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Oops! Fed Admits QE Widens Inequality
Once again, the Federal Reserve proves that it’s the last one to know everything that we knew already. Today’s stunning announcement: The Philadelphia Fed admits they (“may have”) made the wealthy wealthier and Main Street poorer.
Oops. Sorry America.
The Philly Fed insists that “redistributing wealth” to the wealthy isn’t the main idea, but just a potential side effect of stimulus that they can’t do much about.
“Monetary policy currently implemented by the Federal Reserve and other major central banks is not intended to benefit one segment of the population at the expense of another by redistributing income and wealth,” …
“However, it is probably impossible to avoid the redistributive consequences of monetary policy”.
We’re shocked. Shocked, we tell you. It turns out that handing out free money, buying worthless assets at face value and allowing a small cabal of private banks the sole right to access your magic free-money window, “may” have given some financial advantages to “one segment of the population”. But that’s just a side effect of saving the “economy”.
Of course, it’s not just the bankers. The 1% also happen to hold vastly more financial assets than the lower 99% — so they may directly benefit from financial asset-inflating monetary policy.
And low income households which live paycheck-to-paycheck are far more exposed to “inflation-sensitive cash”.
It’s great to see the Federal Reserve finally state this possibility publicly, unfortunately it doesn’t mean they’re about to change their minds. In the eyes of the Fed, the ends justify the means. If society as a whole is “better off” then it’s apparently “okay” that the poor are poorer and the rich are richer:
It might be also true that the gain to society’s well-being from stabilizing the overall economy is greater than the loss coming from associated redistributive effects, in which case we could safely focus on the overall effects and ignore the redistributive effects.
How convenient: Focus on the winners, not the losers. Or something like that.
But the rose-colored glasses have only just been donned:
One could also argue that, in the long run, the redistributive consequences of monetary policy might average out. In other words, if the same type of households that tend to gain from monetary policy during economic expansions also tend to lose from monetary policy during recessions, then over time the average effect could be a wash.
Got that? The Fed is suggesting that while the rich “may” get richer during boom times, recessions equalize wealth inequality. So in a perfect world it might all even out.
First, let’s take a moment to note that the Fed just admitted that deflationary forces are wealth equalizers and inflationary forces benefit the rich. That’s noteworthy.
But let’s also note that the Fed’s money printing creates endless artificial booms, and limits recessions. Ergo, the Fed reduces the possibility of equalization and creates a continuous money transfer mechanism from poor to rich – as they note:
…There is a good chance that the redistributive effects do not average out because business cycles are known to be asymmetric —expansions tend to be long and moderate, while recessions tend to be short and sharp.
Exactly. And why are recessions so short? Recessions “tend to be short and sharp” because the entire modus operandi of Federal Reserve policy is to shorten recessions and lengthen expansions.
In other words, the Fed is admitting that it’s core policy thesis which is inherently inflationary makes the rich richer and the middle-class poorer.
But as long as the “economy” is doing better, it’s all good. Right?
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Is it by no accident that all 3 chairs are kikes?
Come on fellow Goy, wake the flock up!
(They see you gentiles as cattle to be exploited!)
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Great, when are they going to admit they are purposefully causing economic terrorism?
They'll blame it on you first.
As long as the "economy" is doing better.
And by "economy" they mean digitized "wealth" on a .01%'ers screen (aka stawks) because poor and middle class people struggling to survive tend to avoid getting suckered into the rigged casino game.
if you were tribe/jew you would be making $7000 per second stealing from goy..............you are losing lots of rothschild script being goy/gay
Get back to cleaning those Kosher toilets, or you'll get no scraps from the Human's table.
Make a million dollars a year? You are RICH right?? Well, in 70,000+ years (if you pay no taxes), you will catch up to Warren Buffet and Bill Gates.
Nah, won't take that long. After it makes its first half million, it can buy a congressman or two. Guaranteed $100mil in 10 years or less.
