Just when the going gets weird…it gets even weirder.
Today, the Fed dropped the Prime to .25%. I’m no math genius or financial wizard, but that means that the Federal Reserve is loaning banks money for 1/4 of a percent. That’s 1/4 of a percent away from FREE. This means that if a bank actually has money to loan, and if you’re credit is squeaky-clean (know anybody like that? I don’t…) you can get a loan for a ridiculously low rate.
Mere mortals need not apply.
I’m sure everybody’s gonna wonder and worry over this. I don’t know why – when the Treasury is printing money like spammers send bulk emails, it’s all funny money. The only worry here is what are they gonna do when we get to ZERO? To cut rates further than that, we’d have to do negative interest, in other words, have the government pay the banks to take their money.
Oh, wait…they’re kinda already doing that. It’s called the TARP funds program.
Whoops.
Not much to say about this, other than buckle your seatbelts…it’s gonna be a bumpy night week month year decade.
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