Federal Reserve Chairman Ben Bernanke has not kept short-term interest rates at record lows for the past four years just so companies with no need for cash can borrow great sums of it for next to nothing.
So it was understandable, and even predictable, that this week's move by Amazon.com (AMZN) to issue $3 billion worth of bonds due in three, five and ten years at trivial rates scaling from 0.65% to 2.5% would be greeted with complaints about the misapplication of monetary succor.
Here, after all, is a company so dominant and capital rich that, only 18 years after its founding, it can borrow billions at less than one percentage point more than the United States Treasury does — while retirees and other blameless paragons of thrift are deprived of safe income from their savings by the Fed's anchoring of rates near zero.
The Crucial Reality
This formulation, casting Bernanke as a Robin Hood in reverse, misses the crucial reality of what the Fed has been trying to do and the ways in whichRead More »from Bernanke’s Easy-Money Moves: The Crucial Reality