Well, Michael Moore is finding out what it's like to be a mere mortal.

[markw]

Let's say I have a lot of cars, or wheat, or gold, or anything. Several companies tells me, "I will store your stuff for you, send you regular statements about how it's doing, handle any transactions you want, in or out, any time, and assure the security of your stuff." I would expect those companies to charge me a fee for their services, and I would decide which offers the best services for the price.

The difference here is that thew examples you describe just sit there taking up space but banks invest your money while it's in their control and, up until this new development, would make money off your money it by lending it and charging interest or simply investing it (which caused major problems a few years ago).

 

[Adam]

Let's say I have a lot of cars, or wheat, or gold, or anything. Several companies tells me, "I will store your stuff for you, send you regular statements about how it's doing, handle any transactions you want, in or out, any time, and assure the security of your stuff." I would expect those companies to charge me a fee for their services, and I would decide which offers the best services for the price.

Reasonable thinking, but that's not really what banks do (I don't think). Banks don't keep your money safe. I'm not sure they even claim to. Your money is insured by the FDIC, not by the bank.

Banks are low-risk, low-reward investment houses. The reason they pay you for keeping your money with them is because they invest it for profit. You are loaning them your money, and they pay you interest on that loan. When you borrow money from them, you pay a higher interest rate because they both need to pay other investors back and make a profit.

If banks begin to charge money to borrow money, people will likely begin to pull their money out in order to not lose more of it (as has been mentioned). That's bad. Very bad. Unless, of course, those people begin investing their money, which a lot wouldn't. The economy would slow down because there wouldn't be as much movement of funds around to keep it going. At least, that's my uneducated (well, educated over 20 years ago, so mostly forgotten) take on it.

 

[Tomorrow]

The difference here is that thew examples you describe just sit there taking up space but banks invest your money while it's in their control and, up until this new development, would make money off your money it by lending it and charging interest or simply investing it (which caused major problems a few years ago).

I wonder about this move. It does seem like a sneaky way to get people to buy treasury notes...more money for the spendthrift government.

 

[markw]

Either that or invest in the stock market.

 

[Rickster71]

I'm amazed that this post didn't receive any interest...other than Adam's mischief. It portends the failure of the banking system as we know it. And THAT is not a good thing (at least initially). People will be pulling cash out of their accounts like it was weeds in their yards. Or maybe nobody saves money in banks anymore or cares about what happens to their dough. (Intended softball setup for Alex and Adam. )

Personally, I say invest in booze, comic books, guns and ammo.

I guess it may be because we've been slowly moving in that direction, for so many years.
Banks have been cutting savings interest rates and ever so slowly charging for services that were once free, for a long time.
It reminds me of the 'Boiling a Frog' metaphor. (for those unfamiliar) It shows the inability or unwillingness of people to react to significant changes if they occur gradually.

The average person has been nickle & dimmed with hidden fees and new taxes, so much so, I think they've just given up for self preservation purposes.

How else are we going to follow the Master plan for a world government if the USA isn't taken down a few notches?

 

[Tomorrow]

How else are we going to follow the Master plan for a world government if the USA isn't taken down a few notches?

 

[Rickster71]

The hardware store I go to has two German Shepherds and they give me the same look.
I bring them biscuits every time I go, so when they hear my truck they sit out by the front door.
When I leave they give that look, hoping I'm going back to my truck to get them a second course.
EDIT: the owner usually asks, "Do you need something or are you just here to feed the dogs?"

 

[Alex2507]

If they charge me to keep cash in the bank, will they pay me for being broke?

 

[markw]

If they charge me to keep cash in the bank, will they pay me for being broke?

Good question. they charge you money when you write a check and don't have the money in the account to cover it so I guess they would.

Now, how they would go about collecting it is anybodys guess. Forced organ donations maybe?

 

[herbu]

I wonder how free enterprise will affect this banking move. Perhaps we will see people moving their business away from big corporate banks and into local banks and credit unions. It would seem a smart banker could buck the trend and clean up. It will be interesting to watch. I wonder how many people really keep their savings, beyond a small liquid cushion, in the bank nowdays anyway.