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The only ones hording money are the big banks.

Generally speaking, that statement while popular, isn't exactly true. I work for one of the "big banks" and I'll tell you exactly why big banks "aren't lending" and that's called THE BANKING REGULATORS. Over the course of the last 5-6 years now I've written extensively on this topic, I'm hoping this will be my last time. :-)

We have the regulators in our bank several times a year auditing our loan portfolio and capital reserves. Each time the damn' regulators come in and look at our loan portfolio and assess risk of default against that loan portfolio, each regulator comes up with a different result.

It's like the little government bastards have to find a way to justify their existence.

So regulator one comes in, assesses our loan portfolio and risk and says "everything's fine" ... so our capital reserve requirements don't change.

Some months later, regulator #2 comes in and does the same assessment, but finds different results. Magically, our risk of default within our loan portfolio goes up! That affects our capital reserves (the amount of money we must keep on hand to cover losses) and the amount we have to loan out.

Now, since January 2009 the regulators have continually re-interpreted and changed the rules affecting how each bank's loan portfolio's are examined and risk assessed.

Each time, the capital reserves we (and other banks too) are required to keep on hand has GONE UP. We have a regulatory/over-regulatory environment which has systematically REDUCED the amount of capital reserves in the banking system available for loans. That's been going on for 5 years.

Now, why are the Fed's increasing capital reserve requirements? First, they're trying to prevent another banking system failure resulting in bailouts (much of which WERE NOT NEEDED) and the second reason is to keep that money on the sidelines as much as possible as a back-door way to tamp down monetary inflation.

Remember: The Fed's been printing $80 billion a month for what, 5 years now, injecting that money into the economy. Absent "stealthy" mechanisms such as those I'm describing above from restricting the money supply, we'd have runaway inflation on everything, not just food, fuel and commodities.

Now, I'm not saying I agree a wit with the Fed's policies. In fact, I disagree as much as one person can disagree. What some major economists are now waking up to is that the bailouts and Fed buying bad assets should never have happened.

"Too big to fail" was a mistake and the reality is the Fed's actions have made "too big to fail" even worse. The problem is how does the Fed un-wind pumping $80 billion/month into the economy while keeping inflation in check?

Find alternative "stealthy" ways to restrict the money supply. That's how. The Government that created "too big to fail" created a situation where hyper-inflation would be a reality without their finding alternative "stealthy" ways to restrict access to that money via low-cost loans to businesses and consumers.

None of this "ends well" for our economy, eventually all the billions that the Fed pumped into the economy is going to have to be removed and that's when this country will feel real economic pain, likely making the great recession and the great depression look like a walk in the park.

Disclaimer: YES, I work for a big bank. NO I won't say who, other than to say we initially REFUSED TARP money until the Government stuck a gun to our heads and forced us to take it. The Federal Government and the Federal Reserve used "TARP" to hide the bad/failing banks from public view. If you want to know who the solid & straight-up players are in the banking industry, look at the top 10 bank that paid their TARP money back first.