Tag Archives: federal reserve

Twilight Zone banking – 1% interest on your savings! Get it while it’s hot.

The US Federal Reserve and its branches oversee these matters, while staying in the background and keeping a low profile.

The US Federal Reserve and its branches oversee these matters, while staying in the background and keeping a low profile.

Hi readers.  Thanks for coming by for a read.

An acquaintance of mine sold off his home and land elsewhere a while back, carried the note.  But the buyer payed off the whole thing unexpectedly far in advance of when it was due.

So my acquaintance suddenly found himself with almost a million bucks rolling around in his wallet wondering what to do with itself.  Checked out money market, certificates of deposit, all the usual suspects figuring to make some interest on it as savings.

And suddenly found himself in Twilight Zone.  Nobody’s paying interest on savings anymore, to speak of.  The best interest he could find was 1%.  Lucky to get that much.

So what the hell does that mean?

Heck, I’m clueless.  My whole life it’s been background culture and policy, tradition, that savings were a good thing to do, prudent, wise, encouraged by government and banks alike.  I think the worst interest I’ve ever known of in my life for savings was US Savings Bonds they hammered us into buying when I was in the military.  Those paid 3% or so, and we all believed we were being raped.

About all I can figure is that banks are making all their money these days off high interest and fees on credit card debts, so much so they don’t need savings of investors to loan out.  Don’t want to be having to share their profits in the form of interest payments with people who just save money in their institutions.

But I also think it must all go back to the smoke and mirrors of the Federal Reserve ghosthood, and who-knows-what-else involving stuff I can’t begin to imagine.

But if they’re only paying 1% interest on a million bucks, seems to me the government ought to be getting off fairly light on interest payments for the deficit loans.  The folks loaning the government to keep going ought to be able to feel rich drawing 2% increase, say, on umpty-ump trillion quadrillion buzzillion dollars.

Somewhere in all this Economics 101 circa 1970 flees to Atlantis and sinks into oblivion.  We’ve entered the Twilight Zone where no man has gone before.

Old Jules