I make that much now!!! I quit my job and renounced my citizenship. Now the US government pays my way on everything.
The Who - Won't get fooled again.
https://www.youtube.com/watch?v=zYMD_W_r3Fg
Same as the old boss.
Keith Moon was nicknamed "the wildman". As drummers go he was the boss. Only Gene Krupa could compare to Keith Moon. Krupa is my favorite drummer aside from Keith Moon. Krupa was a pothead and Moon liked to drink. Both were wild on drums and powerful in terms of expression. Always thought it was the ultimate drag when Keith Moon went and died on us all. The Who never recuperated from Moon's untimely departure IMHO.
Niel pert is the best ever
Bonham gets my vote...
...but really when your that good, it's all just diversity of greatness....
Most American goys will take offense to your rational comment.
I am disappointed you were down voted. Maybe that is a sort of self fulfilling prophecy?
The drooling Greenspan is great. Made my day.
It's a happy coincidence. Hoocoodanode?
"No one could have seen it coming"...........except of course a few nuts that reside on Zerohedge.....but lets ignore them and concentrate on "saving our banks er....the economy".........hehehehehehehehe
Why exactly is Thomas Piketty being praised for the r>g BS when we all know, and now they are admitting that central banks are the main driver of wealth inequality?
Welfare/warfare States aren't a very good backdrop either.
This is the problem with money printing...you have to overlay the inflation with the tax regime that is in place.
"Bailouts for Wall Street" by definition mean taking from the poor/working "classes" and granting carte blanche to monied interests to in fact "run" the State.
As we can see with ISIS this is a poor way to run a war.
"We make money while you lose the war."
I really do wonder if the intent post 9/11 was ever to win any war actually. Clearly the USA has never been more unsafe and obviously it's hard to blame Missouri let alone Baltimore on "Islam."
I will say this: the market correction in 73 was a really nasty one (40%) just in case folks start coming to believe you can't have a market correction when the Fed is overtly trying to create inflation.
Obviously energy books are inflationary...especially if they occur in your own country.
No it's not impossible at all actually. You could have printed up your debt and distributed the proceeds amongst the washed and the unwashed. Anyone with debt would have to pay that down. Every one else can do what they like. Of course there is the inflation problem but that is coming anyway. And besides your fucking full of shit. Of course you were trying to make the insiders richer. That's why you exist and it's why they are insiders.
Ok, I'm 62 years old making good money working in a unique food business. I only make good money because of my ability to create a product that is also unique and that people are willing to pay good money for.
All day today I see people coming in, spending a shitload of money. I finally ask one of my co-workers what's going on, why are we so busy today? The answer: apparentley the "folks" getting the monthly card have
to wait to the first monday or tuesday before the $ shows up in their government provided accounts. Thanks "folks" I'm glad I can provide you with the money to keep me employed. I'm outta here.
Raise prices. Take it back.
All that brain power and the big plan was Dine and Dash. Makes me sick.
Stimulus: It's better than chemotherapy - it kills the host first!™
“Monetary policy currently implemented by the Federal Reserve and other major central banks is not intended to benefit one segment of the population at the expense of another…
BULLSHIT
Monetary policy is designed to increase the wealth of the shareholders of the FED, IMF, ECB, BIS.
The worlds largest thievery corporation, put on a pedestal and worshiped by the western zio media they also own.
Since they do not produce anything, their wealth comes exclusively from the hard work of their captive subject schmucks.
While power has Americans tied up with equality this, inequality that, PC this, and PC that, the banksters, on behalf of Zion, are robbing the candy store, fixtures, floor buffer and all.
Guillotine the Fed. Audit the heads.
The Amongst must leave.
Liberty is a demand. Tyranny is submission..
While in traffic today I had this thought: Assume most preexisting homes are mortgage free. Now, after some time of the banksters' grift, economic opportunities diminish and prices rise. The banksters then "print" up fiat loans to fund mortgages. The banksters now have real interest in most American homes via fraud and counterfeit.
