Neither produces goods. Both are necessary functions that need to be forced to be very much smaller. This would encourage employment to shift into real productive activities. Unfortunately, since finance controls the government, both will continue thriving as parasites sucking the life blood out of American prosperity. Eventually American's will decline to participate in this scheme.

The right thing to do would have been to prosecute those responsible for fraud and bring the failed institutions into bankruptcy and resale. This would ultimately force the excess and unproductive people to find productive useful functions in the economy.

Because none of the criminals have suffered for their fraud and because we prevented resizing of the financial and government sectors, we will get more of the same. These parasites will suck an even greater portion from the economy while they try to maintain their living standard. I include congressional fraudsters in my assessment. In fact, they need to be prosecuted first because of their complicity and participation. This has caused the "crisis of confidence" that is preventing recovery. Why would anyone invest or run a business when the deck is so obviously staked against reaping the rewards of one's own labor?

The Federal Reserve needs to be eliminated. They are the root cause that distorted the economic system by causing growth of money supply that was unrelated to productivity. People put their money where they think it will be treated best. At the time, that was housing. People jumped in with both feet because cash was not a good store of wealth. Banksters exploited crowd behavior to fleece American home buyers and investors. In the endgame the robbed taxpayers who thought they wouldn't participate in the bubble. None of this is accidental.

Aug 15 12:50 AM

[Papasmurf:]

America can't be prosperous when so much of GDP is wasted on the unproductive tasks of government and finance. Neither produces goods. Both are necessary functions that need to be forced to be very much smaller. This would encourage employment to shift into real productive activities. Unfortunately, since finance controls the government, both will continue thriving as parasites sucking the life blood out of American prosperity. Eventually American's will decline to participate in this scheme.

The right thing to do would have been to prosecute those responsible for fraud and bring the failed institutions into bankruptcy and resale. This would ultimately force the excess and unproductive people to find productive useful functions in the economy.

Because none of the criminals have suffered for their fraud and because we prevented resizing of the financial and government sectors, we will get more of the same. These parasites will suck an even greater portion from the economy while they try to maintain their living standard. I include congressional fraudsters in my assessment. In fact, they need to be prosecuted first because of their complicity and participation. This has caused the "crisis of confidence" that is preventing recovery. Why would anyone invest or run a business when the deck is so obviously staked against reaping the rewards of one's own labor?

The Federal Reserve needs to be eliminated. They are the root cause that distorted the economic system by causing growth of money supply that was unrelated to productivity. People put their money where they think it will be treated best. At the time, that was housing. People jumped in with both feet because cash was not a good store of wealth. Banksters exploited crowd behavior to fleece American home buyers and investors. In the endgame they robbed taxpayers at pen point who thought they wouldn't participate in the bubble. None of this is accidental.

Aug 15 12:54 AM

[Ames Tiedeman:]

The dollar has lost 97% of its purchasing power since 1913. Enough said. End the FED! How can we say we live in a free market economy when the cost of money is fixed by a body called the FED? END THE FED!

Aug 15 08:55 AM

[steveballmer:]

This is news to you people?
There is no room for morality in business people!

fakesteveballmer.blogs...

Aug 15 02:15 PM

[LKofEnglish:]

the real crime or "immorality" is that public service is now equated with making money and nothing more. the government has offered perhaps the greatest money making opportunity most of us will ever see in our lifetime (so long as you ignore the john jansens of this world who are nothing but losers in life anyways--no integrity if you know what i mean.) the question is what possible future can there be in it? the end result is political chaos and social unrest caused by the very people whose job it is to provide the exact opposite. and needless to say that's their intent! how else can they profit without providing massive misery to everyone? (all with the best of intentions of course.) point being when the soviet union collapsed there was economic opportunity for the "average sovietski." clearly there is here too, and to me it ain't the "banksters" that are the big winners at all. once ben bernanke is done destroying the american financial system (with the best of intentions OF COURSE!) you'll see the oyster of state and local finances opened like they have never been in american history. avoid treasuries, stick with local government (and pulblic school in the country comes to mind, or those backed by tolls on soon to be formerly free interstate highways system) debt and government sponsored capitalist enterprises. if the us government is even able to issue debt once that yield tops out at 12-15% then you can start helping out friends and family who have all seen their savings obliterated by "the people's central banker" (with the universal approval of the entire "media" as well of course) that's provided there still is a federal government that anyone can recognize.

Aug 15 03:22 PM

[Teutonic Kn...:]

dcb - - -

Thank you for this astute observation, admittedly when I wrote my comment I did not think of that comparison, and you hit the nail on the head. It brings out another point, though, we the taxpayer get the double whammy!!! It also confirms my belief and fear of excessive, unwarranted, un-wanted, and un-asked-for government "services".

Long live the Bureaucrats!

TK


On Aug 15 12:23 AM dcb wrote:

> That right, except the banks get to borrow, but the tax payer pays
> the treasury rate to pay back the borrowed funds, not the banks!!!.
> they get the teaser rate for ever, we get the late payment penalties!!!
>

Aug 16 12:25 PM

[dcb:]

Your welcome. If you understood how angry I am each and every day. they borrow money for nothing to rig a stock market that goldman sachs has a monopoly (slp) agreement allowing manipulation and we pay it back for them to (other countries) at Tbond rates. mean while the dollar looses it's value, the propped up market increases all world commodity prices (less reason for flight to safety), so we will also pay more for futire inflation and borrowing costs. I do not understand why there are not riots. Reallty I think we got rid of the British for less.


On Aug 16 12:25 PM Teutonic Knight wrote:

> dcb - - -
>
> Thank you for this astute observation, admittedly when I wrote my
> comment I did not think of that comparison, and you hit the nail
> on the head. It brings out another point, though, we the taxpayer
> get the double whammy!!! It also confirms my belief and fear of excessive,
> unwarranted, un-wanted, and un-asked-for government "services".
>
>
> Long live the Bureaucrats!
>
> TKment

Aug 16 01:44 PM

[dcb:]

The author does not point out the problems with such low costs of capital. Resources are spend in non productive manners that don't have adequate return and are wasted and not good for the overall economy.

Aug 16 02:18 PM

[dcb:]

there was no banking system at this time. fine with me lets abolish the entire banking system.


On Aug 13 06:43 PM Alan Young wrote:

> I must be from a different planet. How can LOW interest rates be
> immoral, when earning interest was considered immoral by the earliest
> civilizations who invented the very notion of "morality"? When some
> religions to this day prohibit lending money for interest, and when
> charging HIGH interest rates (usery) is still a crime in some places?
>
>
> I agree the banks should be better regulated, but is that the Fed's
> mandate?

Aug 16 06:23 PM