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Thread: Fed economist: 'No evidence that QE works' as central bank starts unwinding program

  1. #31
    Quote Originally Posted by acptulsa View Post
    You'd think you people would have learned by now that the Zipsters seldom lie about themselves...
    From what I remember Zippy might've mildly stated we don't need more QE, but he loudly claimed, over and over that there are no after effects from QE.



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  3. #32
    Quote Originally Posted by acptulsa View Post
    Who says Quantitative Easing doesn't work? Obviously it doesn't work as advertised. We all knew that before Zippy started agreeing with us, and made us doubt ourselves. But it clearly does achieve its intended purpose. If it didn't, we'd still make a living wage and have hope to avoid starvation in our retirement. The rich can't get richer that way.
    I like what you are saying. Zippy's finally found a winning strategy for RPF. Everybody disagrees with him all the time, so all he has to do now is state the truth and everybody will be running away from it. Maybe he will finally get the promotion he was looking for.



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  5. #33
    Quote Originally Posted by TheTexan View Post
    I'm sure stocks going up has nothing to do with excess reserves going down, right zippy?

    https://fred.stlouisfed.org/series/EXCSRESNS
    I really curious to know what Zippy thinks Obama did to create that tremendous recovery. Was it the tax hikes? Obamacare? Constant threats to steal from the wealthy? Military strikes? Magic?

  6. #34
    Quote Originally Posted by Madison320 View Post
    From what I remember Zippy might've mildly stated we don't need more QE, but he loudly claimed, over and over that there are no after effects from QE.
    So maybe it would be wise to stop attacking him for what he didn't do, and look at what he is doing:

    Quote Originally Posted by timosman View Post
    I like what you are saying. Zippy's finally found a winning strategy for RPF. Everybody disagrees with him all the time, so all he has to do now is state the truth and everybody will be running away from it. Maybe he will finally get the promotion he was looking for.
    The Zippy Account's message is clear--having your real wages and your savings cut by dollar devaluation doesn't do you a bit of harm, and you didn't need that wealth and didn't need to retire anyway, so move into a microhouse and work until you drop like a good little drone. They'll tell the truth just as often as they have to if they can convince us of that.
    Last edited by acptulsa; 09-21-2017 at 10:04 AM.
    Quote Originally Posted by Swordsmyth View Post
    We believe our lying eyes...

  7. #35
    Quote Originally Posted by acptulsa View Post
    So maybe it would be wise to stop attacking him for what he didn't do, and look at what he is doing:



    The Zippy Account's message is clear--having your real wages and your savings cut by dollar devaluation doesn't do you a bit of harm, and you didn't need that wealth and didn't need to retire anyway, so move into a microhouse and work until you drop like a good little drone. They'll tell the truth just as often as they have to if they can convince us of that.
    I think I've had more arguments with Zippy about the fact that QE devalues the dollar than anyone in this forum.

    One time I kept asking him (over and over, you know Zippy!) what was the main reason prices have gone up so much over the last 50 years. My point was that the increase was far and away due to the increase in the monetary base, which is QE, which is printing money. He claimed that the monetary base has little effect on increasing prices and finally claimed it was the increase in population that was the main factor!

  8. #36
    Quote Originally Posted by Madison320 View Post
    I think I've had more arguments with Zippy about the fact that QE devalues the dollar than anyone in this forum.

    One time I kept asking him (over and over, you know Zippy!) what was the main reason prices have gone up so much over the last 50 years. My point was that the increase was far and away due to the increase in the monetary base, which is QE, which is printing money. He claimed that the monetary base has little effect on increasing prices and finally claimed it was the increase in population that was the main factor!
    Congratulations on making that much progress. He used to say that no matter how much more meat and rent and school supplies and rice and beans cost, prices are down because televisions cost less than they used to.
    Last edited by acptulsa; 09-21-2017 at 10:27 AM.
    Quote Originally Posted by Swordsmyth View Post
    We believe our lying eyes...

  9. #37
    Quote Originally Posted by acptulsa View Post
    televisions cost less than they used to.
    also also last significantly longer (see planned obsolescence).

  10. #38
    Quote Originally Posted by acptulsa View Post
    You'd think you people would have learned by now that the Zipsters seldom lie about themselves...
    Of course, I say that. And they try. But they do have to try to hide the fact that they're British. And the NFL is a tough subject for cricket fans.

