Let me point you to something important you have to understand about the monetary system in order to evaluate stuff like QE properly: http://neweconomicperspect

Let me point you to something important you have to understand about the monetary system in order to evaluate stuff like QE properly: http://neweconomicperspectives.org/2011/09/mmp-blog-15-clearing-and-pyramid-of.html http://neweconomicperspectives.org/2011/09/mmp-blog-15-clear... Basically, there are two different circuits of money: central bank money (aka reserves), which is what the banks have in their accounts at the Fed, and regular money, which is what you and I have in our bank accounts. Those circuits never cross. The money in a central bank account can never move into a regular bank deposit, and vice versa. Therefore, the banks are actually incapable of loaning out all that money that they have, because the design literally doesn't allow it. To talk about their willingness to loan that money out is completely nonsensical. What banks actually do when they give a loan to a non-bank is that they simply create a deposit for that entity, which means they create money out of thin air by adding an appropriate entry to their accounting system. The system as is actually makes a lot of sense. It is a very logical design, which becomes very clear when you really trace where money shows up on balance sheets. The first circuit is central bank liabilities/bank assets, the second circuit is bank liabilities/non-bank assets. It's no wonder they can't cross. Unfortunately, we don't learn such things at school, so pretty much everything you read about the monetary system in the media is an incoherent and illogical mess.