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Sunday, February 26, 2012

Federal Reserve, Banks, Interest rates and credit cards


This is the stuff that drives me crazy..

While the Federal Reserve overnight bank lending rate remains at an all time low since 2008, 0.0 to 0.25% interest, and the prime rate also remains consistently low, currently around 3.25%, the average retailer expects to receive an average interest rate of nearly 17% on worthless fiat paper currency that doesn't even really exist (has ZERO intrinsic value as it's ONLY PAPER).

I have one credit card and under normal circumstances pay the entire balance every month. My current interest rate is 7.99%

You can check 2010 credit card interest rates here.. What a SCAM! CreditCards.com 2010 retail credit card chart



Prime rate, fed funds, COFI
By Bankrate.com

The prime rate, as reported by the Wall Street Journal's bank survey, is among the most widely used benchmark in setting home equity lines of credit and credit card rates. It is in turn based on the fed funds rate, which is set by the Federal Reserve. The COFI (11th District cost of funds index) is a widely used benchmark for adjustable-rate mortgages.

Updated 2/22/2012
Prime rate, fed funds, COFI

This week Month ago Year ago
WSJ Prime Rate 3.25 3.25 3.25
Federal Discount Rate 0.75 0.75 0.75
Fed Funds Rate (Current target rate 0-0.25) 0.25 0.25 0.25
11th District Cost of Funds 1.221 1.201 1.508

Ratings methodology

What's included? The fed funds rate is the primary tool that the Federal Open Market Committee uses to influence [manipulate] interest rates and the economy. Changes in the fed funds rate have far-reaching effects by influencing the borrowing cost of banks in the overnight lending market, and subsequently the returns offered on bank deposit products such as certificates of deposit, savings accounts, and money market accounts. Changes in the fed funds rate and the discount rate also dictate changes in the Wall Street Journal Prime Rate, which is of interest to borrowers. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Many small business loans are also indexed to the Prime rate. The 11th District Cost of Funds is often used as an index for adjustable-rate mortgages.


The following information is from FOX Business

Current averages:

Average consumer credit card rate, overall market: 16.88%
Average consumer non-rewards credit card rate: 14.91%
Average consumer rewards credit card rate: 17.73%
Average student credit card rate: 17.06%
Average business non-rewards credit card rate: 14.74%
Average business rewards credit card rate: 15.69%

The US bank prime rate remained at 3.25%. This rate has now been unchanged for over three years; based on Federal Reserve data going back to the late 1940s, this now marks the second-longest stretch with no change in the bank prime rate. From September of 1960 through November of 1965, the bank prime rate remained unchanged at 4.5%, a stretch of over five years. Based on statements the current Fed has made about keeping interest rates low through the next couple of years, the current streak may yet grow to challenge that record.

Here is the full article on FOX Business: Credit Card Rates: The Price for Bad Credit is Rising


It is this sort of situation that so clearly demonstrates, to me, the income inequality and built in bias' of the entire debt based ponzi economy we are currently stuck with.

While interest rates are at record lows for inordinate periods of time, consumer borrowing rates continue to rise! I don't understand why ANYONE would wish to borrow FAKE money for the privilege of paying 18% interest on it. Makes NO sense to me what-so-ever..

While at the same time banks are able to "borrow" all the imaginary worthless fiat currency they want from the Federal Reserve system at essentially a ZERO percent interest rate only to turn around and buy taxpayer backed government bonds paying 2.5% interest. An entirely risk free transaction with a current return of about 2.25% (Try getting that on YOUR savings or a bank CD!)

So banks and corporation continue to amass huge record profits at the expense of every American citizen.

Not only that but banks also use the free fiat they receive from the FED to gamble in markets driving up the costs of commodities, energy, oil, gas and food. Essential items for all Americans whose costs are manipulated with free Federal Reserve fiat currency by Primary Dealers [like MF Global], and Too Big To Fail banks.

Suspiciously and conveniently these painful costs to to all American citizens are not reflected at all in government CPI (inflation) data..

Here is more valuable information of how this whole scam works..


Ellen Brown, June 4, 2010

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