    So, we get some comic relief. Like when they talk about the Broncos and Seahawks being division rivals a decade after Seattle moved to the NFC. And no guardedly optimistic talk about the insanely talented, but often injured Jamaal Charles. And a terse 'I'm a Broncos fan' when asked about the Chiefs, even though no Broncos or Chiefs fan worth their salt fails to keep tabs on the other side of that rivalry. And the fact that the only thing he can't spell correctly is...

    Quote Originally Posted by Zippyjuan View Post
    Trevor Simmian
    Quote Originally Posted by Swordsmyth View Post
    We believe our lying eyes...

  11. #39
    Quote Originally Posted by Madison320 View Post
    I think I've had more arguments with Zippy about the fact that QE devalues the dollar than anyone in this forum.

    One time I kept asking him (over and over, you know Zippy!) what was the main reason prices have gone up so much over the last 50 years. My point was that the increase was far and away due to the increase in the monetary base, which is QE, which is printing money. He claimed that the monetary base has little effect on increasing prices and finally claimed it was the increase in population that was the main factor!
    You have problems with terms. QE is the Central Bank buying and selling securities. QE occurred between 2008 and 2014.

    The Monetary Base is not considered the same as the money supply. M2 is money supply. The Monetary Base is not QE either. What has the monetary base done over the last 50 years?



    What about M2?



    Has the rate of inflation followed either of those graphs?



    If increasing the monetary base directly leads to a comparable increase in prices, why didn't prices increase nearly five fold when the monetary base increased five fold beginning in 2008?
    Last edited by Zippyjuan; 09-21-2017 at 12:24 PM.

  12. #40
    Quote Originally Posted by Zippyjuan View Post
    You have problems with terms.
    You can split hairs until you're blue in the face. God knows the Fed is not lacking in Tools for Obfuscation. But as long as we're swimming in liquidity, our real world wages and the actual value of our savings is going down.

    And we are definitely swimming in liquidity.

    https://www.bloomberg.com/news/artic...well-in-charts

    If it were possible to hide the flood, Bloomberg would be leading the effort.
    Last edited by acptulsa; 09-21-2017 at 12:42 PM.
    Quote Originally Posted by Swordsmyth View Post
    We believe our lying eyes...



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  14. #41
    Quote Originally Posted by Zippyjuan View Post
    You have problems with terms. QE is the Central Bank buying and selling securities. QE occurred between 2008 and 2014.
    Printing money. QE. Increases in the monetary base. It's all the same thing. What difference does it make? What do you call increases in the monetary base before 2008?

    Quote Originally Posted by Zippyjuan View Post
    The Monetary Base is not considered the same as the money supply. M2 is money supply. The Monetary Base is not QE either. What has the monetary base done over the last 50 years?
    Dang. This is at least the 5th time you've been wrong about this.

    The monetary base is what drives the money supply. And as I've told you at least 5 times previously, even the Fed defines the monetary base as one type of money supply. They call it high powered money, because small changes in the base get multiplied. The monetary base is the amount of money that's been printed. In 1971 the base was about 70 billion. In 2008 before massive QE it was almost 900 billion. That means the base is 12 times bigger in 2008 than it was in 1970 and that's why prices also went up by around that much. It wasn't an increase in population as you suggested.


    Quote Originally Posted by Zippyjuan View Post
    If increasing the monetary base directly leads to a comparable increase in prices, why didn't prices increase nearly five fold when the monetary base increased five fold beginning in 2008?
    Because it doesn't happen instantly. Most of QE is sitting in reserves. Money velocity is slow. These are temporary factors that will eventually reverse and then you will see an increase in prices. Unless the Fed decides to remove the QE and send us into the mother of all depressions. Which I doubt they will do, at least not until price inflation has gotten pretty serious.


    So I ask you yet again. What policies did Obama implement that caused the recovery?

  15. #42
    @Zippyjuan I wonder if you can shed clarity on this question... why are the banks choosing to leave their money in reserves?

    They surely aren't keeping their money there for the 1.25 IOER.

    Couldn't they make at least 10x more interest on that money, given 10x fractional reserve multiplier, by buying treasuries?
    It's all about taking action and not being lazy. So you do the work, whether it's fitness or whatever. It's about getting up, motivating yourself and just doing it.
    - Kim Kardashian

    Donald Trump / Crenshaw 2024!!!!

