The Federal Reserve has spent over $3.2 trillion in the post-Crisis era.
The bulk of this money printing has gone towards buying garbage mortgage securities or US Treasuries from Wall Street.
Because we’ve reached a point in time at which $1 trillion no longer sounds like a lot of money, we thought we’d go through the exercise of assessing just what the Fed could have done with this money besides give it to Wall Street.
With $3.2 trillion, the Fed could have:
1) Mailed a check for $10,223 to every man, woman, and child in the US.
2) Bought back all of the US debt owned by China, Japan, Belgium as well as the debt acquired via investors through the Caribbean islands.
3) Bought all of France’s economy for a year (or the UK or Brazil depending on its preference) and still had $600 billion or more left over.
4) Performed leveraged buyouts of California and Texas.
5) Funded NASA for the next 188 years.
6) Treated every person on the planet to $200 five star dinners at one of New York’s top restaurants, along with a night’s stay in the Big Apple.
7) Bought every human being on earth a PlayStation 4 gaming console… and still had enough money left over to buy all of Peru and Ireland’s economies for a year.
It’s quite impressive, isn’t it?
We’re repeatedly told that the Fed has to engage in QE to help the recovery and create jobs. But the facts show otherwise. The economy has added nearly 9 million jobs.
But the Fed could have spent the $3.2 trillion to create 12.8 million jobs in 2009, each paying $50K per year, and still be making payroll for them today.
Obviously, that’s an absurd notion, but then again, spending $3.2 trillion on anything without any evidence that your policies are really working is absurd (job growth remains anemic with the recovery being the worst in 80+ years).
Indeed, QE failed to put a dent in Japan’s jobs picture over the last 20 years. It also failed to do much for the UK. Why would it somehow be different in the US?
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Phoenix Capital Research