Finally, it's not just me saying it.
by James Denison - 8/27/13 7:19 AM
Numerous times I've said having Bernanke tossing money at the top does little to nothing for the economy. I've also said that without the money being used for jobs, like infrastructure to put it in circulation at the people's level it was basically worthless for economic improvement. Slowly, ever so slowly, it seems some are finally beginning to realize that. It took FDR almost 10 years to figure that one out and Obama, Bernanke and company are running on 5 years to figure it out.
What's that you say? They're hoarding the money? Just like in the 30's? Just like what lead to the Great Depression?
"much of the Fed's new money hasn't found its way to the economy, as
financial institutions—the major recipients of easy money—are too
nervous to put the capital to work. This nervousness is reflected in
nearly $2 trillion of excess free capital reserves, he explained.
Cashin offered an analogy: "Ben Bernanke flies over your house, he
drops $1 million on your lawn. You're so nervous that you put it in your
garage. That's what's happening in the banking system. ... The money is
not being lent or spent, so that can't be inflationary." (Related: Time for market to start worrying about September—yikes!)
"Unfortunately some of the history is shown in the period in the early
1930s. The Fed did some of the same things we're talking about now:
They got pushed by the White House, they pumped money into the system;
money backed up and stayed in the banking system," he said. "They then
interpreted that incorrectly and said 'money must be very easy.' " "