    My pronouns are he/him/his

  16. #43
    Quote Originally Posted by Zippyjuan View Post
    You have problems with terms. QE is the Central Bank buying and selling securities. QE occurred between 2008 and 2014.

    The Monetary Base is not considered the same as the money supply. M2 is money supply. The Monetary Base is not QE either. What has the monetary base done over the last 50 years?



    What about M2?



    Has the rate of inflation followed either of those graphs?



    If increasing the monetary base directly leads to a comparable increase in prices, why didn't prices increase nearly five fold when the monetary base increased five fold beginning in 2008?
    Productivity has skyrocketed in the last 50 years and more. Prices should always be decreasing, drastically, but inflation has eaten up those gains the consumer would've seen. Worker should also be making more as their productivity has gone way up.
    Pfizer Macht Frei!

    Openly Straight Man, Danke, Awarded Top Rated Influencer. Community Standards Enforcer.


    Quiz: Test Your "Income" Tax IQ!

    Short Income Tax Video

    The Income Tax Is An Excise, And Excise Taxes Are Privilege Taxes

    The Federalist Papers, No. 15:

    Except as to the rule of appointment, the United States have an indefinite discretion to make requisitions for men and money; but they have no authority to raise either by regulations extending to the individual citizens of America.

  17. #44
    Quote Originally Posted by Danke View Post
    Productivity has skyrocketed in the last 50 years and more. Prices should always be decreasing, drastically, but inflation has eaten up those gains the consumer would've seen. Worker should also be making more as their productivity has gone way up.
    Good point.

    It really irritates me that many people in this forum still deny that printing money devalues the currency. And it does it in proportion to the amount printed. People argue that printing money causes "imbalances" but it doesn't necessarily devalue the currency. If that were true you could always fix any imbalances by printing. The fact is that printing money always devalues the currency, but it doesn't always show up right away in prices.

  18. #45
    Quote Originally Posted by Danke View Post
    Productivity has skyrocketed in the last 50 years and more. Prices should always be decreasing, drastically, but inflation has eaten up those gains the consumer would've seen. Worker should also be making more as their productivity has gone way up.
    That is why I am working for myself now . Easier to control the ebb and flow of evil .

  19. #46
    Quote Originally Posted by Madison320 View Post
    Good point.

    It really irritates me that many people in this forum still deny that printing money devalues the currency. And it does it in proportion to the amount printed. People argue that printing money causes "imbalances" but it doesn't necessarily devalue the currency. If that were true you could always fix any imbalances by printing. The fact is that printing money always devalues the currency, but it doesn't always show up right away in prices.
    That's really not true though. The currency is only devalued if money enters the system to bid up goods.

    Here is a very good explanation from the most well respected gold standard economist. This guy has been successful in the real world too. He has been closely tied with the most successful currency and commodities trading firm. He offers an explanation that should agreeable to your views.



    So, paradoxically, the drive to deleverage banks and to shrink their balance sheets, in the name of making banks safer, destroys money balances. This, in turn, dents company liquidity and asset prices. It also reduces spending relative to where it would have been without higher capital-asset ratios.


    The United States has employed a loose state money/tight bank money monetary policy mix. Yes, for all the talk of quantitative easing and the Fed’s loose monetary policy, the inconvenient truth is that the overall money supply in the U.S., broadly measured, is still, on balance, somewhat tight to neutral — thanks in large part to ill-timed bank capital hikes.
    https://www.forbes.com/sites/steveha.../#37a0e20b4953
    Last edited by Krugminator2; 09-21-2017 at 05:14 PM.

  20. #47
    Quote Originally Posted by TheTexan View Post
    @Zippyjuan I wonder if you can shed clarity on this question... why are the banks choosing to leave their money in reserves?

    They surely aren't keeping their money there for the 1.25 IOER.

    Couldn't they make at least 10x more interest on that money, given 10x fractional reserve multiplier, by buying treasuries?
    Actually they don't get 1.25% interest on reserves- it is only one quarter of one percent.

