We have talked about this before, but it’s worth taking another look.
- Sixty-two people have the same amount of wealth as half the world
- Oxfam says wealth of richest 1% equal to other 99%
And while most people will never get it, we have only the FED to blame for this wealth disparity. When the wealthy have access to zero or negative rate financing on a massive scale, that is exactly what you get. I will simply repeat what I have said here before.
First, this stagnates the economy. The accumulated wealth held by so very few people is not being properly allocated to benefit the overall economy. For the most part, it just sits there accumulating interest. Second, it creates social unrest. If history teaches us anything, eventually, this type of a “social setup” leads to revolutions or worst, wars.
And there lies the problem with the overall US Economy and the upcoming severe recession of 2015-2017. Those who study finance or financial markets know that there are no free lunches. Sooner or later you have to pay the piper for financial misdeeds and capital missallocation. No economy can grow over an extended period of time when only the top 1-20% of the population benefits…..again, thanks to the misguided FED policies. And while the top 20% are enjoying their rewards for the time being, the upcoming bear market of will impact them the most (unless they go short at the right time).
I think I smell another bailout in the future.
