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Saturday, April 21, 2012

How the Fed Favors The 1%

I'm shocked. The WSJ is traditionally the mouthpiece for deifying all things BANKSTER but the WSJ actually has a piece explaining how the Federal Reserve works for the exclusive benefit of the 1%.  WSJ links are weird (they don't open for the full article) so to get the full article you have to google "How the Fed Favors The 1%".
A major issue in this year's presidential campaign is the growing disparity between rich and poor, the 1% versus the 99%. While the president's solutions differ from those of his likely Republican opponent, they both ignore a principal source of this growing disparity. The source is not runaway entrepreneurial capitalism, which rewards those who best serve the consumer in product and price. (Would we really want it any other way?) There is another force that has turned a natural divide into a chasm: the Federal Reserve. The relentless expansion of credit by the Fed creates artificial disparities based on political privilege and economic power....The Fed doesn't expand the money supply by uniformly dropping cash from helicopters over the hapless masses. Rather, it directs capital transfers to the largest banks (whether by overpaying them for their financial assets or by lending to them on the cheap), minimizes their borrowing costs, and lowers their reserve requirements. All of these actions result in immediate handouts to the financial elite first, with the hope that they will subsequently unleash this fresh capital onto the unsuspecting markets, raising demand and prices wherever they do.
Read the rest here
Wall Street Journal

Judy Morris,
Blogger, THL
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