Hoisington On The End Of The Fed's (Mythical) "Wealth Effect"

Tyler Durden's picture

Authored by Lacy Hunt and Van Hoisington of Hoisington Investment Management,

Hoisington Investment Management – Quarterly Review and Outlook, First Quarter 2014

Optimism at the FOMC

The Federal Open Market Committee (FOMC) has continuously been overly optimistic regarding its expectations for economic growth in the United States since the last recession ended in 2009. If their annual forecasts had been realized over the past four years, then at the end of 2013 the U.S. economy should have been approximately $1 trillion, or 6%, larger. The preponderance of research suggests that the FOMC has been incorrect in its presumption of the effectiveness of quantitative easing (QE) on boosting economic growth. This faulty track record calls into question their latest prediction of 2.9% real GDP growth for 2014 and 3.4% for 2015.

A major reason for the FOMC’s overly optimistic forecast for economic growth and its incorrect view of the effectiveness of quantitative easing is the reliance on the so-called “wealth effect”, described as a change in consumer wealth which results in a change in consumer spending. In an opinion column for The Washington Post on November 5, 2010, then FOMC chairman Ben Bernanke wrote, “...higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.” Former FOMC chairman Alan Greenspan in a CNBC interview on Feb. 15, 2013 said, “The stock market is the key player in the game of economic growth.” This year, in the January 20 issue of Time Magazine, the current FOMC chair, Janet Yellen said, “And part of the [economic stimulus] comes through higher house and stock prices, which causes people with homes and stocks to spend more, which causes jobs to be created throughout the economy and income to go up throughout the economy.”

FOMC leaders may feel justified in taking such a position based upon the FRB/US, a large- scale econometric model. In part of this model, employed by the FOMC in their decision making, household consumption behavior is expressed as a function of total wealth as well as other variables. The model predicts that an increase in wealth of one dollar will boost consumer spending by five to ten cents (see page 8-9 “Housing Wealth and Consumption” by Matteo Iacoviello, International Finance Discussion Papers, #1027, Board of Governors of the Federal Reserve System, August 2011). Even at the lower end of their model's range this wealth effect, if it were valid, would be a powerful factor in spurring economic growth.

After examining much of the latest scholarly research, and conducting in house research on the link between household wealth and spending, we found the wealth effect to be much weaker than the FOMC presumes. In fact, it is difficult to document any consistent impact with most of the research pointing to a spending increase of only one cent per one dollar rise in wealth at best. Some studies even indicate that the wealth effect is only an interesting theory and cannot be observed in practice.

The wealth effect has been both a justification for quantitative easing and a root cause of consistent overly optimistic growth expectations by the FOMC. The research cited below suggests that the concept of a wealth effect is in fact deeply flawed. It is unfortunate that the FOMC has relied on this flawed concept to experiment with over $3 trillion in asset purchases and continues to use it as the basis for what we believe are overly optimistic growth expectations.

Consumer Wealth and Consumer Spending

Many episodes of rising and falling financial and housing asset wealth have occurred throughout history. The question is whether these periods of wealth changes are associated in a consistent and reliable way with changes in consumer spending. We examined, separately, percent changes in real consumption expenditures per capita against percent changes in the real S&P 500 index (financial wealth) and against percent changes in Robert Shiller’s real home price index (housing wealth). If economic relationships are valid they should work for all time periods, regardless of highly different idiosyncratic conditions, as opposed to an isolated subset of historical experience. As such, we conducted our analysis from 1930 through 2013, the entire time period for which all variables were available.

Financial Wealth. Chart 1 is a scatter diagram of current percent changes in both real per capita personal consumption expenditures (PCE), the preferred measure of spending, and the real S&P 500 stock price index. It is made up of 84 dots, which constitutes a robust sample. Over our sample period, as with most extremely long periods, time will tend to link economic variables to each other; population is a key factor that can cause such an association. By expressing consumption in per capita terms, trending has been reduced, and in turn, an artificially overstated degree of correlation has been avoided.

