Money's supposed to be created by econ activity and it's not there
I replied
This is Keynes and it is a complete failure... ...money "Created" by the FED is in the hands of the big banks...
After re-reading our posts and replies I realized an error.
Keynes actually says the opposite, Money flow creates economic activity. I missed the word "by" from your comment.
That said it doesn't change the fact that the FED is/was employing Keynesian economics to fuel economic growth.
This nor your chart changes my assertion that the money created is in the hands of the big banks.
The good thing is that at least the "money pump" is moving away from one source, the FED, to a few dozen, the big banks. The next phase would be for these banks to seek opportunities since what was once a guaranteed profit has been removed. There are still a lot of regulatory challenges the FED is placing on the banking industry via Dodd-Frank and the new consumer lending agency that need to be overcome.
Now some readers may think that this is still a Keynesian model, "Money Creating economic growth", but it is not.
Well, actually it is still Keynesian if the banks are controlled by the FED.
As the decision making becomes diffused from the FED to a dozen or so banks to a hundred or so other banks and institutions to thousands of businesses to hundreds of thousands of "ideas" among smaller businesses, real economic growth will follow. We are not there yet.
Agreed and thanks for your thoughts.
While governments can't run an economy we still use 'em to maintain order so we ourselves can run the economy. Leftwingers look to the Fed for econ growth but the only thing the Fed's good for is keeping a lid on inflation. Sure, congress passed some dumb law decades ago saying the Fed was supposed to make jobs (oh yeah, and eliminate the 'trade-deficit' too) but we all know that's a crock.
The big surprise to me is how much the Fed has actually managed to do for inflation with just a few tweaks to interest rates now and then. 'Tweaks' is all they got; it's not hard to see how the vast majority of interest rates are market driven.