Re: Feds invent new scam to transfer tax payer's money to banks

"Money Man" <Money@[EMAIL PROTECTED]
> wrote in message  wrote:
>> Federal Reserve policymakers will discuss paying interest on
>> bank reserves in a closed door meeting on Wednesday.
> Who would be paying - or where would the interest payments come from?

The money would come from some combination of money creation (by the Fed) 
and government spending (either taxes or borrowing, the latter being 
postponed taxes).

The money would go to some combination of bank profits (to shareholders), 
higher interest to depositors, and lower interest rates for borrowers.

I wonder: would this mechanism allow us to get rid of the reserve 
requirement? Instead of requiring banks to keep reserves equal to e.g. 10%

of loans, we could simply adjust the interest rate paid on reserves to 
achieve the same result.  This might also get investment banks into the 
system voluntarily, making them a little safer and avoiding 
Bear-Stearns-style bankruptcies.

Dan in Philly