If financial wealth drives consumer spending, an unambiguous positively sloped line should be evident on this scatter diagram. Larger gains in the S&P 500 would be associated with faster increases in spending; conversely, declines in the S&P 500 would be tied to lower spending. If there was a strong positive correlation, the large gains in stock prices would be associated with strong gains in spending, and they would fall in the upper right quadrant of the graph. In addition, sizeable declines in the S&P would be associated with large decreases in consumer spending, and the dots would fall in the lower left quadrant, resulting in an upward sloping line. For the relationship to be stable and dependable the dots should be packed in an around the trend line. This is clearly not the case. The trend line through the dots is positive, but the observations in the upper left quadrant of the graph and those in the lower right exhibit a negative rather than positive correlation. Furthermore, the dots are not clustered close to the trend line. The goodness of fit (coefficient of determination) of 0.27 is statistically significant; however, the slope of the line is minimally positive. This suggests that an approximate one dollar increase in wealth will boost real per capita PCE by less than one cent, far less than even the lower band of the effect in the Fed’s model.

Theoretically, lagged changes are preferred because when current or coincidental changes in economic variables are correlated the coefficients may be biased due to some other factor not covered by the empirical estimation. Also, lags give households time to adjust to their change in wealth. As such, we correlated the current percent change in real per capita PCE against current changes as well as one- and two-year lagged changes (expressed as a three-year moving average) in the S&P 500. The lags did not improve the goodness of fit as the coefficient of determination fell to 0.21. An increased dollar of wealth, however, still resulted in a one cent increase in consumption. We then correlated current percent change in real per capita PCE with only lagged changes in the real S&P 500 for the two prior years (expressed as a two-year moving average), and the relationship completely fell apart as the goodness of fit fell to a statistically insignificant 0.06.

Housing Wealth. Chart 2 is a second scatter diagram, relating current percent changes in real home prices to current percent changes in real per capita PCE. Once again, the trend line does have a small positive slope, but there are so many observations in the upper left quadrant that the coefficient of determination does not meet robust tests for statistical significance. The dots are even more dispersed from the trend line than in the prior scatter diagram.

As with the analysis on financial wealth, when current changes in consumption were correlated against the lagged changes in home prices (both the three-year moving average and the two-year moving average), the goodness of fit deteriorated significantly and was not statistically significant in either case.

Correlations, or the lack thereof, indicated by these scatter diagrams do not prove causation. Nevertheless, economic theory offers an explanation for the poor correlation. If a person has an appreciated asset and wishes to increase spending, one option is to sell the asset, capture the gain and buy something else. However, the funds to make the new purchase comes from the buyer of the asset. Thus, when financial assets are sold, money balances increase for the seller but fall for the buyer. The person with an appreciated asset could choose to borrow against that asset. Since new debt is current spending in lieu of future spending, the debt option may only provide a temporary boost to economic activity. To avoid an accentuated business cycle, debt must generate an income stream to repay principal and interest. Otherwise any increase in debt to convert wealth gains into consumer spending may merely add to cyclical volatility without producing any lasting benefit.

Scholarly Research

Scholarly research has debated the impact of financial and housing wealth on consumer spending as well. The academic research on financial wealth is relatively consistent; it has very little impact on consumption. In “Financial Wealth Effect: Evidence from Threshold Estimation” (Applied Economic Letters, 2011), Sherif Khalifa, Ousmane Seck and Elwin Tobing found “a threshold income level of almost $130,000, below which the financial wealth effect is insignificant, and above which the effect is 0.004.” This means a one dollar rise in wealth would, in time, boost consumption by less than one-half of a penny. Similarly, in “Wealth Effects Revisited 1975- 2012,” Karl E. Case, John M. Quigley and Robert J. Shiller (Cowles Foundation Discussion Paper #1884, December 2012) write, “The numerical results vary somewhat with different econometric specifications, and so any numerical conclusion must be tentative. We find at best weak evidence of a link between stock market wealth and consumption.” This team looked at quarterly observations during the 17-year period from 1982 through 1999 and the 37-year period from 1975 through the spring quarter of 2012.

The research on housing wealth is more divided. In the same paper referenced above, Karl E. Case, John M. Quigley and Robert J. Shiller write, “In contrast, we do find strong evidence that variations in housing market wealth have important effects upon consumption.” These findings differ from the findings of various other economists. In “The (Mythical?) Housing Wealth Effect” (NBER Working Paper #15075, June 2009), Charles Calomiris, Stanley D. Longhofer and William Miles write, “Models used to guide policy, as well as some empirical studies, suggest that the effect of housing wealth on consumption is large and greater than the wealth effect on consumption from stock holdings. Recent theoretical work, in contrast, argues that changes in housing wealth are offset by changes in housing consumption, meaning that unexpected shocks in housing wealth should have little effect on non- housing consumption.”

