The fed is printing because a larger portion of money is going to pay down debt in both the consumer sector and in the business sector. The fed cannot print enough to either
A: make up the difference between historical levels of money supply in the economy and the currently depressed levels
or
B: Provide sufficient money supply to keep debtors from defaulting on their debts
Lower rates serve the function of B, but A is difficult if not impossible to do without large job creation projects and large main street style investment projects which the administration is so indifferent about. The psychological of a balance sheet recession is well documented, and massive amounts of indiscriminate stimulus often only stimulate more downpayment of debt, and reduction of any new debt.
I have a small business and the bank keeps literally offering me more credit cards 3% above prime so I can grow.... the manager calls and is putting on the sell, if thats not a sign of a balance sheet recession in the business sector, I don't know what is.
