The Fed is actually stopping the money from flowing where it, and we, most need it to flow.

Sir, Ruchir Sharma writes “The Fed can print all the money it wants – but it cannot dictate where it will go” “For a true stimulus, the Fed should drop QE3” September 11. 

Actually it is much worse than that, since the Fed, by means of capital requirements based on perceived risks imposed by their colleagues, the bank regulators, is dictating where money, or at least bank credit, should not flow, which is precisely where we and they would most want and need it to flow… to small businesses and entrepreneurs. 

Get rid of the distortions produced by bank regulators with a lot of hubris playing risk managers of the world and then perhaps a QE3, or better yet a helicopter drop, might actually have a chance to work.