Everyone now knows that the only meaningful goal of Fed policy is propping up the world’s greatest credit-asset bubble
With this firmly in mind, here is an unedited photo of Federal Reserve Chair Jay Powell and former Fed Chairs Janet Yellen and Ben Bernanke from their recent unprecedented appearance on 60 Minutes:
The purpose of the Fed chiefs’ dog-and-pony show was to promote the notion that the Fed really really really (try not to laugh out loud) “cares” about the average American, even though 85% of the $30 trillion in gains generated by the Fed’s policies flowed to the top 10% and roughly two-thirds of the gains flowed to the top few percent.
The bottom 80% got essentially nothing except a drastic reduction in the purchasing power of their stagnating wages. If this is how the Fed “cares” about average Americans, I wonder what they’d do if they chose to impoverish average Americans. Oh wait a minute, they already did. I’ve covered this in recent essays: The Fed’s “Wealth Effect” Has Enriched the Haves at the Expense of the YoungWhat Killed the Middle Class?It’s All About Who Reaps the Gains (Asset Bubbles) and Who Eats the Losses (Stagnating Wages)
The Fed is now trapped by three dynamics: 1. It has been neutered by the stock market–nobody believes the Fed is “independent” or that it “cares” about anything but the market and the financial aristocracy who own it. 2. It can’t force people to borrow and spend or lenders to lend to poor credit risks. 3. It is finally being recognized as the key driver of widening wealth and income inequality.
Some may claim the December stock market swoon “tutored” the Fed, but it was actually neutered: Fed credibility is a bad joke as everyone now knows the Fed is the stock market’s slave. And since the top 10% own the vast majority of stocks, the Fed is the slave of the financial aristocracy.
Everything else is fancy footwork,
Any questions about why the Fed is politically trapped? How much more of this will the American public be able to stomach before a populist from the left or right or heck, even the center, publicly call out the Fed’s backstopping of the stock market as the driver of soaring wealth-income inequality and demands the Fed be stripped of its power to protect and reward the banks, financiers and the super-wealthy?
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