''According to a comprehensive analysis of
data compiled from regulatory documents by Bill Moreland and his team
at my new favorite website, www.bankregdata.com, some really scary numbers pop out. Here’s the kicker: ZIRP costs citizens and disproportionately helps the biggest banks, by about $120 billion a year.
Between 2005 and 2007, US commercial
banks held approximately $6.97 trillion of interest bearing customer
deposits. During the past two quarters, they held an average of $7.31
trillion. During that first period, when fed funds rates averaged 4.5%,
banks paid their customers an average of $39.6 billion of interest per
quarter. More recently, with ZIRP, they paid an average of $8.9 billion
in interest per quarter, or nearly 77% LESS. In dollar terms - that’s
about $30.7 billion less per quarter, or $123 billion less per year.''
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