Furthermore, R. Glenn Hubbard and Anthony Patrick O’Brien (Macroneconomics, Fourth edition, 2013, page 381) provide a highly cogent summary of the aforementioned research by Charles Calomiris, Stanley D. Longhofer and William Miles. They argue that consumers “own houses primarily so they can consume the housing services a home provides. Only consumers who intend to sell their current house and buy a smaller one – for example, ‘empty nesters’ whose children have left home – will benefit from an increase in housing prices. But taking the population as a whole, the number of empty nesters may be smaller than the number of first time home buyers plus the number of homeowners who want to buy larger houses. These two groups are hurt by rising home prices.”

Amir Sufi, Professor of Finance at the University of Chicago, also indicates that the effect of housing wealth is much smaller than assumed in the policy models and earlier empirical research. Dr. Sufi calculates that an increase of one dollar of housing wealth may yield as little as one cent of extra spending (“Will Housing Save the U.S. Economy?”, April 2013, Chicago Booth Economic Outlook event). This is in line with a 2013 study by Sherif Khalifa, Ousmane Seck and Elwin Tobing (“Housing Wealth Effect: Evidence from Threshold Estimation”, The Journal of Housing Economics). These economists found that a threshold income level of $74,046 had a wealth coefficient that rounded to one cent. Income levels between $74,046 and $501,000 had a two cent coefficient, and incomes above $501,000 had a statistically insignificant coefficient.

In total, the majority of the research is seemingly unequivocal in its conclusion. The wealth effect (financial and housing) is barely operative. As such, it is interesting to note its actual impact in 2013.

Where Was the Wealth Effect in 2013?

If the wealth effect was as powerful as the FOMC believes, consumer spending should have turned in a stellar performance last year. In 2013 equities and housing posted strong gains. On a yearly average basis, the real S&P 500 stock market index increase was 17.7%, and the real Case Shiller Home Price Index increase was 9.1%. The combined gain of these wealth proxies was 26.8%, the eighth largest in the 84 years of data. The real per capital PCE gain of just 1.2% ranked 58th of 84. The difference between the two was the fifth largest in the 84 cases. Such a huge discrepancy in relative performance in 2013, occurring as it did in the fourth year of an economic expansion, raises serious doubts about the efficacy of the wealth effect (Chart 3).

In econometrics, theoretical propositions must be empirically verifiable. Researchers using numerous statistical procedures examining various sample periods should be able to identify at least some consistent patterns. This is not the case with the wealth effect. Regardless if examining a simple scatter diagram or something far more sophisticated, the wealth effect is weak and inconsistent. The powerful wealth coefficients imbedded in the FRB/US model have not been supported by independent research. To quote Chris Low, Chief Economist of FTN (FTN Financial, Economic Weekly, March 21, 2014), “There may not be a wealth effect at all. If there is a wealth effect, it is very difficult to pin down ...” Since the FOMC began quantitative easing in 2009, its balance sheet has increased more than $3 trillion. This increase may have boosted wealth, but the U.S. economy received no meaningful benefit. Furthermore, the FOMC has no idea what the ultimate outcome of such an increase will be or what a return to a ‘normal’ balance sheet might entail. Given all of this, we do not see any evidence for economic growth as robust at the FOMC predicts.

Without a wealth effect, the stock market is not the “key player” in the economy, and no “virtuous circle” runs through the stock market. We reiterate our view that nominal GDP will rise just 3% this year, down from 3.4% in 2013. M2 growth in the latest twelve months was 5.8%, but velocity should decline by at least 3% and limit nominal GDP to 3% or less.

The Flatter Yield Curve: An Opportunity for Treasury Bond Investors

The Fed has indicated that the federal funds rate could begin to rise in the next couple of years, and the Treasury market has moderately anticipated this event. Similar to the 2004-2005 federal funds rate cycle, long before the federal funds rate increased short Treasury rates began their ascent (Chart 4). Interestingly, once the federal funds rate did begin to rise in 2004, long Treasury rates fell over the next two years. From May of 2004 until Feb. 2006 the federal funds rate increased by 350 basis point (bps) and the five-year note increased by 80 bps, yet the 30-year bond fell by 84 bps as inflation expectations fell. If the Fed follows through with its forecast and short rates rise, the dampening effect on inflation expectations should again cause long rates to fall. On the other hand, should economic activity continue to moderate then the downward pressure on inflation will continue. The prospect for lower Treasury yields appears favorable.

