In total as of April 21, banks have sitting in the warm bosom of the Federal Reserve, as excess reserves, $1.474 trillion. Over a three month period, this means the Fed will be paying banks nearly $1 billion, if reserves stay at this level. If banks tried to get equivalent market rates that all other Americans and corporations get, for equivalent risk, the banks would be getting only $110 million. In other words, with this new "tool" of Bernanke's, he is gifting banks $890 million every three months. Or a total of $3.56 billion each year. It should be added that this $3.56 billion is money the Fed simply prints up, which has the potential to enter the system causing even more price inflation for the rest of us.Maybe Bernanke hasn't heard about Obama's Rich Banker Policy, or maybe he is the policy.
Who do you trust?
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