Record inflows into equities adds more evidence that the middle class has been suckered into the Fed’s rigged casino. Why lose money every day in savings and money market accounts when newbie punters are raking in $250,000 a month playing options on Gamestop?
Alas, the majority of this “wealth” is phantom, as revealed by the chart of tangible (real) / intangible (financial) assets. The Fed’s casino prints trillions of dollars and gives them to the biggest gamblers for free, and so the artificial semblance of free money for everyone who gambles is compelling.
Unfortunately, the Fed’s casino is only rigged to benefit the Fed’s cronies. Everyone else is suckered in to lose whatever they have. The Fed’s cronies have been impatiently waiting for the suckers to surrender their rational risk aversion and flood into the rigged casino to share in the Fed’s limitless wealth machine: the more you risk, the more you win!
But the wealth is illusory. The Fed can create currency out of thin air and give it to its predatory, parasitic cronies, but this isn’t real wealth. Real wealth has to be generated by work and investing in productive assets.
The Fed’s casino isn’t just rigged; it’s criminally unstable. Once the phantom wealth evaporates and returns from whence it came (i.e. thin air), the unfairness of the Fed’s financial system will trigger a Cultural Revolution that the Fed will be helpless to control, for everything the Fed can do will only accelerate the unraveling.
Decades in the making (arguably centuries), it’s within sight now.