  21. #48
    Quote Originally Posted by Danke View Post
    Productivity has skyrocketed in the last 50 years and more. Prices should always be decreasing, drastically, but inflation has eaten up those gains the consumer would've seen. Worker should also be making more as their productivity has gone way up.
    Examples of any monetary or banking system where prices always went down? If productivity goes up, the benefits can go to one of three things- one could be lower prices. One could be higher wages for workers. One could be higher profits retained by the owners of the business. If the owners don't want more money for themselves and the employees don't want (or get) any wage ore benefit increases, then the prices could head down.

    Most of the benefits have been going to the owners of the capital- not to workers or prices. The pie has been growing but your slice keeps getting smaller instead of bigger.

    https://www.nytimes.com/2014/04/05/b...e.html?mcubz=0

    Corporate Profits Grow and Wages Slide

    CORPORATE profits are at their highest level in at least 85 years. Employee compensation is at the lowest level in 65 years.

    The Commerce Department last week estimated that corporations earned $2.1 trillion during 2013, and paid $419 billion in corporate taxes. The after-tax profit of $1.7 trillion amounted to 10 percent of gross domestic product during the year, the first full year it has been that high. In 2012, it was 9.7 percent, itself a record.

    Until 2010, the highest level of after-tax profits ever recorded was 9.1 percent, in 1929, the first year that the government began calculating the number.

    Before taxes, corporate profits accounted for 12.5 percent of the total economy, tying the previous record that was set in 1942, when World War II pushed up profits for many companies. But in 1942, most of those profits were taxed away. The effective corporate tax rate was nearly 55 percent, in sharp contrast to last year’s figure of under 20 percent.

    The trend of higher profits and lower effective taxes has been gaining strength for years, but really picked up after the Great Recession temporarily depressed profits in 2009. The effective rate has been below 20 percent in three of the last five years. Before 2009, the rate had not been that low since 1931.

    The Commerce Department also said total wages and salaries last year amounted to $7.1 trillion, or 42.5 percent of the entire economy. That was down from 42.6 percent in 2012 and was lower than in any year previously measured.

    Including the cost of employer-paid benefits, like health insurance and pensions, as well as the employer’s share of Social Security and Medicare contributions, the total cost of compensation was $8.9 trillion, or 52.7 percent of G.D.P., down from 53 percent in 2012 and the lowest level since 1948.

    https://www.cbsnews.com/news/u-s-cor...ord-low-taxes/

    U.S. corporations earn record high profits, pay record low taxes


    Money, get away
    Get a good job with more pay and you're okay
    Money, it's a gas
    Grab that cash with both hands and make a stash
    New car, caviar, four star daydream
    Think I'll buy me a football team

    [Verse 2: David Gilmour]
    Money, get back
    I'm all right Jack keep your hands off of my stack
    Money, it's a hit
    Don't give me that do goody good bull$#@!
    I'm in the high-fidelity first class traveling set
    And I think I need a Lear jet

    Money, it's a crime
    Share it fairly but don't take a slice of my pie
    Money, so they say
    Is the root of all evil today
    But if you ask for a rise
    It's no surprise that they're giving none away
    Pink Floyd- Money.
    Last edited by Zippyjuan; 09-21-2017 at 06:11 PM.



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  23. #49
    Quote Originally Posted by Madison320 View Post
    Printing money. QE. Increases in the monetary base. It's all the same thing. What difference does it make? What do you call increases in the monetary base before 2008?



    Dang. This is at least the 5th time you've been wrong about this.

    The monetary base is what drives the money supply. And as I've told you at least 5 times previously, even the Fed defines the monetary base as one type of money supply. They call it high powered money, because small changes in the base get multiplied. The monetary base is the amount of money that's been printed. In 1971 the base was about 70 billion. In 2008 before massive QE it was almost 900 billion. That means the base is 12 times bigger in 2008 than it was in 1970 and that's why prices also went up by around that much. It wasn't an increase in population as you suggested.




    Because it doesn't happen instantly. Most of QE is sitting in reserves. Money velocity is slow. These are temporary factors that will eventually reverse and then you will see an increase in prices. Unless the Fed decides to remove the QE and send us into the mother of all depressions. Which I doubt they will do, at least not until price inflation has gotten pretty serious.


    So I ask you yet again. What policies did Obama implement that caused the recovery?
    Obama didn't implement any policies which caused the recovery. Presidents really don't have any power over the economy (beyond psychological).