Van R. Hoisington
Lacy H. Hunt, Ph.D.

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SDRII's picture

But lazear was just on with santelli who said 50 s and put points equals 2.5 % gdp growth simply can't make this up. 

TruthInSunshine's picture

I read this essay 3 times, now.

IMO, it is one of the finest analyses to ever be republished on Zero Hedge. It highlights the essential flaw in the whole "virtuous circle/wealth effect" canard tossed out frequently and without hardly any objective, supporting evidence by the likes of Bernanke, Greenspan & now, Yellen, as well as those - mainly Keynesian dogmatists - who blindly support their real economy destroying monetary policy.

QE is akin to a snake eating its own body. The middle section (middle class) is essentially digested now, and the snake is now proceeding to begin to swallow the new "middle class" (at least in terms of income, where those in the 92rd percentile of income earners make a surprisingly small, both in real and nominal terms, annual income of $57,000 or more.

Watch as the 92nd percentile through 98th percentile are now forced to directly compete for fewer resources/opportunities, while paying more in terms of taxes (in real and nominal terms), a process that's already begun in earnest.

I do not wish to sound too hyperbolic, but I do not believe it's a stretch to claim that it's objectively true that the biggest structural change in economic strata has happened over the last 5 years (and is continuing), in terms of income distribution and in terms of newly erected hurdles to social and economic mobility in the United States, since the 1930s.

The financialization of the U.S. Economy nears completion, with the parasitic bleeders (banks/financial entities/all things Wall Street/government workforce/other entities and people who do nothing, yet reap the direct rewards and subsidies of insane monetary policy) feeding off of and destroying the real creators of tangible wealth at a rapid clip.

Unfortunately, there can be no change in the trajectory until these parasites lose their ownership over the very politicians, courts, regulatory agencies, media outlets and other institutions that have traditionally served as checks against unfettered growth and dominance of and by Oligarchs, who are not true capitalists, but exist and grow stronger by buying the power to starve what/who would be their rising competitors if more free markets existed.

I've always maintained that the U.S. is merely 30 to 40 years behind the UK in terms of its social/economic strata, the financialization of its economy, and the takeover of its legislative, judicial and executive branches (PM in the case of Britain) by the banking/finance sector.

At least when Carnegie & Rockerfeller were Oligarchs, their companies still made or extracted things of tangible, real value, despite all the undeniable social and economic ills that existed at that time; at least the U.S. was still on a trajectory of economic ascent, and there would soon be a vibrant, growing, robust middle class to build and buy products produced in the firm sense of the word, and employment wouldn't be structurally declining (just the opposite).

Now, do nothing banks and financial entities run the entire show, and own the entire power structure, from top to bottom. It's a sad, sad era in American History, and it's likely to get far worse unless something radical happens to alter this course.

Thanks for all you do, TDs.

Sam Spade's picture

Lacy Hunt is a brilliant economist (a former chief economist for the Dallas Fed), one of a handful who truly gets it.  He synthesizes a ton of information and history (not to mention the latest academic research) into his quarterly five-page reports.  And you can find them for free at the Hoisington website, which is incredible to me, when you consider all the morons out ther with their worthless $500/year investment newsletters. 

TruthInSunshine's picture

I genuinely wish that Jeremy Stein had stayed on at the Fed.

If there was any hope of rehabilitating such an utterly destructive, puppet of the banking/financial institutions, it was lost when he resigned his position'recently.

Then again, I'm being naive, since there really is no hope of rehabilitating the Fed, BECAUSE it is an utterly destructive, puppet of the banking/financial institutions.

befuddled's picture

30 or 40 years behind the UK? Less than half that, IMO. Key is the mental state of the electorate: in the 40-odd years since the mid-6os,  much of the UK has decayed into a passive, reactive, whiney mess, a pathetic state characterized by a deep sense of entitlement  and zero sense of responsibility. Hell, they've got social leeches claiming 'Job Seeker's Allowance', a form of long-term dole, for nearly 50 years, and entire families in government warehouse-slums (so called 'sink estates') where nobody's worked in three generations.  Toss in state-controlled broadcasting,  a craven judicial system and ideologically-driven-yet-never-accountable  MSM, and you've got the perfect formula for total collapse.  That's the UK today -- ignorant, smug, pussy-whipped,  hopelessly lost every step of the way.


