There is no real return from the interest received, but only a nominal return. The real return would account for inflation. After inflation is accounted for on most savings accounts, the real rate of interest is actually negative!
Correct, and they use your deposits as reserves, which allows them to create more debt dollars out of thin air. Roughly about 10 to 1.
Most people believe that the banks loan out their deposits. If that were true, no one would be able to withdraw their money, or write checks against their accounts. Banks cannot loan out a persons money and have it on deposit at the same time.
When they do create more debt dollars, it is the form of loans, and created on the borrower's promise to pay, when they sign a loan agreement. So, in essence, the borrower is creating the money, but the banksters collect the interest. Quite a scam don'tcha know?
Why gets me is that when I transfer my money from PayPal to my bank, it takes three days for me to be able to draw on it! When I used my debit card, the money is deducted immediately. That burns me up!
Yeah, I know that. You are also paying to have them protect and insure your savings, while having the convenience of paying for things by check or card. Hopefully you are deposited in a bank that pays some interest, as well.
Rochelle, I wouldn't count on the protect and insure too much. Do you remember what happened to the savings and loans banks? When things went belly up, it was the consumers/tax payers credit that paid for what the FSLIC didn't have enough to cover.
I sure hope you don't think that the FDIC has enough to cover a financial meltdown.
I think you are right in your implication that many people don't know this. As I have mentioned in some of the comments I have made on your hubs before, it astounds me that so many people are so complacent when it comes to their relationship with banks. However I think a large part of it has to do with what your getting at. Many people don't understand banking and how it is supposed to operate!
I learned a lot watching the hearings on Elizabeth Warrens' Consumer Protection Agency..... I KNEW they were doing this to me, but I didn't factually know, if you know what I mean !!! : putting your deposits in at well-opportune times, so that they will bounce, and you will get the $27.00 over-draft charge.
I also saw how the Democrats were in favor of Warren, and most of the Rethugs attacked her relentlessly. Markey: "The banks have plenty of people sticking up for them....we need someone like you to stick up for the consumer."
She is a tough cookie though..she would NOT let them bag her!
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