Now that the Federal Reserve has dropped the rate they charge banks to near zero,

[guillaumeb]

will the banks drop the rate they charge for their credit cards? That would provide a huge benefit for everyone who carries a balance.

Sorry, how foolish of me. The banks will be able to borrow at nearly zero percent interest, and loan that money to consumers for 15% and up.

Plus, QE, or quantitative easing, will provide billions more in relief to the huge banks that did so much to ruin the US economy for the bottom 90%.

[Yavin4]

1. No, because the rate they charge you on credit cards pays for...

their luxury yachts.

[guillaumeb]

2. Exactly.

As was said of the previous bailout, the banks got bailed out, and the people were sold out.

[doc03]

3. They may cut that savings interest of .05% and

charge us for watching our money.

[guillaumeb]

5. Do not give them that idea.

Socialism for the rich, austerity for the rest.

[alwaysinasnit]

7. They already have that idea. I believe it is called NIRP.

https://www.democraticunderground.com/?com=view_post&forum=1014&pid=2448164

[guillaumeb]

9. A better idea is to raise wages, and the minimum wage,

which stimulates demand and lessens the gap between the rich and the workers.

[alwaysinasnit]

11. I agree, but the people who own this country are generally very short-sighted. I think that they

see no reason to give the masses any benefit that might come out of their revenue stream.

[guillaumeb]

12. No doubt. And they profit from keeping the mass of workers in debt

and worried about the future.

[alwaysinasnit]

14. Modern-day feudalism.

[jimfields33]

13. They sorta do already by that monthly fee for the honor of having an account

Pay 5 dollars a month. Gain 29 cents for the year in interest.

[kimbutgar]

4. Who would take a loan with all the uncertainty now?

This only benefits mf45’s massive debts.

[guillaumeb]

6. Banks can borrow at 0%,

and make more than that buying bonds. Plus they will make even more on the spread between what they borrow at, and what they charge others.

[thecrow]

22. Any bank that borrows at zero percent

should have to make loans of no more than 2%

[guillaumeb]

23. Restrain the vulture capitalists? eom

[D_Master81]

8. I've used Ally for some of savings

Since PNC was only paying 5 hundredths of a percent interest we put a decent amount in Ally. Over the past year the rate they pay has gone from 2.25% to 1.5% before this.

[guillaumeb]

10. Contrast that 1.5% on earnings with 29% for borrowers.

And we see one reason that the banks are so massively profitable.

[doc03]

16. I was getting about that from Vanguard MM

now it will go to zero again. I bought a new car yesterday
no use leaving money in savings when you get nothing.

[Hoyt]

15. Bet not since default rate will likely increase with increased unemployment.

[guillaumeb]

18. Agreed.

And the lower credit scores that will follow that default will make borrowing more expensive for those affected.

[doc03]

17. The deficit is going to explode it will

make the Obama deficit the Republicans ranted about look like pocket change.

[guillaumeb]

19. And economic activity is guaranteed to drop.

The majority of the GDP is consumer spending. This rate cut will do nothing for consumers.

[Midnight Writer]

20. To me, it just means that much more gravy for us common folk when it starts to trickle down.

Shouldn't be too much longer.

I've been watching for it since 1981.

[guillaumeb]

21. Well said.

Soon the trickle down will be a flood.