^THIS. The system of lowering interest rates and 'printing money' only helps banks. Back in the day, banks made money by lending money and that WAS their job. T

^THIS. The system of lowering interest rates and 'printing money' only helps banks. Back in the day, banks made money by lending money and that WAS their job. The whole Keynesian move to 'pump money into the economy' was to encourage banks to loan money so businesses and houses could get loans.TODAY, since the repeal of Glass Steagall and other regs, banks are make their money by speculating and financial engineering. The larger public is out of the circuit (or at best only a small, ignorable part). There are essentially two economies- the one where the financial sector operates and the real one where people work. The financial sector trades trillions every day-orders of magnitude more than the flesh, blood, sweat and tears of humanity on this planet. When interest rates are falling and especially when the fall is perceived to be accelerating, the speculative instruments of the financial sector start to fail because the conditions on which their profits are predicated have changed. To prevent the collapse of these modern day robber barons, we have to pump money into the system- The government does this through the Fed who purchase bonds that are created to underwrite the financial sector. What we need is a way for the Govt to get money into the hands of the people who will spend it on real stuff that will stimulate our factories and housing industry. Although helicopter money is a phrase I hear more frequently, the method of execution so that it doesnt appear as an entitlement is obscure. Personally, I think the Fed should print money with a half life. This 'Fed coin' should be issued to every taxpayer and the value of that bequest should gradually fade away until it is spent. At which point it enters the economy and it's value is fixed.