See, I Told You So (QE)

Money Printing

Jesus, how long did this take?


Chief among the data points to be noted is that net interest expense, which is the money paid to depositors at banks, continues to fall.  While all banks earned about $118 billion in interest income last quarter, they paid just $13 billion to depositors, a graphic example of the “financial repression” used by the Fed to subsidize the US banking industry.  Via QE, the Fed is subsidizing all banks to the tune of over $100 billion per quarter in artificially depressed interest cost and income to depositors of all stripes.

Yeah and that’s coming out of someone’s hide – yours.

That’s $400 billion a year, or roughly $1,200 per person in the United States a year.

For every person.

Man, woman, child, rich, poor, destitute.

That’s your electric bill in many parts of the country, and your car insurance (or more) in most.

The real galling part of this “disclosure” and that Chris is talking about it now is that most were not talking about it at all when this program began.  I’m one of the few who has been.

The reason it is so obscene and should lead you to string up everyone in the economic and media businesses that have not been hamming on this is that it is literal first-semester accounting.

As I’ve repeatedly noted everything is a balance sheet.

When you lower the interest payment that someone has to fork up the lender gets less by the exact same amount.  That lender is your insurance company, your grandmother on fixed income, your pension fund,Social Security and Medicare trust funds and more.  It is the cash return on short-term paper in corporations, income they would otherwise use to hire people.

In short this “policy” has done nothing but try to time-shift demand into today from tomorrow while at the same time destroying interest income cash flow.  Yet it is precisely capital formation, from which lending and investment comes, that make possible economic progress.  You must accumulate capital to fund new ideas, to try new things, to build new businesses.  If you destroy the return on that capital you ultimately destroy the incentive to accumulate it and the economy ultimately tanks as a result.

We are well past the time when Americans of all stripes should have refused to continue to consent to this crap.

When will you draw the line?

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