It's a crime. No, really it is.
I couldn't agree more.
The zio-banksters have had their greedy eyes on American residential property since President Carter and HUD. They have forced mortgage companies to offer shitty loans (mostly to minorities) for over 30 years under threat of discrimination lawsuits.
The housing market is so fraudulent and distorted it's preposterous. The term "stuck on stupid" comes to mind for housing. Have they stopped printing monthly figures like McDonalds?
What? You no like Joooish inspired Niggerdom?
I thought the states already own all the property or the US of A Inc. through their franchise corporations State of $STATE. We get to use the property through grant deeds and legal title but "we the people" own no property in the land of the free.
It is a revolution, but not in the colloquial sense. The middle class is being exterminated for the oligarchs.
Revolutions are effected in two ways, by force and by fraud. Force may be applied either at the time of making the revolution or afterwards. Fraud, again, is of two kinds; for (1) sometimes the citizens are deceived into acquiescing in a change of government, and afterwards they are held in subjection against their will. This was what happened in the case of the Four Hundred, who deceived the people by telling them that the king would provide money for the war against the Lacedaemonians, and, having cheated the people, still endeavored to retain the government. (2) In other cases the people are persuaded at first, and afterwards, by a repetition of the persuasion, their goodwill and allegiance are retained. The revolutions which effect constitutions generally spring from the above-mentioned causes.
- Aristotle; Politics
Fuck the fed. Fuck the bankers. Fuck all of these thieves portrayed as saviors of our "economy."
It's just a coincidence that they, their families, and everyone they associate with gets richer too, I'm sure.
Pretty much why I started using bitcoin. I still prefer the risk of volatility than knowing that my money will be inflated away. Fuck this stupid fiat money.
That's what gold and big bars of silver are for dude. I bet Bitcoin doesn't even exist in 100 years, but only my unborn grandchildren will know for sure.
Bitcoin could be vaporized by tomorrow with an internet killswitch.
Your "internet killswitch" would also vaporize the whole e-commerce sector, most of the financial sector, and probably induce mass panic on a global scale. Unlike many centralized systems Bitcoin can survive an event like this though, and you will be able to continue using it once the internet gets re-established after the nuclear dust has settled.
Also, if they decide not to kill the internet as it's also one of their most important propaganda machines you might just get your piece of the pie if you bet on the right horse. Long PMs, BTC, luxury goods, defense contractors, weapon manufacturers and anything else that profits of global misery really.
ever consider that the internet kill switch, as you note, is a newer version of Mutually Assured Destruction. Just the fact that they could use it (and we can't) confers them control over the mind space. The levers of power, once that control is achieved, will be placed for their advantage under the radar. One day we will wake up, and they will be the editors at ZH.
They will be kicked out of here....there is no doubt.
Treason has gone mainstream.
Now back to your regularly scheduled wanna-be police-state.
OK First: END THE FUCKING FED.
Second: He who spends it first spends it best - otherwise known as the Cantillon Effect, is not a new concept. Assets are captured on the cheap by those privelaged to receive the freshly minted cash first and is effected by an immediate erosion of wealth by the reduced purchasing power of same cash held by others later in the process. The redistribution is apparent and purposeful by design because there is no free lunch - fuckers! In order for the rich to get richer it has to come at the expense of the poor getting poorer - its that simple. The FED knows ex ante exactly what its imposing on the middle class whose nominal wages, all else equal, are frozen. Real wages must fall and it is by this mechanism that the middle class remains enslaved and impoverished - they can never ever get ahead. Worse, savers are punished brutally and as a consequence - will actually SAVE MORE, thus depressing economic activity further which has the added bonus of suppressing labor and its market bargaining power even further as economic demand falls when the nominal prices for everything rise. And this isn't anything new either. Friedman, Phelps, Samuelson and later Lucas demonstrated that what the FED expects to occur from monetary policy in terms of economic activity is never what actually occurs not because people aren't rational, but because the FED holds the people's perception of value constant when they model ex post policy behavior. In other words, they think were fucking stupid.
