After one of my cynical posts finger pointing at a Fed talking head (in this case Janet Yellen) and answering her absolutely flawed rationalizations for the masses line by line, a financial blogger informed me this morning that the theme is picked up by the New York Times with an article written by former M&A banker William Cohan.
How Quantitative Easing Contributed to the Nation’s Inequality Problem –NY Times
This is good. The MSM is highlighting something very real and in my opinion, quite evil (there, I said it). But let’s clean up NYT’s theme a little bit too, just as we did Yellen’s outrageous remarks.
Quantitative easing adds to the problem of income inequality by making the rich richer and the poor poorer. By intentionally driving down interest rates to low levels, it allows people who can get access to cheap money on a regular basis to benefit in extraordinary ways.
QE, at least theoretically and on a surface level in a debt-based economy/society helps the little guy because he is borrowing on the long end and QE buys up his distressed MBA and provides him loans at lower long-term interest rates. It is in ZIRP (zero Fed Funds) that he gets screwed because while the banks get a ‘can’t lose’ profit motive, peoples’ ability and inclination to save are all but destroyed, or better yet effectively outlawed by policy.
The rest of the article goes on to illustrate just how rigged this game is and how we have changed nothing in the 1.4 decades since Alan Greenspan kick started the Age of ‘Inflation onDemand’©, where every problem has a financial solution and the rich get massively richer and the majority get screwed… every step of the way.