Liquidity! because there's not enough oil to soothe the gears of the economy? Or is the root cause people hoarding money instead of pushing it back into the world?
When it comes to regular people; they will use the new Fed money to take loans to buy houses in speculative areas where those same corporations are headquartered.
The economy doesn't work. It has no incentive for value creation. It just takes money from people who have little capital and gives it to people who have big capital. Then, as the economy depletes capital from its most productive workers, it effectively enslaves them to capital holders who know everything about job creation but don't know the first thing about value creation.
Actually this explains rising inequality very neatly.
The FED is replacing the regular markets providing properly priced liquidity, it is only staving off a due recession in unhealthy sectors while completely fucking up the entire financial system; the next recession will be so severe, that the great recession will look like a walk in the park.
When everybody is too big to fail, capitalsim is dead.
Isn't the problem hoarding?
Everyone hoards. Rich people hoard wealth. Right? Not a moral statement. Preferential attachment (winner takes all) is just math.
The problem for society (the economy): we have all this unproductive capital (wealth) lying around, AND we have all this work that needs doing, BUT it's not efficient for rich people to manage a large basket of smaller investments.
So to grow the economy, we need better strategies to keep the money moving. Progressive taxation has worked in the past. YCombinator seems to have found a new way to match investors to opportunities more efficiently.
(Sorry, being a simple bear, I don't know of any other strategies. Maybe "Buy Local", which keeps the money moving in smaller networks.)
To me -- a person who barely understands "money", finance, economics -- it's really just that simple.
Keep the money moving.
Others have compared inflation to taxation; both reduce capital over time.
So is the converse true? Does lower, or even negative, inflation favor the hoarding of wealth?
However, speculative increases (buying land for increase in prices, buying shares for increase in share price, etc) and rent seeking adds price but doesn't add real value/investment to the economy.
Also how come they cannot inject this money directly to citizens instead of large companies? Sure, inflation might be larger but what guarantees are there that injecting money to large companies won’t create inflation later down the road.
Or use the money to buy back stocks, knowing that all your privileged buddies are doing the same, and if central banks would dare to raise interest rates you wouldn't be able to repay those loans, again holding the economy hostage with your scheme.