Federal Reserve Paying Banks Interest Rate That Is Eight Times Market Rate
April 22, 2011
Robert Wenzel, Economic Policy Journal
4/21/2011
It’s probably not clear to most Americans how Fed Chairman Ben Bernanke has changed the rules of the game for the benefit of bankers since he has taken over as chairman. He calls these changes new Federal Reserve “tools”.
One important example of Bernanke’s new Federal Reserve ”tools” is the paying of interest on deposits that banks leave with the Federal Reserve. It has resulted in over a trillion dollars accumulating at the Fed, as what is known as “excess reserves”. The Fed is paying banks EIGHT times equivalent market rates when they keep the funds as excess reserves.
And now… the rest of the story. …..
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Harold
Harold wish you could paste this short statement with option for comments and send it to the White House web page asking “need explanation”