They're almost intent on keeping the funds within the financial sector. Why would they 'spread it out'?
But the point is that it can't do any good in the financial sector ('pushing on a string'). If it were sent outside that sector it would be spent, thus actually having a growth effect.
Apparently no one at the Fed has studied the great Depression or Japan.
Given that the Japanese invented QE and given Bernanke's reserach background...lol.
They don't want to redistribute wealth, only increase liquidity (that is oversimplifying a little bit of course)
Which it will not do - you can't increase liquidity with the amount of debt overhang (not to mention value of debt loss cover-up) at present.
Therefore, what QE will do, naturally, is create rampant speculation in asset classes and cause the dollar to decline, which should, yet again, cause commodities to skyrocket to the moon (they already have been the last couple of months).
When commodities skyrocket, the price businesses have to pay for materials, and down the line, what consumers have to pay for basics, will skyrocket also. This amounts to an incredibly regressive tax against poor people. Plus businesses won't hire (they have to pay more for goods). After all, when oil gets over $85/90 a barrel, it starts affecting a lot of businesses margins badly.
These are practical effects, not the really complicated stuff that could happen on the worldwide stage or in more esoteric markets, etc.
If the left or right have any cojones (or brains or if they actually care about poor/middle class people), they'll call for the resignation of Bernanke now. Let's see who figures this out first.
