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In a way the Fed does hand out free money to the rich, because well-connected institutions that can borrow money from the Fed, do so at a lower interest rate th
by jcbrand 6y ago
In a way the Fed does hand out free money to the rich, because well-connected institutions that can borrow money from the Fed, do so at a lower interest rate than everyone else who can't.
They can then turn around and lend that money out to the rest of us at a higher interest rate, pocketing the difference.
Free money.
- deleted 6y ago[deleted]
- kortilla 6y agoNo, not free money. The people that can’t loan from the FED are higher risk than the ones that can, so the bank is taking on default risk the FED wouldn’t have.
- jcbrand 6y agoNo, some of the banks that get these artificially low interest rate loans from the FED would go bankrupt without them. They're being propped up.