Your Money is Already Trading
Realizing what your bank is doing with your money may give you some good ideas!
You may not know it, but your money is already trading
Oddly enough, you are currently trading and probably do not even realize it. Whenever you open a bank account of any kind that requires the depositing of cash, you are in fact opening a “trade” account and your money will be traded. This is a FACT! Money does not sleep. It just naps for an hour at a time . . . even if it’s your money.
Cash deposits in a bank are not a hard asset of the Institution. They are an off balance sheet asset, a soft, fleeting asset. As such, the amount of the bank’s cash deposits changes hourly. You could deposit $500.00 dollars at 10 a.m., then withdrawal $300.00 of it at 1 p.m. It’s in the bank's best interest to make some money from these deposits rather than none at all—even if it is only for a couple of hours. And so they do. Your bank trades your cash hourly along with all of their depositors. Then the bank pays you nothing for its use of your cash.
This is how banks, hedge funds, insurance companies and other large corporations create cash flow and offset their losses from other investments and market conditions. If they did not have the ability to trade this money without actually spending it, they (the banks) could not create enough cash flow between them to stay open. They have to pay their bills, just like you do, and the bank’s bills are always getting higher, just like your bills are.
Banks cannot produce the capital gains and the funds they need to stay in business solely from interest earned, fees charged, penalties and services provided. In fact these revenue sources only make up 1/5th of the bank’s actual programs for cash generation and revenue retention. Banks also have a public interest to fulfill—they are the distribution center or hub for all monies that circulate through the system in one form or another. Checking accounts, savings accounts, investment accounts, loans and retirement accounts—to the bank, these are products and they sell them for a price.
Why are FREE checking accounts so important to banks?
But how can a bank offer FREE checking accounts to the public if they have to spend the money to create them and then to monitor them? What is the difference between a FREE checking account and a fee-charged checking account? Absolutely nothing, except that the bank gets paid fees on the fee-charged accounts.
FREE checking accounts drive business to the bank's door. This means more depositors and higher cash on hand—which leads to higher hourly cash balances for the bank's use in the hourly and daily trading that they conduct. They profit far more from their trading activity than they could ever raise through fees that they could charge you for your account in the first place. You may have never thought about this before, but perhaps now you can understand how large banks are able to produce billions of dollars in quarterly profits.
Should the bank be the only party trading your money?
So, as you evaluate the possibility of placing some of your funds in a small private program account, just bear in mind that, whether you know it or not, your money is already being traded. You agreed in the fine print when you opened your bank account. The problem with this scenario, however, is that all the trading profits related to your money are going to your bank. That’s right, other than the paltry interest rates being paid on checking/savings accounts these days, you’re not getting paid a dime of the trading profits that your bank is making with your money. Does this give you any ideas?
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