Economics is based on human behavior. ‘One of the central tenets of economics is that people want certain things and will change their behavior to get those things – in other words, people will respond to incentives.’
Applying this to the FED’s policies, and ramifications, should then yield logical connections between the results of the FED’s policies, and their intentions in implementing them, then, right?
Stated differently, the FED intends the consequences of their actions, correct?
If the consequences are unintended, then, it means that the FED’s actions were lacking intellectual rigor, meaning they stupidly did not consider the outcome before acting. Or, nefariously, instead, the FED’s claim that the consequences were not intended is but a lie, as the reality is that the FED intended that which occurred all along.
So, with this backdrop, let’s look at some consequences of the FED easy money, in a way that exposes the FED as a corrupt organization hell bent on saving the too big to fail banks at all costs.
The FED’s easy money policies have given those with first access to the money enormous sums of paper fiat, which has in turn driven up asset prices, boosted the stock market, allowed big corporations to buy back their own shares, artificially boosting price and giving those corporate big wigs outsized bonus payments and stock option windfalls. This reality of artificially boosting stock prices has not worked to stimulate the economy, but instead has only created a larger gap between the haves and the have nots.
This post was published at TF Metals Report on July 9, 2016.