How QE3 Will Make The Wealthy Even Wealthier While Causing Living Standards To Fall For The Rest Of UsMichael Snyder, Contributor So this is going to be a huge windfall for some people, and that does not include us. Not a single penny of this 40 billion dollars a month will go directly into our hands. The theory is that it will filter down to us eventually. But that hasnt happened with previous rounds of quantitative easing. So where does the money go? It said that the Bank of Englands policies of quantitative easing similar to the Feds had benefited mainly the wealthy. Specifically, it said that its QE program had boosted the value of stocks and bonds by 26 percent, or about $970 billion. It said that about 40 percent of those gains went to the richest 5 percent of British households. Many said the BOEs easing added to social anger and unrest. Dhaval Joshi, of BCA Research wrote that QE cash ends up overwhelmingly in profits, thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it. Wow. Who benefits from quantitative easing? According to the Bank of England, it is mainly the wealthy who benefit. As I noted the other day, Donald Trump said essentially the same thing when he told CNBC the following. People like me will benefit from this. As I already discussed above, a lot of quantitative easing money gets into the financial markets where it pumps up the prices of financial assets. But not all of it goes there. We were told that the whole idea behind quantitative easing was that it was supposed to get banks lending again, but this has not happened. Instead, banks are sitting on unprecedented amounts of money. Just look at how the first two rounds of quantitative easing have caused excess reserves being held by banks to explode from close to zero to over 1.5 trillion dollars. Yes, you read that correctly. The Federal Reserve is paying banks to park money with them. So instead of risking their money by lending it out to us, the banks can just park it at the Fed and make risk-free profits for as long as they want. Must be nice. If the Federal Reserve really wanted banks to start lending again, all the Fed has to do is to stop paying banks not to lend money. But of course if more than 1.5 trillion dollars suddenly started flooding into our economy (especially after you consider the multiplier effect) we would be dealing with nightmarish inflation unlike anything we have ever seen before. So if you want to know why inflation was not even worse after QE1 and QE2 it is because more than a trillion and a half dollars is being parked with the Fed. So did QE1 and QE2 do any good for average Americans? Lets go to the charts. This first chart shows that the percentage of working age Americans with a job has stayed extremely flat since the end of the last recession. Does it look like QE1 and QE2 made a difference to you? I dont see any difference. Nope. Sadly, the truth is that things have steadily gotten worse for average Americans over the past 4 years despite all of the money printing the Fed has been doing. If you doubt this, just readthis article. But this is all that Ben Bernanke seems to have left. When printing money doesnt work, his answer is to print even more money. QE3 is likely to cause agricultural commodities and the price of oil to rise even further. So unless you can convince your employer to give you a corresponding raise, this is going to mean that your paychecks are not going to go as far as they did before. And so that means a lower standard of living. In a recent article, Bruce Krasting issued an ominous warning. Higher inflation expectations in the US will filter around the globe. Post the extraordinary steps Ben took yesterday, people will be stocking up on stuff. Things like rice, flour, cooking oil, soy, wheat and sugar. If you can eat it, buy it now. It will be more expensive in a month. While your at it, fill up the gas tank, the price is going up next week and every week for the next few months. In addition, the policy of the Federal Reserve of keeping interest rates as low as possible is absolutely crippling the finances of many retirees. Even the former president of the Federal Reserve Bank of Atlanta, William F. Ford, recognizes this. One of the overlooked consequences of the Federal Reserves recent rounds of monetary stimulus is the adverse impact those policies have had on the interest income of savers. The prolonged and abnormally low interest-rate structure put in place by the Fed has made life particularly difficult for retirees and others who depend on conservative interest-sensitive investments. But the negative effects do not stop there. They spillover into the overall performance of the economy. Just about everything that the Federal Reserve does these days is bad for ordinary Americans. But the Fed is not going to stop. The Fed is addicted to money printing now, and as a recent article by Peter Schiff explained, the Fed is just going to up the dosage until it gets what it wants. The Fed will try to conjure a recovery on the backs of currency debasement. It will not stop or alter from this course. If the economy fails to respond to the drugs, Bernanke will simply up the dosage. In fact, he is so convinced we will remain dependent on quantitative easing that he explicitly said he wont turn off the spigots even if things noticeably improve. This is complete and total incompetence by Ben Bernanke and his cohorts over at the Fed. Economist Marc Faber believes that Ben Bernanke should resign, and I agree with him. If I had messed up as badly as Bernanke I would for sure resign. The mandate of the Fed to boost asset prices and thereby create wealth is ludicrous it doesnt work that way. Its a temporary boost followed by a crash. And yes, a crash is coming. Bernanke can try to put it off for a while, but every action he takes is just making the eventual crash even worse. And some in the financial community clearly recognize this. For example, credit rating agency Egan-Jones downgraded the credit rating of the United States to AA- on Friday. The primary reason they gave for the downgrade was QE3. Ben Bernanke and the Federal Reserve are destroying the U.S. dollar and destroying our financial system for a short-term economic sugar high. It is utter insanity. Please share this article with as many people as you can. Hopefully we can get the American people to understand that more money printing is definitely not the solution to our problems. This article first appeared here at the Economic Collapse. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here. linkwithin_text=Related Articles: 