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We like to think that when we deposit a dollar at the bank, it goes into a big vault and we can pull out that same dollar at any time. But that¿s not how the U.S. banking system works. Banks take that money and invest it to make money themselves, so cash gets spread around. This, naturally, leads to a big risk: What happens if those investments go sour? Well, you¿d be out of luck. You can¿t get your dollar back.
The Federal Reserve doesn¿t like that scenario, so it prohibits banks from putting all the cash it has on deposit on the line. In fact, the Fed forces banks to keep a portion of their assets at the Federal Reserve itself, to make sure that some of your assets won¿t get squandered if the bank¿s bets go south. These are called ¿reserves,¿ (hence, Federal Reserve. Got it? Good), and usually amount to 10% of the total cash kept in checking accounts.
These reserves are never exactly 10%, and banks like to keep a little extra in reserve ¿ not, as you might think, to make you more comfortable that they¿re in good financial shape, but rather so they can take that excess and lend it to other banks and make money off it. (They¿re banks, they can¿t help themselves.) The rate at which they make these loans is called the Federal Funds rate, which is set by the Federal Reserve¿s Federal Open Market Committee.
When you hear people chattering about how the Fed cut or hiked interest rates, this is what they¿re talking about: the interest rate banks can charge for lending money from their reserves. This begs the question: If these are essentially loans between banks, why is the Fed Funds rate so important for the rest of the economy?
Well, simply put, because loans make the financial world go round. Bank A lends Bank B $10,000 at a Fed Funds rate of 5%. Bank B then lends out $10,000 to a small business at 7%. The small business then takes that money and expands the business and hires new workers. Now someone is employed, Bank B has made interest off the loan, and Bank A is the richer for making it all happen. It¿s perhaps overly simplistic, but you get the idea. When you want the economy to thrive, you make lending cheaper.
Of course, sometimes you don¿t want the economy to thrive. In fact, you might want it to cool down, mostly to avoid money flooding the system and causing inflation. In that case, the Fed raises interest rates, making it difficult to lend or borrow.
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Friday, August 01, 2008
NNRF Shareholder Conference Call August 7 At 4:15 p.m. Eastern
Comtex
WASHINGTON, Aug 1, 2008 (PrimeNewswire via COMTEX) ----NNRF, Inc. (Pink Sheets:NNRI) today announced its shareholder conference call will be held on Thursday, August 7, 2008 at 4:15 p.m. Eastern time. The call, which will be one hour in length, will be hosted by Chief Executive Officer J. Holt Smith and Vice President, Chief Financial Officer Todd Sinclair.
Interested participants in the U.S. and Canada should call (866) 393-4656 and use Conference ID number 58984257. International participants should call (706) 679-4584 and use the same conference ID number.
A recording of the conference call will be available beginning August 7 at 5:15 p.m. Eastern time and will remain archived through September 7, 2008. To listen to the recording, please call (800) 642-1687 or (706) 645-9291 and use the same conference ID number as above.
NNRF is a U.S. corporation with executive and operations offices in Moscow Russia, Munich Germany and Washington D.C. NNRF, through its Russian based partners, offers design and manufacturing of specialized products for nuclear reactors, nuclear waste management; proprietary nuclear shielding, decommissioning and decontamination technologies; and engineering/design services for a range of nuclear and radiation related requirements. NNRF's management team has extensive industry and government service including extensive in-house expertise in all aspects of radiological protection and radiological waste management.
SAFE HARBOR STATEMENT:
Statements in this press release that are not historical facts are forward-looking statements, including statements regarding announcements of financial results, business potential and other prospective presentations by NNRF. Such statements reflect management's current views, are based on certain assumptions and involve risks and uncertainties. Actual results, events, or performance may differ materially from the above forward-looking statements due to a number of important factors, and will be dependent upon a variety of factors, including, but not limited to, our ability to obtain additional financing that will allow us to continue our current and future operations and whether demand for our products in domestic and international markets will continue to expand. NNRF undertakes no obligation to publicly update these forward-looking statements to reflect events or circumstances that occur after the date hereof or to reflect any change in NNRF's expectations with regard to these forward-looking statements or the occurrence of unanticipated events.
This news release was distributed by PrimeNewswire, www.primenewswire.com
SOURCE: NNRF, Inc.
NNRF, Inc. Shareholder Relations 760-564-7400
(C) Copyright 2008 PrimeNewswire, Inc. All rights reserved.
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