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Blame Bernanke on inequality in US January 28, 2014

Posted by hslu in Economics, Health Insurance, jobs, Obama, Obamacare, Politics, stocks, Taiwan.
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Bernanke’s QEs did little to stimulate the US economy. He added $3.2 trillion to Fed’s balance sheet which grew the US economy ~2.2% per annum since 2009; a little better than inflation. U6 dropped from ~17% to ~14%. Millions of people got out of the labor market. They moved from the unemployment line to the food stamp line.

So what happen to that $3.2 trillion? Some returned to the Fed and earned 0.25% risk free for the dealer banks. The rest of that hot money pumped up stock markets all over the world and housing markets in many cities in the US.

US stock market went up 175% since the 2009 low. It was up about 30% in 2013 alone.

Housing prices in Las Vegas, Phoenix, SF, San Jose, Miami, etc., have gone up by double digits for a few years in a row.

Let me ask you this:

Who benefited from the $3.2 trillion?

The rich guys. They owns most of the stocks.

Gates made $6 billion in 2013 alone and he was worth $67 billion in 2013. Buffett made $7.5 billion in 2013 and was worth $53.5 billion in 2013. Others such as hedge fund managers and Wall Street investment bankers also made millions of dollars since 2009.

Who got rich from the Booming housing markets?

The rich guys. Again.

Millions of former home owners are renters in 2013 and will remain so in 2014. The homes they used to own went back to banks. Banks sold these foreclosed homes to individual investors and hedge funds who borrowed from banks at ultra low interest rates thanks to Bernanke’s QEs.

This outcome doesn’t come from the left field. It was by design.

Bernanke engineered the largest wealth transfer in America’s history: he robbed from the poor and the middle class and handed them over to the rich; people who own most of the stocks and big  houses.

In other words, the gap between the rich and everyone elso got bigger thanks to Bernanke. And he is washing his hands and leave the mess, or 爛攤子, to the next chairman.

This is inequality that everyone from the US to Europe to Taiwan is talking about.

Bernanke wanted A trickle down economy. It didn’t happen. The poor got poorer and the rich got richer.

Everybody knows that the mostbdirect and efficient way to narrow the inequality gap is to engineer a crush of DJIA and bring down the runaway housing market.

That’s govrrnment’s job and Obama is good at it.

He started Obamacare. Health insurance companies will lose money because they canceled millions of policies because they didn’t meet Obamacare’s requirements. In return, they got the old and the sick instead. Unsurance companies are in trouble.

He raised salaries of millions of contract workers to the federal government. Companies which hired these people will make less. Companies who don’t work for the federal government will feel the wage pressure and wages will perk up in time. Companies will make kess.

He’ll probably use his pen to sign an executive order or some kind of  regulation (his words, not mine) to raise the minimum wage. Democrat controlled governments will follow Obama and some (DC) have done it already. Businesses all over the US will see their margin squeezed. Some will hire less. Few will close. Economy will suffer and stock market will come down because earnings will suffer.

What follows next will be the housing market because one who doesn’t have a job will not buy any house.

That’s wealth transfer in reverse direction.

Well, there we go again.

What government gives you, government will take it away. The rich can move their money to foreign countries, look for loopholes or change their investment to avoid IRS’s knife. They have wealth managers who do nothing but that.

The middle class is stuck. They will always be the loyal servants to the 47% until they become one of the 47%.

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