Bernanke is trying every way he can to get banks to lend (printing coupled with a multitude of lending facilities and Fed programs).



It's easy enough to prove the printing: Base money supply is up about $1.8 trillion since the start of the recession.



Base Money Supply







Money Multiplier Theory



The Money Multiplier Theory (an incorrect theory) suggests this money would be lent out 10 times over causing rampant price-inflation and GDP growth.



Alternate (Correct) Bank Lending Theory





Banks do not lend simply because they have the money Banks lend as long as they have credit-worthy customers provided the banks are not capital impaired Reserves are not an issue. Lending comes first, reserves follow if needed.

Money Multiplier Theory is nonsense Banks are still capital impaired and/or banks have no credit-worthy borrowers who wish to borrow money