The toxic effects of the Fed’s relentless interest rate repression are many, but among the worst has been the absolute savaging of bank depositors. Interest rates on 12-month CDs (under $100,000) dropped below the inflation rate in October 2009 and have been pinned there ever since. There is no other word for this than “expropriation” — an unconstitutional taking of property from tens of millions of households that needed to keep their funds liquid and didn’t wish to roll the dice in the junk bond market or stocks. Worse still, the resulting vast transfer of income from depositors to banks has resulted in an egregious, artificial ballooning of bank profits and stock prices. For instance, the combined market cap of the top six US banking institution — JP Morgan, Bank of America, Citigroup, Wells Fargo, Morgan Stanley and Goldman Sachs — has risen from $200 billion at the bottom of the financial crisis during the winter of 2008-2009, where it reflected their true value absent government bailouts, to $1.5 trillion recently. That 7.5X gain, which was 100% orchestrated by the Fed, is an unspeakable gift to the wealthy who own most of the stocks and especially to top bank executives who have cashed-in on vastly appreciated options.
If You Find EarthNewspaper.com Informative, Please Make A Contribution
Donate today and support the work I do seven days a week. Each day I publish more than a dozen news articles and videos, from honest, independent and reliable sources, on a completely ad-free website. There are four ways you may donate: credit card, check, bank wire, or SubscribeStar. I, Mark R. Elsis, thank you in advance for your gracious generosity, so that EarthNewspaper.com All The Honest News Fit To Publish may keep growing quickly.