Federal Reserve Chairman Ben S. Bernanke said the economy is barely expanding at a sustainable pace and that it’s possible the Fed may expand bond purchases beyond the $600 billion announced last month to spur growth.When I buy shares or corporate bonds of Archer Daniels Midland (ADM), I'm investing in a company that supports all phases of American agriculture. I invest in them because I think they're going to grow by creating more of what people want and need and will pay for. Implicitly, I'm saying that ADM will create economic growth. ADM does so because their managers want to make a higher profit. When they make more profit, they can expand and hire more people to make still more profit.
“We’re not very far from the level where the economy is not self-sustaining,” Bernanke said in an interview broadcast yesterday by CBS Corp.’s “60 Minutes” program. “It’s very close to the border. It takes about 2.5 percent growth just to keep unemployment stable and that’s about what we’re getting.”
When Ben invests his $600B in Federal debt, he's investing in an organization that is not motivated to produce profit or build things that people want and need and are willing to pay for. Why does he think this is going to lead to growth?
In simpler terms, if you wanted economic growth, would you put money into the hands of Congress and the President or would you put it in the hands of ADM?