Where Does All This Printed Money Go and What Does All This QE Do?

There’s a reason all of this printed money isn’t causing widespread consumer inflation, and it’s not a good one. The reason it isn’t increasing consumer pricing is because the money isn’t making it to consumers at all. It never gets out of Washington or Wall Street.

The QE structure of liquidity injection that’s been the Fed’s morphine of choice since the 2007 meltdown means that printed money enters the system as reserves, not through the commercial banking system, as it once did.

Banks sitting on street corners recklessly lending money they don’t have — they are the agents of consumer inflation. But as we all know, the corner bank has been anything but generous with their money for quite some time now.

The people who think lower rates spur the economy are mistaking manmade asset bubbles with manmade assets. We have inflation alright, it’s just in the capital markets and housing markets instead of the super markets. What, a gallon of milk doubling in price overnight is inflation but Amazon stock doing the same isn’t? You’re right. It’s not the same. It’s worse.