Oliver Stone

Oliver Stone
Untold History of the US

Wednesday, November 2, 2011

Fed Funds Rate VERSUS Rate Charged to OMOTS

Banks like BOA, JPM and Citi are paying interest on loans they BORROW FROM THE FED and EACH OTHER at between 0% and .25% while they charge interest to us the OMOTS at between 3.75% and 4.5%.

That's a WHOPPING 18 times more or 1800% margin on interest paid by the member banks versus charged to mortgage clients.

So the FED who owns around $6,000,000,000,000 of US debt is lending at near zero while the OMOTS is forced to do TWO THINGS simultaneously:

#1. Pay interest at an 1800% mark up AND

#2. Have his taxes rifled to REPAY THE DEBT plus interest held by the same system that is charging him interest on the mortgage he holds with the member banks of the FEDERAL RESERVE SYSTEM.

The OMOTS is getting NONE OF THE BENEFITS of lower interest rates.

Savings accounts are getting screwed. Short term savings incentives via CDs are a joke and with the fees banks are attempting to implement, it makes no sense to save, although BOA was forced to back down on its fees earlier this week.

Let's see what the other banks will do.

The incentive for retirees to save is DISMAL. Those members of society who worked hard, put deposits of 20% down on houses and paid their mortgage off in full are getting the rough end of the interest stick. They paid their mortgages off in a VERY HIGH INTEREST environment but get a raw deal on savings.

A national DISGRACE!

Is there any wonder why US personal savings are so low?

Its obvious. There is no incentive and the more the FED SCREWS with the monetary economy, the worse it will get for those who don't wish to gamble their hard earned money away in a volatile environment.

But "Helicopter" Ben Bernanke won't make any changes today to his PRO-BANK-ANTI-CONSUMER policies.

Watch where Bernanke goes upon retirement. He'll be rewarded by his banking buddies with a plum job at the helm of some bank or other.

There is no point in putting money in a savings account since the interest is negligible, forcing people to put it into more riskier investments, a volatile stock market or bonds.

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