The Economy U.S. in 2015

How has it been that with all the billions of dollars per month that the Fed has injected into the money supply, how come the economy has not responded? Even though the Fed had tapered their money stimulus, the Fed's balance sheet has increased to over 4 trillion dollars up from a half of a trillion just a few years ago. So if the Fed has supplied the economy with essentially 4 trillion dollars, where is the money?

Following the money trail the Fed prints the money out of thin air and then lends it to the U.S. Treasury. Then the U.S. Treasury supplies the banks with this money at close to zero interest rates. So at this point the Banks have the stimulus money. This money was put into circulation to help the economy grow through lending for homes, business, etc. But most of the homes today were purchased with cash. Corporations are sitting on a record amount of cash. They have done this because they do not want to repatriate it and pay the tax on it.

Loans are not being made because of lending policies. corporations are not needing the money for expansion. What they are borrowing money for is to fund their operations because they would rather pay a low-interest rate of about 3% than repatriate the money they have overseas and pay 40% in tax. So at the end of the day, the money that was printed to fuel the economy has not been used for its intention.

The banks that have the stimulus money have invested it. They are paying almost nothing in interest and in turn investing it aggressively. This will be dangerous for the taxpayer because these banks are too large to fail and if or when the stock bubble pops the U. S. government will have to bail them out to keep a banking system alive. However this time this bubble is so large that it may ruin the economy as a whole and as a result collapse the "system" including the dollar.

If the banks are not going to use the money that was put into circulation for its intention. Then the U.S. government has a fiduciary responsibility to stop issuing bonds for the Fed to purchase. The system should realize that increasing the Fed's balance sheet that already has over 4 trillion dollars of treasury notes has to stop. When is when? If the economy has not been stimulated after trillions of dollars of stimulus, more is not the solution. If the money stimulus is the answer, force the banks to lend it or if they will not, then they must send it back to the U.S. government so that they can repay the federal loans.