4 ms·

What do you mean?

• throwaway2048 9y ago
  The amount of money being pumped into the economy by the federal reserve has done things like supercharge housing prices, because nobody can find a safe place to dump their new money, it all goes into real estate. This jacks up the price of housing for the middle class and poor to a ridiculous degree, to the point that in many markets over 75% (!) of post tax income is being spent on housing. I suspect this is the real reason we aren't seeing inflation from so much money being poured into the economy, all the money of the "have nots" is being sucked away by insane real estate costs, thus the prices of goods that are traditionally tracked by inflation indicators are unable to rise. This is what is meant by the erosive power of monetary policy, in a very real way it is destroying the wealth of everybody but the 1%, because they cant do anything but pour an increasing large share of their earnings into housing costs (which continue to escalate).
  • dnautics 9y ago
    ^^ yep! There's other more ways in which monetary policy siphons this eroded wealth to the rich. Mostly by foisting people and less-than-full-agency aggregation of 99%er wealth (pension fund manangers, etc) into corporate welfare via the stock market (because you need to make a return on investment to preserve wealth in the face of inflation). Another way the linkage between our monetary policy and economic structure creates inequality is by enabling the wealthy to take advantage of leveraged investments schemes (Forex, ETFs, etc) off of low-interest rate sources - the ibanks that fund these sorts of activities have a much more direct access to the federal reserve than you or I. The 'capitalism screws the poor' narrative is so tiresome, not because it is oft repeated, but because it truly misses the structural reasons why the capitalist system we have now screws the poor.