Zero Hedge has been poring through Federal Reserve documents to find out where all of the QE2 “stimulus” money went. If you thought it was going to US banks and into the US economy, you’d be wrong. This is stunning.
In summary, instead of doing everything in its power to stimulate reserve, and thus cash, accumulation at domestic (US) banks which would in turn encourage lending to US borrowers, the Fed has been conducting yet another stealthy foreign bank rescue operation, which rerouted $600 billion in capital from potential borrowers to insolvent foreign financial institutions in the past 7 months. QE2 was nothing more (or less) than another European bank rescue operation!
Read the whole thing, especially the implications for the US economy – including the devaluation of the dollar and how QE3 is practically a certainty.