Mish, when foreign credit is crashing, then you get a currency
crisis and a nasty brew of stagflation.
You had a nice blog on moral hazard. This seems to imply that
the rich benefit from the Fed's policies, but this is not
the case, I think. Inflationary policies always shift
the focus from manufacturing to speculation, which leads to
a destruction of the real economy and real businesses.
Who benefits? Speculators
and Wall Street. Real businesses and business owners actually
suffer. You can see that in the World top rich, who typically are
business owners, not speculators. Short 5 years ago all top 10
rich were Americans. This is no longer the case. The World
richest person is no longer Bill Gates, it's Carlos Slim Helu
from Mexico, and there are only 3 Americans in the top 10 rich.
Blowing bubbles does not benefit the rich. It actually
destroys the real economy, with both the businesses and real
people working for these businesses.
It benefits speculators, employment in speculative sectors,
and leads to a huge unfair
redistribution of wealth, from the real economy to Wall Street
financial economy, until a crisis hits because the real
economy that supports Russ's "fictitious capital" financial
economy no longer
exists. That's exactly what happens during hyperinflationary
depression.
We still have not been able to figure out why M3 is growing
18% with all the collapsing credit mess. |
