BANKS THREATEN NEGATIVE INTEREST RATES OVER FED ENDING QE INFINITY. HOW MUCH MORE CAN WE TAKE FROM THESE GREEDY BASTARDS?

Does anyone over the age of thirty remember the days when banks weren't soul sucking greed machines that are constantly shitting all over this country? There was a time when banks, especially local ones, kept the economy humming with low interest loans and a reasonable return on savings. Those days are long gone as many of the smaller banks were gobbled up by larger banks, especially after the Savings and Loan scandal caused by Carter, then Reagan and finished off by Bush 1. Why have we had so many bad presidents since JFK? I wonder, could that bullet that shore off Kennedy's head have anything to do with it? NAHHHHH, the media tells us.

The whole savings and loan scandal was caused by deregulation of the banks which led to massive fraud, a housing bust and insolvency for many banks. Oddly enough, this is the same thing that happened in 2007. We learn nothing in this country. I swear most people have the attention span of a drunken gnat. Deregulation leads to very bad things every time. I dare anyone to come up with a deregulation bill that actually worked in the consumers favor. Good luck.

So now comes word that banks are actually telling the government they may have to go to negative interest rates (something future FED Chairman Janet Yellin has proposed in the past) if QE infinity stops. How is that not blackmail? They are essentially saying, "If you don't keep giving us free money, we'll tank the system." How is that any different from a terrorist plot or a Tea Party filibuster? If we don't get our way, we'll hold our breaths until our faces turn blue. Real mature attitude there guys.

What this means is that, if interest rates rise due to the FED turning off the money spigot, banks will start charging for deposits, meaning a negative interest rate. Sp instead of the measly .1% they are paying now, they will instead CHARGE you money for the experience of having a bank account. For example, if you had $100,000 in your account, by the end of the year you might only have $95,000. How many people do you think will put up with that? This would put many small businesses out of business as their savings would dwindle rather than grow, except through more risky stock trading and the like. This would be a disaster as bank runs would be common, most people would take almost all of their money out of the bank and the entire financial sector may collapse as a result.

Banks have responded with their usual brand of BS. This is from Prison Planet:

Executives at two of the top five US banks said a cut in the 0.25 per cent rate of interest on the $2.4tn in reserves they hold at the Fed would lead them to pass on the cost to depositors.

Banks say they may have to charge because taking in deposits is not free: they have to pay premiums of a few basis points to a US government insurance programme.

“Right now you can at least break even from a revenue perspective,” said one executive, adding that a rate cut by the Fed “would turn it into negative revenue – banks would be disincentivised to take deposits and potentially charge for them”.

Other bankers said that a move to negative rates would not only trim margins but could backfire for banks and the system as a whole, as it would incentivise treasury managers to find higher-yielding, riskier assets.

“It’s not as if we are suddenly going to start lending to [small and medium-sized enterprises],” said one. “There really isn’t the level of demand, so the danger is that banks are pushed into riskier assets to find yield.”

None of that is true. Banks are still lending at the same rate as before, just to higher earning lenders which is shutting middle class America out of any gains made so far these past five years. And banks themselves are the ones engaging in the riskiest behavior by betting billions on the derivative market which led to problems within JP Morgan when they lost a fortune doing just that recently. We still don't know the exact amount except that it was in the billions.

If they go through with this, which would be pure suicide by the way, no banks will have any liquidity left as people storm the banks to get their money out. It would make the bank run in It's A Wonderful Life look a girl scout jamboree. Banks would have no choice but to dip into the own savings as most investors flee. 

Why is it every bad idea being floated through out the EU is also being echoed here. Talks of buy ins, which would pay investors before depositors, already quietly passed here when banks illegally foisted their derivative losses onto the backs of the FDIC. As the derivative market liability is somewhere in the $70 trillion dollar range, for just American banks, this would swamp the system and no one gets their money back then. How pissed do you think people will get if they find out that rich people got some of their money back while the rest of us got screwed during the next bank crisis? 

All of this is further proof that the one thing our founding Fathers feared most, an out of control banking system, is here. Banks have been screwing us blue and will continue to do so until we do something about it. The Tea Party tried until the lunatic wing took that over. OWS tried until the cops broke up the dope smoking, drum circles these neo-hippies thought would change the world. Not surprisingly, that didn't work. So the right failed. The left failed. We've failed. And sooner or later, most likely the former, this country is going to fail. As long as we continue to take it on the chin and do nothing, we are all asking for the end of the world.