Reader comment on: What Cheap Money Means for Banks
Submitted by J.Johnson (United States), Aug 11, 2010 09:34
In addition to Gupta's concerns, there is another malign effect of the Fed's low interest policy, namely, the near-zero return to savers on their bank deposits and CD's, the main effect of which has been to drive savers into the stock market where, coincidence of coincidences, they become customers of some of the big banks' prime partners in crime, i.e., the big brokerages and mutual funds, where savers trust their retirement funds to the tender mercies of grossly over-compensated brokers who have delivered a net of 0% return over the past decade. Viewed on a macro scale, this whole process of repeated crises followed by Fed intervention is really a very well managed and coordinated process which has had the effect of transferring enormous amounts of wealth from individual savers and investors to the Wall Street banks, brokers and fund managers who, surprise of surprises, use some of this wealth to purchase Congressional legislation that perpetuates the process.
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