SOS Savings

Well, printing money did in short term:

• improve confidence in financial sectors
• cause inflation on certain sector (insurance and education and food)
• increase public employment
• improve stock markets and stabilised real property sector

But... from the chart you will see:

• it did not change the trend of consumer confidence, consumer spending and job creation
• in fact Americans savings has increase to 5% from negative a year ago
• big chunck of money goes into buying toxic assets that does not generate new income
• cause misallocation of resources
• that the stock pile of unsold properties remain high
• no major change in trading of derivatives
• continue implotion of bad debts
• reducing on credit limits on credit cards

MyView

Common sense tell us that due to the shrinking in consumer spending, as well as corporate capital investment points to a slow growth because the main contributor to GDP is normalising gradually. Hence until all the bad debts and toxic assets being restructure (a few years time), the money printed will not get into income generating assets. You may bring the horse to the water, but the horse is not drinking.