How the Federal Reserve is Transferring Wealth From the Middle Class to the Wealthy, by Sam Long and Alexander Synkov.
The Federal Reserve’s recent decision to purchase trillions in corporate debt went underreported on Main Street, but shocked credit markets. …
Altogether the Fed will deploy more than $1.45 trillion in support of investors in leveraged assets — more than double the size of the 2008 Troubled Asset Relief Program, and over $7,000 for each working-age American. That includes $750 billion to purchase recently downgraded junk bonds and bond exchange-traded funds — an unprecedented intervention in the private credit markets.
Pumping trillions of dollars into corporate credit and even high-yield debt will further distort markets already shaped by a decade of easy-money policies. This is no abstract concern. The result will be an acceleration of two economywide transfers of wealth: from the middle class to the affluent and from the cautious to the reckless.
So middle Americans are subsiding corporations and hedge funds to the tune of $7,000 per working adult. Unlike the GFC — when the subsidies were mainly taken out of tax money — this time the money is almost entirely new money created out of thin air.
Whatever happened to one law for all, or economic responsibility? This is just the wealthy and well-connected looting the government with the help of the printing press. We will all pay through currency instability and inflation in due course.
via Robert Wenzel