Interesting take, but it’s actually worse than that.
Because the Feds are lending money at (near) zero interest rates, and the financial institutions are risk-averse to extending credit at this point, instead they’re using the money for carry trades.
So, the hundreds of billions of bailout money are simply being used to line the pockets on Wall Street, weakening the dollar, while the “little people” get to endure Great Depression II.
Nice.
I agree with your analysis. Why risk loaning money to a small business in USA when you can make instant money betting against the dollar? So banks get money at near zero and get it out of the dollar to make money.
YOu are correct. The carry trade and all the added liquidity is lifting the stock market but is not doing a damn thing for employment/business growth.
It’s actually worse than worse than that.
The dems are proposing a "trading tax" to curb speculation and raise money. The real problem is zero interest rates promote wild speculation destroying the market with price swings from unlimited capital borrowed at zero interest.
It you actually paid interest on the money you borrowed, the speculation and market dislocations would lessen.