US banks warn you may have to pay to make a deposit soon

[ATCclears]

http://rt.com/business/us-banks-charge-customers-255/

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[AMProducts]

Ok, I get the headline, but the rest of that logic is pretty murky...

So because the fed is keeping the federal funds rate (interest rate) at essentially zero and has been keeping it at record low rates since 2001/2002 (following 9/11), banks, and the government can borrow massive sums of money from the federal reserve for 0% interest. Which means they can take free money, and pour it into the stock market and buy things they think are going to go up in value, since there is no impetus to make money lending it to people because rates are so low.

So in order to make money from "retail" banking, they need to charge people to make deposits (which for them is more free money). Wha? Tha? Fuc?

The only way I can really make sense of this article is to assume that retail banking has a fairly high overhead (makes sense... lots of branches, ATMs, employees, not to mention all the debit fraud they have to absorb) however there is little explanation as to how this figures in.

 

[ATCclears]

It's just another dollar grab as the easy sources of money disappear, and many former consumers slide into poverty. The bankers will milk the cow dry...

Peter

 

[AMProducts]

If you're principle activity is consumption you will always be running a deficit and will eventually slide into poverty. This is definitional. Now if you are a producer the constant quantitative easing and low interest rates do nothing but erode the wealth you have produced. Back in the late 1990's the "irrational exuberance" of the stock market caused the fed to keep interest rates high to "fight inflation" which is a good thing, however when interest rates went in the crapper after black april (april 2000) and then 9/11, the economy will panic if interest rates go up, because debt levels are now so high everything is "too big to fail". In reality, the only people who will really lose their shirts in this scenario is the banks and government employees.

It's a stupid set of policies that have brought us to this point, the real question is, does anyone in a position to do anything about it have the courage to do so. Funny thing about it is, despite the US walking into the quicksand that these stagflational debt traps are, the rest of the world jumped head first off the high dive and is in such a crappy position compared to the US, we look like the most solid investment out there. Perhaps they're right, at least the US has the possibility of turning everything around it it just brings the deficit and debts under control and increases interest rates, despite some initial uncertainty and some losses that should have happened in 2008, the US economy will rebound in a big way.

Since I seem to be on a run of quoting things... "the things you own, end up owning you" - Tyler Durden "Fight Club"

 

[motoman98]

Solution for the average guy? Go CREDIT UNION! Skip the commercial Banks.

 

[Martini_Up]

Second the Local CREDIT UNION