I often wonder how many times they have to fuck this arrangement up between the people and their money before they figure it out. Economic activity arrives from people exercising their preferences through choices of options available to them relative to their real income. Producers supply based on the availability of resources and the consumer's willingness to pay. Throwing money at the arrangement changes perferences because now, in addition to having to maximize utility subject to price and wage constraints, people now have to take into account the ersosion of their purchasing power when they do not alter behaviour. Under these circumstances, choice becomes infinitely more dynamic and complicated because the inflation interferes with people's intertemporal preferences. INstead of encouraging consumption you encourage savings thus explaining asset price inflation as people seek alternative means of perserving the exchange value of the currency that they hold.
Again. Nothing new here. But the FED behaves as though it is the most novel thing EVER.
END THE FUCKING FED.
nice rant,
anyone new here or to this game should read the above carefully. the details of the game change, but the outcome is the same. they control us until we say stop (or more).
i'll add further that at the level of megabux wealth, its no longer about spendable usable money, its about rationing - not so much more stuff for them, but less for us. you can only waterski behind so many yachts...
its their world, and we've worn out our welcome.
got slavery?
They can't do much about it??? Who are they trying to kid. They are faithful servants of their masters those 3 amigo's. Their dark lord will reward them.
$200,000.00 and above use a credit card 66% of the time. Airline miles baby!
It's for our own good you see. Puke..... .
Fraud, Racketeering, Conflict of Interest, Anti-Trust, Monopolies, Propaganda
Fraud, Racketeering, Conflict of Interest, Anti-Trust, Monopolies, Propaganda
Fraud, Racketeering, Conflict of Interest, Anti-Trust, Monopolies, Propaganda
Fraud, Racketeering, Conflict of Interest, Anti-Trust, Monopolies, Propaganda
Fraud, Racketeering, Conflict of Interest, Anti-Trust, Monopolies, Propaganda
Fraud, Racketeering, Conflict of Interest, Anti-Trust, Monopolies, Propaganda
Fraud, Racketeering, Conflict of Interest, Anti-Trust, Monopolies, Propaganda
Fraud, Racketeering, Conflict of Interest, Anti-Trust, Monopolies, Propaganda
Trickle Down Economy
or
Tricked Down Economy
Any fool can tell you that to make the water flow more is to make the holes bigger below the tank.
Making a larger & larger tank does not help.
But alas comon sense is not so common.
It's not redistributive it's dedistributive.
"But if merchants and manufacturers will not use cheap money, he said, speculators will. They will use cheap money in buying stocks, for the prospect of capital appreciation...."
-- NYTimes, April 12, 1930
THE SOLE PURPOSE OF THE FED IS TO MAKE THE RICH RICHER AND THE POOR POORER.
The Federal Reserve System (and fractional reserve banking) is EVIL!
Abolish the FEDERAL RESERVE!
Admits inequality. Shit, man that's the reason the started QE. Don't be dense.
A slimy bit of disinformation. They must believe if they throw in a truth that is apparent to everyone, they can get away with a lie. Sure, we all know the Fed's policies have caused a more unequal redistribution of wealth at the top, but it's a lie it wasn't done intentionally.
Satan has that picture hanging in his living room.
Is this a Caption Contest? "Spot the Non-Jew in the Picutre"
Serious question... Why the hell do the socialist and egalitarian types support the Federal Reserve? I mean, it does the exact opposite of what they believe!
Because socialists and similar are not really socialists, they're statists. Which means, their only concern is centralization of wealth and power (in their hands).
However, anyone who plans to misdirect wealth and power into their own hands needs some kind of propaganda, some way to convince people to accept their abuse, or better yet, to applaud their abuse.
Offering "free stuff" is one of the most successful ways ever found to convince large numbers of people to make you wealthy and powerful.