On this, WRH Commented:
Can you imagine what that 77 billion dollars would have done in circulation in the US, rather than as profit to a private central bank to which charges the US government interest to borrow from it?Which is completely arse backwards.
In the operations reported, the Fed was buying stuff from anyone who was in the market to sell. The stuff purchased, which included both government and privately issued securities, earned the Fed interest that contributed to its profits of $77.4 billion. Of that profit, the Fed delivered to the US Treasury $75.4 billion, i.e., the total profit less the Fed's seemingly quite adequate operating expense of $2 billion.
So all of the Fed's supposedly outrageous net profit actually went to the US government, which promptly put it into "circulation in the US" through its massive program of deficit war-mongering and welfare spending.
And over at the Slog, we find this:
The money siphoned out of the US economy by the banks during QEs 1 and 2 – calculated against the lending they might have produced for US exporters - nets out at a deficit reduction of some $2 trillion.Now the Slog has much to say that is eminently sensible and all that it says is said well, whether it is sensible or not, but this statement is not sensible at all.
QE and bank bailouts are not the same thing at all. Bailouts are, in fact, repayable loans backed by more or less credible collateral. And although the Fed's bank bailouts have been massive, $16 trillion, in fact, they have all been repaid (see Page 137 of the Government Accountability Office report on the US Federal Reserve).
QE is something altogether different. It consists in buying securities in the open market, usually government bonds, using "ink money", i.e., money that has been created out of thin air for the sole purpose of increasing the money supply. As indicated above, the income derived from the acquired financial instruments is turned over to the US Treasury, less the Fed's operating expenses, and used to finance the operations of government.
So, no, QE does not deny US industry capital to finance its operations. On the contrary, it injects money into the financial system that stimulates the economy through increased business investment, construction and consumption.