Sound familiar?

neidermeyer's picture

Chart #2 has me puzzled ,, at current prices I am down 65% relative to 2007 and am still down 15% relative to 1998 , I don't see a "down 65%" datapoint on that scatter chart ,, I don't even see a "down 50%" which is where I'd be if my house was maintained to pristine ready to sell standards..

rosiescenario's picture

“There may not be a wealth effect at all. If there is a wealth effect, it is very difficult to pin down ...”


....it is easy to pin down...just check the sales of exotic cars right now....real estate in D.C. and NYC....it is very clear there was a wealth effect and .1% of the population benefited from it.

NoDebt's picture

The "wealth effect" is the cover story that people like to talk about because it's polarizing and makes for attention-grabbing headlines.  The real story is they are monetizing debt because they realized long ago there is no possibility of "growing our way out of it."

highly debtful's picture

Agreed. This whole mess reminds me of the words of German propaganda minister Joseph Goebbels, who told the truth for a change on a conference on november 29 1944:

"Let me make myself perfectly clear. We have nothing left. There are no wonder weapons." 

Their plan A isn't working. And there ain't no plan B. Popcorn indeed.

Al Huxley's picture

I've come to believe that debt monetization is just a side effect of recapitalizing the banks on the backs of accumulated public wealth and savings.  I don't think they give a fuck if the US govt goes bust, but it suits their interest to keep it alive for a while as they suck all the blood from the population at large.

NoDebt's picture

I think the Federal Government going bust matters to them a LOT.  They are symbiotic beings.  One dies, they both die.  No doubt they are managing the middle-class bloodletting with high precision, though. 

Banks don't own armies.  The "banking elite" can't pull up stakes and move anywhere they want.  The Rothschilds don't translate too well in China, Russia, India or Iran.  They're tied to "western cultures".  That means the US and Europe.  Those other cultures have their OWN banking elites that aren't going to let interlopers just walk in and push them aside.

LawsofPhysics's picture

"Banks don't own armies."-  LMFAO!!!! 


I suggest you do some more homework kid.

hobopants's picture

"The person with an appreciated asset could choose to borrow against that asset. Since new debt is current spending in lieu of future spending, the debt option may only provide a temporary boost to economic activity. To avoid an accentuated business cycle, debt must generate an income stream to repay principal and interest. Otherwise any increase in debt to convert wealth gains into consumer spending may merely add to cyclical volatility without producing any lasting benefit."

Pretty much says it all.

socalbeach's picture

I'm sure the Fed knows all this.  This isn't exactly at a nuclear physics level of difficulty.  They can put whatever numbers they want into their models.  They were trying to bail out the banks, and fund the US government through interest rate suppression and retiring government debt through QE.  Their model just provides a bogus justification for their actions.

khakuda's picture

True. Also, since the Federal Reserve couldn't directly raise wages, the only way to get people to spend more was to lower rates so they could borrow more to spend or lower rates and increase wealth through appreciation in the stock and housing markets and hope some would get spent. Neither works anywhere near as well as raising wages.

That said, people are not totally stupid. Many realize that asset values that have increased based on artificially low and manipulated interest rates are also fake and may not be sustained.

WMM II's picture

"A major reason for the FOMC’s overly optimistic forecast for economic growth and its incorrect view of the effectiveness of quantitative easing is the reliance on the so-called “wealth effect”, described as a change in consumer wealth which results in a change in consumer spending."


uhmmm...perhaps they understood that to forecast a 'downer' of an economic forecast would be, say, let's call it, self-fulfilling...

just a guess.



Al Huxley's picture

There's no need to overanalyze the FED's actions and give them the cover of academic respectability (eg they may be wrong but they were trying their best).  The facts are

- the TBTF banks got obscene amounts of bailout money to keep them whole after a bunch of shitty lending went south on them

- they get essentially interest free loans which they can then apply with leverage into the bond and/or equity markets

- there's plenty of evidence that they frequently get insider information that allows them to profit EVEN MORE than they already do

- if they get caught, there's no punishment, there's no longer even any censure from the media

- THE GENERAL PUBLIC doesn't get any of the above

Conclusion - the FED is acting directly, and SOLEY in the interest of the institutions that own and control the FED, with ZERO consideration for the general public, and a faux mea culpa after the fact that 'oops, looks like we accidentally made the rich richer while totally fucking over the country'.


