tag:blogger.com,1999:blog-9612609.post8694861359304466337..comments2023-09-29T06:58:20.125-07:00Comments on Badtux the Snarky Penguin: What is a bank?BadTuxhttp://www.blogger.com/profile/01345749557330760251noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-9612609.post-32399756448874836202011-07-18T23:29:30.604-07:002011-07-18T23:29:30.604-07:00I'm Finally catching up and would like to know...I'm Finally catching up and would like to know if I can post this (with credit to you) on G+<br /><br />Did you see the f;Floridian that misses the crook in chief<br />www.gainesville.com/article/20110717/COLUMNISTS/110719697/-1/entertainment?Title=Missing-NixonCathhttps://www.blogger.com/profile/03098998958079042913noreply@blogger.comtag:blogger.com,1999:blog-9612609.post-51150373591152202792011-07-15T18:59:12.453-07:002011-07-15T18:59:12.453-07:00Oh yeah, why QE2 failed -- it was a) way too small...Oh yeah, why QE2 failed -- it was a) way too small, and b) did nothing to incentivate banks to move money out of the Fed and back into the economy. If the Fed started *penalizing* banks for having excess reserves, rather than *paying* banks, QE2 might have actually worked. As it stands, it was like pushing on a string. <br /><br />- Badtux the Stringy PenguinBadTuxhttps://www.blogger.com/profile/01345749557330760251noreply@blogger.comtag:blogger.com,1999:blog-9612609.post-90464634932122974962011-07-15T18:56:19.187-07:002011-07-15T18:56:19.187-07:00Nunya, actually not. The money went from one regis...Nunya, actually not. The money went from one register entry at the Federal Reserve (the "money printed" register) to another register entry at the Federal Reserve (the Bank of Hong Kong entry, say). The more fundamental issue is that banks are accumulating reserves because a) there is a shortage of qualified borrowers, b) there is an expectation of deflation meaning that the money will be worth more in the future, and c) the Federal Reserve is paying them more interest on the money than they could earn on the open market with the money. <br /><br />This issue (banks accumulating reserves) has nothing to do with whether the Fed buys bonds from private entities or buys them directly from the U.S. Treasury. Now, I hear you say, "but if it had gone straight to the U.S. Treasury, at least it would have gone through the economy once before ending up back in reserves." But MONEY IS FUNGIBLE. The money to buy bonds comes from the Federal Reserve either way. Here is the current money flow:<br /><br /><br />Investor: Withdraws $100K from bank to buy T-bill.<br />Bank: Withdraws $100K from Federal Reserve.<br />Fed: Prints $100K to bank, gets T-bill in exchange.<br />Treasury: Spends $100K in the economy.<br /><br />Totals: Banks=+$0, Treasury=$100, Fed has T-bill.<br /><br />Here is the money flow if the Fed bought directly from the Treasury:<br /><br />Fed: Prints $100K to Treasury, gets T-bill in exchange.<br />Treasury: Spends $100K in the economy.<br /><br />Totals: Banks=+$0, Treasury=$100K, Fed has T-bill.<br /><br />It's the same result either way. 1+2=3 just as much as 1+1+1=3, it's the same total regardless of whether you break it up into more operations or not.<br /><br />- Badtux the Numbers PenguinBadTuxhttps://www.blogger.com/profile/01345749557330760251noreply@blogger.comtag:blogger.com,1999:blog-9612609.post-62185057955286155852011-07-15T18:09:58.176-07:002011-07-15T18:09:58.176-07:00Why QE2 Failed: The Money All Went Overseas<a href="http://www.huffingtonpost.com/ellen-brown/qe2-shocker-the-whole-600_b_892621.html" rel="nofollow">Why QE2 Failed: The Money All Went Overseas </a>nunyahttps://www.blogger.com/profile/08833886980442919570noreply@blogger.comtag:blogger.com,1999:blog-9612609.post-42069325773009385462011-07-15T13:22:31.340-07:002011-07-15T13:22:31.340-07:00Thanks for the post. A basic definition the publi...Thanks for the post. A basic definition the public should be very familiar with.<br />Credit unions aren't immune from bank-like actions either. But I use one - it's pretty much a no-brainer.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9612609.post-65046905394256915562011-07-15T10:26:23.974-07:002011-07-15T10:26:23.974-07:00Then there's the level of service you get at c...Then there's the level of service you get at credit unions vs banks. The people at my credit union are knowledgeable and helpful. However, I've had various experiences with banks over the last few years as I closed out my late father's accounts.<br /><br />Small, regional banks: great service. Larger banks: utterly clueless non-service. Dad chose his banks by the CD rates they were offering at the time, so there was quite a spread. But just based on that experience, I would need a really, really good reason to deal with a Big Bank.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9612609.post-2743895416255794802011-07-15T01:10:38.144-07:002011-07-15T01:10:38.144-07:00A credit union is just a bank that's membershi...A credit union is just a bank that's membership-owned, Purple. It is still fundamentally a bank.<br /><br />Regarding availability of credit unions, it varies based on state. Here in California a state-chartered credit union can serve anybody who lives or works within its county, and there are a dozen credit unions I could join (I'm a member of one of them). In my brother's home state your employer must contract with a credit union to represent them before you're allowed to join as a member. Unfortunately his employer is based in Alaska and he is in a branch office far from Alaska, so being authorized to join an Alaska credit union isn't much of a benefit for him. <br /><br />I asked one person why he banked at Big Bank, and he said he traveled regularly and needed to deposit cash money in various cities and while the CU ATM network is pretty widespread, ATM's don't allow depositing cash. I pointed out that CU service centers exist in many cities that will allow you to deposit money regardless of which credit union you belong to. But that apparently didn't satisfy him.<br /><br />- Badtux the Member PenguinBadTuxhttps://www.blogger.com/profile/01345749557330760251noreply@blogger.comtag:blogger.com,1999:blog-9612609.post-70880244803796771362011-07-14T21:39:47.385-07:002011-07-14T21:39:47.385-07:00A bank is the place where people who don't kno...A bank is the place where people who don't know about credit unions go to.<br /><br />Seriously, why do more people use for-profit banks rather than a member-owned credit union? Are they simply less available outside of flyover land or what? 'cause here in the Midwest I have 3-4 different credit unions that I "qualify" for based purely on living/working in the area.purplepenquinhttps://www.blogger.com/profile/17985523216476971244noreply@blogger.com