Hi mindmeld; Re: "As for the rich benefitting from QE the most, there can be no doubt. It is a well documented fact. Consider the transmission mechanism that Bernanke explained to us in detail. He said QE would increase the price of stocks, making Americans feel wealthier so they'd spend more money. Well the top 1% own the majority of stocks and investments of all kinds in this country. So when those transmission mechanisms are used for monetary policy, the 1% benefit most. I know, because the last few years have been uncommonly good to me, ...";
I agree with the above, almost entirely. My only disagreement is that, over the long term, QE will cause inflation and that will most certainly *not* benefit the 1%. The reason the 1% are doing well now is because interest rate are low which causes asset prices to be high and the rich own the assets. But those low interest rates are not a permanent thing. Eventually the economy will recover, inflation will return, interest rates will rise, and asset prices will tumble. And since the 1% own the assets, their wealth will decrease.
Re: "... while the 99% are watching their wages stagnate ...";
Why do you bring this up? You've already agreed that wages stagnate during depressions. We're in a depression. Wages stagnate. This has nothing to do with QE. You might as well have said "... while the sun continues to rise in the morning ..."
Re: "... and their expenses and inflation rise.";
As I showed in the previous response, the usual indicators of inflation, climbing gold and silver prices, just aren't there. You can pick and choose various indicators and in any (non socialist) economy, things will be going up and down. But at the moment, the majority of investors apparently disagree with you. If they start agreeing with you, they'll run gold up. Right now I see very little interest in gold. And I do believe this will change. But it isn't changing now.
Your policy is the right one, but at the wrong time. Give it another 10 years. It will be the right time to do tight money. And I've little doubt that the Fed will be doing tight money then.
-- Carl |