    As we have discussed dozens of times, why did the monetary base increase in 2008? The base is cash (paper money and coins) plus bank reserves. The cash didn't change much- what went up was bank reserves. Money kept in bank vaults doesn't impact prices. Money has to be spent to impact prices. That is why increasing the monetary base by almost a factor of five didn't lead to prices increasing by a factor of five and why M2 (the most used measure of money supply) didn't increase by a factor of five.
    Last edited by Zippyjuan; 09-21-2017 at 05:47 PM.

  24. #50
    Could Zippy choose a more ridiculous avatar? A surrealist?
    Last edited by timosman; 09-21-2017 at 05:56 PM.

  25. #51
    Quote Originally Posted by Zippyjuan View Post
    Most of the benefits have been going to the owners of the capital- not to workers or prices. The pie has been growing but your slice keeps getting smaller instead of bigger.
    Gee, I wonder why that is. Could the fact that the currency no longer fluctuates both up and down, but only becomes more worthless with time have anything to do with it?

    Where's that graph the Zippy account always used to post that showed the value of the dollar fluctuating both up and down before 1913, and only ever fluctuating down and never up since?
    Quote Originally Posted by Swordsmyth View Post
    We believe our lying eyes...

  26. #52
    Quote Originally Posted by Zippyjuan View Post
    Actually they don't get 1.25% interest on reserves- it is only one quarter of one percent.
    1.25 currently.

    https://fred.stlouisfed.org/series/IOER

    Either way, that doesn't answer my original question. Why would the banks keep their money in reserves, when they could earn at least 10x as much interest with treasuries (given 10x fractional reserve multiplier) ?
    Last edited by TheTexan; 09-21-2017 at 06:51 PM.
    It's all about taking action and not being lazy. So you do the work, whether it's fitness or whatever. It's about getting up, motivating yourself and just doing it.
    - Kim Kardashian

    Donald Trump / Crenshaw 2024!!!!

    My pronouns are he/him/his

  27. #53
    Quote Originally Posted by Krugminator2 View Post
    That's really not true though. The currency is only devalued if money enters the system to bid up goods.
    That's true but eventually the money has to enter the system unless the Fed unwinds it before it gets out, which has never happened to any degree in history.

    Money is no good if it's just sitting in your vault forever. The banks didn't trade assets for money that they are not allowed to spend. Would you sell your car if the condition was that you could never touch the cash you got for it?

  28. #54
    Quote Originally Posted by Zippyjuan View Post
    Obama didn't implement any policies which caused the recovery. Presidents really don't have any power over the economy (beyond psychological).
    Let's see if you stick to your theory when the economy implodes under Trump.


    Quote Originally Posted by Zippyjuan View Post
    As we have discussed dozens of times, why did the monetary base increase in 2008? The base is cash (paper money and coins) plus bank reserves. The cash didn't change much- what went up was bank reserves. Money kept in bank vaults doesn't impact prices. Money has to be spent to impact prices. That is why increasing the monetary base by almost a factor of five didn't lead to prices increasing by a factor of five and why M2 (the most used measure of money supply) didn't increase by a factor of five.
    And as I've replied, that's an argument in favor of my position, not yours. If the QE had all entered the system and prices had not gone up then you'd probably be right. But most of it is sitting in reserves, and it can't sit there forever. Money has to be spent eventually or else it's worthless.

  29. #55
    Quote Originally Posted by TheTexan View Post
    1.25 currently.

    https://fred.stlouisfed.org/series/IOER

    Either way, that doesn't answer my original question. Why would the banks keep their money in reserves, when they could earn at least 10x as much interest with treasuries (given 10x fractional reserve multiplier) ?
    I'm not sure where you're getting the 10x number. That seems almost impossible. Also remember there's a huge amount of risk when you loan money. The banks are getting 1.25% risk free. That still seems a little low however.

