The Federal Reserve has announced it is lowering the federal funds interest rate to between 0.00% and 0.25%. This means it will now be even easier for banks to create new money. When banks borrow money from the Federal Reserve, the Fed is not lending them money it has saved. The Fed is creating entirely new money that did not exist before. The banks then loan this money to individuals and businesses at an interest rate higher than the federal funds rate.
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