Here's the process in more detail
What are essentially junk bonds are purchased from the big banks, by the Fed, at prices that are essentially financial gifts to the banks. A goodly portion of bank profits, bolstered by these Fed gifts, then go to investors/stockholders in the banks, who then invest their share of this ill-begotten booty into the stock market, thereby accomplishing three things:
1. keeping the stock market riding high,
2. helping make money for all who gamble in the stock market, and
3. assuring that the stock market won't collapse, even though stocks are way overvalued by historic standards, i.e. the P/E ratio, i.e. price/earnings ratio is today precariously high.
The Fed keeps interest rates at rock-bottom levels so as to pressure as many people as possible to invest in stocks, which also helps keep the value of stocks abnormally high. Problem is, this represents an immense theft from all retired people, most of whom are fearful of the stock market and who are living primarily on fixed incomes. Why call it theft? Because their life savings, which might otherwise be earning 6 or 7% from bank deposits and money market funds, are now earning 1% or less.
The value of the junk bonds that the Fed now holds as a result of being "so kind" as to buy this crap from big banks (thereby preventing their insolvency while boosting the confidence of investors generally) is more than$4.4 trillion. (So who can deny that this represents collusion between the Fed and big banks? And then, when the least well-off taxpayers are forced to pay the bill for all this, by way of greatly reduced interest payments on their savings accounts, and much higher tax rates than they would otherwise have to bear (thanks to huge interest payments on the national debt, which all taxpayers get hit with), the collusion can be seen to include the US government, which permits this kind of collusion to continue and which also collects the taxes from Joe Citizen and arrests those who don't pay.
Two economists from the Heritage Foundation explain
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