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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: ChinuSFO who wrote (136021)	8/22/2013 11:59:15 AM
From: RetiredNow	Respond to of 149317

It's a good question. The reason why the top 1% benefit from Bernanke's QE and the 99% do not, is two-fold: 1) QE is implemented through creating money out of thin air, which is deposited in the Federal Reserve banks, who then use that cash to buy Treasuries and MBS. Those big banks, like GS, BoNY, and all the familiar cast of characters then get to keep the interest paid on those Treasuries and MBS. In addition, the Fed pays those same banks interest to keep their reserves parked in the Federal Reserve deposits. All of that has resulted in massive profits for Wall Street, which has gone into paying huge bonuses for the top 1% who work at those banks. 2) the massive purchases of Treasuries and MBS and the profits from that has also resulted in distortions in stocks. The people who benefit from artificial levitation of stocks and bonds are people with a lot of money invested in them....like me. The 99% have on average less than $10K invested...they really don't feel the wealth effect from stock and bond levitation at all. The bottom line is that QE is the mother of all trickle down policies. We all agree on this thread that Trickle Down is a fantasy. It doesn't work and never has. People like me just hoard the extra cash to line our pockets. These policies have never benefited the 1% and are just a gift to the 1%. Your question was a good one. Why can't Bernanke instead print the same amount of money ($85B per month) and use it in a way that directly benefits the 99%? Why not? Because it's all very simple. The Fed was created with one purpose in mind and that was to look out for the solvency of the big banks. They don't give two shits about anyone else. All of their posturing is designed to fool the 99% into thinking they are on their side. But actions speak louder than words. I follow the money and the actions, not the posturing.