Ticking time bomb

Message from greg:

The Fed is in a dilemma. In order to maintain the facade of an improving economy, they must "taper" eventually. But the "taper" can bring on an avalanche of liquidity hitting the markets. The result could be the hyperinflation that never showed because the money never hit the markets because the Fed was paying interest on an accumulating stash of hot money.

Published on Zero Hedge (http://www.zerohedge.com)

Home > The Fed Is Paying Banks Not To Lend

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The Fed Is Paying Banks Not To Lend

By Tyler Durden

Created 07/02/2013 - 16:48

It should come as no surprise to most ZeroHedge readers but sometimes the facts and data need to be reiterated to ensure the message is not getting lost. As Michael Snyder rhetorically asks,  did you know that U.S. banks have more than 1.8 trillion dollars parked at the Federal Reserve and that the Fed is actually paying them not to lend that money to us?  We were always told that the goal of quantitative easing was to "help the economy", but the truth is that the vast majority of the money that the Fed has created through quantitative easing has not even gotten into the system.  Instead, most of it is sitting at the Fed slowly earning interest for the bankers.  Our financial system is a house of cards built on a foundation of risk, leverage and debt.  When it all comes tumbling down, it should not be a surprise to any of us.

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Source URL: http://www.zerohedge.com/news/2013-07-02/fed-paying-banks-not-lend