Not that I expect it, but I really hope that someday those cocksuckers finally pay for what they've done.

NoDebt's picture

If you include the Federal Government in the list of "the institutions that own and control the Fed", we're on the same page.

Since 2008 I've been having increasing difficulty drawing the line where TBTF banks end and the Federal Government begins.

I keep waiting for the circumstance where the interests of "banks" diverge from the interests of "government".  Rising interest rates would clearly do that.  Finally put the banks at odds with the government.  Took a while, but I finally realized I'm the one waiting for Godot.  I don't think it's going to happen.  Why?  Because they are different arms of the same entity.

Al Huxley's picture

It's never going to happen voluntarily from the inside - eventually you'd think that the rising powers of the world will pull the plug - of course it will be the general population that suffers then, not the ones at the top of the pyramid, who'll probably be living on private islands purchased with their ill-gotten gains.

NoDebt's picture

Yeah, that's pretty much it.  The circle that defines what's "inside" has been growing dramatically.  "inside" is quickly becoming the only place you can make a buck.  So the line to get "inside" is long and ever-growing.

Private islands, moving to Belize, opening a tax-haven account in the Cook Islands (a personal favorite I have been researching recently).... all wonderful ideas which Simon Black would no doubt approve.  But if the US goes down, I seriously wonder how friendly those types of places would be to US ex-pats when the locals realize that the cavalry is NEVER showing up to defend them.

AdvancingTime's picture

The more and more I study derivatives it now appears the main goal of QE may have been to hold up the underlying value of assets that feed into and support the massive derivative market more than help the economy. QE has up to now stopped an implosion of derivatives and the resulting contagion and shock that would have spread throughout the financial system.

Paul Wilmott from Oxford University estimates the derivatives market at $1.2 quadrillion, to put that in perspective it is about 20 times the size of the world economy. The point of the article below is to call attention to the insanity of derivatives as an instrument or tool to add stability to our financial system. By stacking risk upon risk and transferring it off to another party who may not be able to preform you do not increase stability.


DOGGONE's picture

Just look at these massive deceptions by omission that are done to the people!
The Public Be Suckered


Federal felonies include fraud, which includes false advertising, which includes deception by omission.

DrData02's picture

Quite frankly the middle class has been effectively stripped of almost all of the wealth it had.  What little they may still have they are saving for the next disaster which the local, state, and federal governments are currently designing.

mobydick's picture

Everybody, including blind Freddy, knows that QE is there solely for the benefit of insolvent banks. How insolvent....Neither the  Fed nor the individual banks know what is buried in all this unregulated and unaudited crap they carry 'off balance sheet' i.e how insolvent all these trillion dollar counter parties are?

q99x2's picture

It sounds good to me. Sounds like there will be a 2015 after all.

SAT 800's picture

I disagree with the conclusion about Bond Yields. I believe the Long Bond Yield will increase, and the price of the Instrument decline, through the rest of this year and well into next year.

Sam Spade's picture

Back in November and December, almost every bond "strategist" and his pet rabbit were predicting higher long-term interest rates this year.  Lacy Hunt was a lone voice in the wilderness predicting that rates would likely resume their decline, and he has been nothing but right so far.  There are structureal reasons for why this has happened, as detailed in Lacy's quarterly reports (which, as mentioned above, are free at the Hoisington site).  But the short explanation is that we are the new Japan.

esum's picture

there is a way to grow out of debt..... remove libtards from the government... repatriate offshore funds at zero tax rate... revive the economy .... also cut govt spend, eliminate fraud, downsize govt, eliminate irs, flat tax of 10% and things will rock... but libtards want power and want to keep people down.... and dependent.. selling pie in the sky... 

cowboybob's picture

Hoisington is so naive to say there is no wealth effect. It can found in the first post-Fed speech Ben Bernanke gave in Dubai on March 5 of this year. Not what he said but that he was paid, $250,000 for a forty-minute talk. That compares to his 2013 paycheck of $199,700.


Mitochondriac's picture

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