  30. #56
    Quote Originally Posted by Madison320 View Post
    I'm not sure where you're getting the 10x number. That seems almost impossible. Also remember there's a huge amount of risk when you loan money. The banks are getting 1.25% risk free. That still seems a little low however.
    The money in reserves is part of the monetary base. The bank can lend 10x as much as they have in reserves, if they wanted. 2 year treasuries go for about 1.4. So each dollar in reserve could earn 14% after it gets lent out 10x. (Zippy please do correct if this is wrong)


    I'm just wondering why they don't. (Besides the fact that taking money out of reserves leads directly to hyperinflation https://www.minneapolisfed.org/resea...xcess-reserves )

    Even without the fractional reserve multiplier, any bank could still easily beat 1.25 with just treasuries. Only reason not to do that, is if they think interest rate will be going up significantly in the near (< 2 year) future.
    Last edited by TheTexan; 09-21-2017 at 07:55 PM.
    It's all about taking action and not being lazy. So you do the work, whether it's fitness or whatever. It's about getting up, motivating yourself and just doing it.
    - Kim Kardashian

    Donald Trump / Crenshaw 2024!!!!

    My pronouns are he/him/his



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  32. #57
    Quote Originally Posted by acptulsa View Post
    Of course, I say that. And they try. But they do have to try to hide the fact that they're British. And the NFL is a tough subject for cricket fans.

    So, we get some comic relief. Like when they talk about the Broncos and Seahawks being division rivals a decade after Seattle moved to the NFC. And no guardedly optimistic talk about the insanely talented, but often injured Jamaal Charles. And a terse 'I'm a Broncos fan' when asked about the Chiefs, even though no Broncos or Chiefs fan worth their salt fails to keep tabs on the other side of that rivalry. And the fact that the only thing he can't spell correctly is...
    Zip & Co. most recent misspellings are pursuit (persuit) and truly (truely). See directly below.
    http://www.ronpaulforums.com/showthr...he-correct-IDs
    http://www.ronpaulforums.com/showthr...31#post6522431




    Quote Originally Posted by timosman View Post
    Could Zippy choose a more ridiculous avatar? A surrealist?
    That avatar is disturbing.
    Quote Originally Posted by TheCount View Post
    ...I believe that when the government is capable of doing a thing, it will.
    Quote Originally Posted by Influenza View Post
    which one of yall fuckers wrote the "ron paul" racist news letters
    Quote Originally Posted by Dforkus View Post
    Zippy's posts are a great contribution.




    Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members

  33. #58
    Quote Originally Posted by NorthCarolinaLiberty View Post





    That avatar is disturbing.

    Ya, I thought he should go with the Che avatar.
    Pfizer Macht Frei!

    Openly Straight Man, Danke, Awarded Top Rated Influencer. Community Standards Enforcer.


    Quiz: Test Your "Income" Tax IQ!

    Short Income Tax Video

    The Income Tax Is An Excise, And Excise Taxes Are Privilege Taxes

    The Federalist Papers, No. 15:

    Except as to the rule of appointment, the United States have an indefinite discretion to make requisitions for men and money; but they have no authority to raise either by regulations extending to the individual citizens of America.

  34. #59
    Quote Originally Posted by NorthCarolinaLiberty View Post
    That avatar is disturbing.
    Zippy is so sophisticated even his avatar is misunderstood.


  35. #60
    Quote Originally Posted by TheTexan View Post
    The money in reserves is part of the monetary base. The bank can lend 10x as much as they have in reserves, if they wanted. 2 year treasuries go for about 1.4. So each dollar in reserve could earn 14% after it gets lent out 10x. (Zippy please do correct if this is wrong)


    I'm just wondering why they don't. (Besides the fact that taking money out of reserves leads directly to hyperinflation https://www.minneapolisfed.org/resea...xcess-reserves )

    Even without the fractional reserve multiplier, any bank could still easily beat 1.25 with just treasuries. Only reason not to do that, is if they think interest rate will be going up significantly in the near (< 2 year) future.
    I don't think the fractional reserve thing means one bank can lend 10x. If a bank has $100 in reserves it can loan that out to someone for 10% for example. The lender might take the $100 and deposit it in another bank but that doesn't do anything for the original bank. So that bank could get 10% but there's risk that they might not get paid back. So I have know idea what the actual return is.

    The part about treasuries is a good point, maybe it's because of the risk? I just looked it up and the 2 year t bill is 1.45%. I'm not sure how much risk is in a 2 year t bill. Probably not much. Remember when you buy treasuries you're in it for the duration whereas I'm assuming the banks can take the money out of the Fed's reserve bank at any time. But 1.25% seems really low. Maybe there's some quid pro quo going on. Maybe the banks got bailed out with the agreement they would keep their money at low rates in reserve?

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