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RE: The Mathematics of Fractional Reserve Banking

in #mathematics9 years ago

I can't reply to sigmajin because of nesting limits, but I don't think the Federal Reserve has the interest rate set next to nothing right now because they want to. Their quantitative easing plan was to make lending money cheaply to avoid a prolonged recession (or Great Depression 2.0) but now they can't raise rates again because the US government will not be able to pay up. Think of how much interest 20 trillion dollars will rack up with a higher rate.