The Federal Reserve has been pumping trillions into the TBTF banks, ostensibly so the banks will loan more money and spur the economy to get us out of the recession. Instead, banks keep the money in reserves and use it for margin money to make risky trades for themselves. This does not help the economy at large and the Fed is quite aware of this. They are using taxpayer money top keep mostly corrupt, insolvent banks afloat. This helps the 1%. It does not help anyone else.
A long as QE continues, and the Fed injects however many tens of billions into the commercial bank balance sheets each month, all talk of an economic recovery will be bullshit, simply because all of the Fed’s money makes it only into capital markets, resulting in asset inflation, but not into the economy, where it is up to commercial banks to create loans, and the resultant money that then leads to an increase in money velocity and ultimately, if allocated carefully, growth.
In the meantime, there will be no economic growth, period, as long as the loan creation in the top chart shown above refuses to move higher, and any talks of an economic recovery will be merely lies, propaganda and yes – more lies.