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Federal Reserve scraps transfer limits on bank savings accounts


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Federal Reserve scraps transfer limits on bank savings accounts

By Pete Schroeder
ReutersApril 24, 2020, 9:10 AM CDT
FILE PHOTO: Federal Reserve Board building on Constitution Avenue is pictured in Washington
FILE PHOTO: Federal Reserve Board building on Constitution Avenue is pictured in Washington

By Pete Schroeder

WASHINGTON (Reuters) - The U.S. Federal Reserve announced Friday that banks can now allow account holders to make an unlimited number of withdrawals and transfers from their savings accounts.

The central bank updated its rules to scrap the six-per-month limit that had previously existed for such accounts. The Fed said the move would help ensure people can access their funds "at a time when financial events associated with the coronavirus pandemic have made such access more urgent."

 

The Fed said it removed the limit because a recent policy shift had rendered it unnecessary.

In March, the Fed scrapped its reserve requirements for bank accounts as part of a broader effort to keep funds flowing to businesses and households amid the pandemic. Previously, banks were required to hold a certain amount of reserves against funds in "transaction accounts," like checking accounts, that saw money frequently coming and going. Banks did not have to hold similar reserves against savings accounts, but were limited in how often money could be moved from them.

The Fed said that after it eliminated reserve requirements for all types of accounts, it was no longer necessary to treat savings accounts differently.

 

 

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38 minutes ago, horsesoldier said:

Never let a great crisis go to waste. Imagine what can be accomplished when everyone’s eyes and attention are focused elsewhere.

 

Novus Ordo Seclorum 

 

Exactly.    This has to be a clue to whats really going to happen.    Just praying that we will be able to finally get our money back from Warka Bank when this is all said and done.   

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2 hours ago, horsesoldier said:

Never let a great crisis go to waste. Imagine what can be accomplished when everyone’s eyes and attention are focused elsewhere.

 

Novus Ordo Seclorum 


Very true Horsesoldier. This is all apart of the New World Order. Anyone that  disagrees with that doesn’t know their history. Or they watch CNN and Fox News or any of the other mainstream media outlets, and if that pisses anyone off that is reading this, then you should probably do your research before speaking something that doesn’t have one ounce of wisdom in it. 

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Whoa up here!  This rule change is a GOOD thing.  They are removing the restriction on how frequently you can withdraw your money from your own acount.  I think it's outrageous that they even had a limit on that in the first place. 

 

But what's scary is that the article mentions that last month the Fed removed its reserve requirements for bank accounts.  I didn't know that until just now, but it was bad enough that before, under fractional reserve banking, banks only had to keep 10% on hand to back up their loans and securities.  Now they don't have to keep anything.  I think that's super scary but this article from Forbes explains the supposed reasoning for it.  From what I've read lately, banks are lending less, not more, mortgages are harder to get and they aren't making SBA loans unless it's under PPP.  I hope this all works out..... thank goodness we have Trump in charge who's the master in finance.   link 

 

Reserve requirements cut to zero. THIS IS THE BOMB!

 

Going back in all of history, banks have been required to hold reserves against their assets - which are loans and securities. It’s simple – banks set aside a percentage of their assets as reserve and kept it in gold (for most of recorded history) or as cash at the Federal Reserve. This is a fundamental pillar of fractional reserve banking. Conceptually, the reserve gives depositors confidence that when they show up to take their money back, there will be cash to give them. It hasn’t always been nearly enough and if depositors get wary, they “run” to the bank to withdraw their money. Please re-watch “It’s a wonderful Life’ to see what happens during a bank run. It’s not pretty. It hasn’t just happened in black and white either. There were runs in 2007 and 2008 as depositors feared for their funds at several banks.
 

During the over 100+ years of Fed history, they have mandated the bank reserve ratio. Manipulation of the reserve requirement ratio has been one of their most powerful tools.  That ratio was north of 20% through most of the first fifty years of the Fed (including the great depression). It had made its way down to 10% - that was before today. Until further clarification or notice, banks need not hold any reserve against their assets. This means that banks could theoretically continue making loans to infinity.

Why put this weapon in the payload now? I believe it is a way for the Federal Reserve to deregulate unilaterally without intervention. The Federal Reserve, the FDIC, and other global regulators typically are very specific about the reserve requirements for each risk level of assets. Almost no reserves are required on government bond holdings compared to a much higher level on loans to levered companies. By calling the reserve requirement zero, the regulations become moot. It releases the banks to lend to whomever they want and in any size. This could be incredibly helpful now as levered companies may not have access to the public markets that are wary of the economy. Let’s see if the banks take the actions the Fed is promoting.

 

What do these actions mean to investors? The actions should satisfy the markets about the Fed’s intentions on liquidity - nearly unlimited. That, in turn, should firm up the government bond markets which were showing signs of malfunctioning late last week. As for the stock market, it is still a dual edged sword. The lower rates are always welcome, but the Fed has shot its biggest weapon and the Fed’s fear may be interpreted as justification of the worst-case scenario. The stock market is too volatile to gauge now; we may have seen peak volatility but what will the reaction be to an unprecedented number of earnings reductions for Q2? Hold your powder for a more observable bottom. The upside of unlimited bank lending will still be there like never before.

Edited by KristiD
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17 hours ago, Ziggy said:


Very true Horsesoldier. This is all apart of the New World Order. Anyone that  disagrees with that doesn’t know their history. Or they watch CNN and Fox News or any of the other mainstream media outlets, and if that pisses anyone off that is reading this, then you should probably do your research before speaking something that doesn’t have one ounce of wisdom in it. 

Thought provoking post Ziggy, if you had to pick 2 sources of a more honest news source, who would they be?

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1 hour ago, boosterbglee said:

Guess I can start stashing cash in my safe.....just in case!  Thanks KristiD!

Be very careful how you do that. Keep every receipt of your withdraws from the bank with the actual money you are given. In other words if you take out $5,000 when the bank gives you the receipt put that with the $5,000 they give you and then place that money in your safe. Do this with every withdraw you

make and do not mix the cash withdraws together, so that each withdraw has it's own bank receipt. 

By law it's illegal to have more than $10,000 cash on hand while traveling. And while you can legally 

keep more in your home, if you cannot prove where that money came from then the government can 

confiscate your money under current drug/terrorist laws until such time as you can prove where it came from. 

 

You might wanna look into cryptos as a safer and less regulated way of saving money. Some platforms 

even have the ability to link up debit cards so that you have access to your money anytime you like.

Coinbase is one of those sites. 

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2 hours ago, tn vol said:

Thought provoking post Ziggy, if you had to pick 2 sources of a more honest news source, who would they be?

Thank you Tn Vol. 

 

1. The Word of God - brings the Good News to a world of jacked up, wicked sinners like all of us. 
 

2. If I actually check the news, then I will just do research on my own to verify what’s “supposedly” the truth from mainstream media. 

23F3CE83-6085-4F01-A177-1049CA867FD7.jpeg

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On 4/24/2020 at 3:36 PM, Ziggy said:


Very true Horsesoldier. This is all apart of the New World Order. Anyone that  disagrees with that doesn’t know their history. Or they watch CNN and Fox News or any of the other mainstream media outlets, and if that pisses anyone off that is reading this, then you should probably do your research before speaking something that doesn’t have one ounce of wisdom in it. 

:salute:Damn Straight ! 

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