What Zero Interest Rates Means to us??

If the Fed funds rate did drop to zero, it would not mean free money for consumers or businesses. The zero rate would only apply to the reserves that banks are required to maintain and that they lend to one another. Customers would still have to pay some interest, but the rates could be extremely low for some business borrowers.

But there are psychological reasons why the Fed would prefer not to cut its rate below 1%. The closer the Fed gets to zero, the more likely that investors will worry the U.S. economy is facing a long period of misery on par with what Japan faced after its real estate markets crashed in the early 1990s.

0% interest will also mean that I will pull my money out if that's that I get keeping in the banks, and possibly invest in gold because it will fuel inflation and not growth, with economy deteoriating, no chances of artifical growth with 0%. however it might take away billions of $ of deposits that folks will pull out and possibly either buy hard real estate on 100% cash or buy gold, some will buy stocks. All in all, Banks will feel the pinch more because they will lose deposit and 10 times the leverage on every single $ pulled out. When economy was doing OK, 1% interest rate in 2001 fueled housing.