Digitising thoughts

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The FED rate cut and outlook for the future

Posted by Sathyamurthy www.sathyamurthy.com on December 17, 2008

The way US FED is cutting rates, left, right and center, it appears that soon we will start seeing offers from banks and financial institutions to take a loan for buying something or other at 0% interest.

To top-up, they might pay you some interest and further give discount coupons to buy additional products at cheaper rates.

You see, they have to some how prop up the economy. What better way to do that than giving loans that will earn(!) interest for the borrowers.

It may well happen that a borrower will be better off than a depositor. A depositor will deposit money and earn some interest for some time and may not really get his money back as banks collapse. A borrower on the other hand will get the money, enjoy it and not worry about repaying.


One Response to “The FED rate cut and outlook for the future”

  1. Kamesh said

    This is really cool…reminds me of a scheme one of my past employers tried to come up with where the borrower actually gets to earn !! The situation as I see everyday in the US is extremely bad. People are now scrutinising the CEO’s salaries and comparing that to the 700B dollar bail out and asking why they should pay up for these guys’ millions!

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