The Feedback Loop Between The Fed & The Elite

There is a belief the stock market is “making everyone rich.” The reality is that only a small percentage of the economy owning the majority of stocks. Such is the result of years of profligate monetary policy that created a feedback loop between the Fed and the elite.

Over the last decade, the “wealth gap” continues to widen. In 2019, the Peter G Peterson Foundation poll revealed a statistic we suspected for quite some time. To wit:

A poll of likely voters for the Financial Times and the Peter G Peterson Foundation found 61-percent of Americans said stock market movements had little or no effect on their financial well-being. 

Another article by the Economic Policy Institute also revealed the increasingly inadequate retirement savings of Americans and the dispersion of wealth among income earners.

(Click on image to enlarge)

Feedback Loop Fed Elite, #MacroView: The Feedback Loop Between The Fed & The Elite.

Most recently, in December 2020, Visual Capitalist notedwhen it comes to finances, the rich fared the best during the economic shutdown. 

Feedback Loop Fed Elite, #MacroView: The Feedback Loop Between The Fed & The Elite.

Between the March “pandemic” low and December of 2020, American billionaires grew their wealth by 57% on average.

Feedback Loop Fed Elite, #MacroView: The Feedback Loop Between The Fed & The Elite.

Unfortunately, the bottom 99% of the population didn’t fare nearly as well.

 

More Evidence Of The Loop

The New York Times recently went further into the numbers:

“America’s economy has almost doubled in size over the last four decades, but broad measures of the nation’s economic health conceal the unequal distribution of gains. A small portion of the population has pocketed most of the new wealth, and the coronavirus pandemic is laying bare the consequences of the unequal distribution of prosperity.”

Of course, a significant contributor to the “wealth gap” was the rise in the stock market fostered by trillions of liquidity injected by the Federal Reserve. As NYT noted:

“The affluent, of course, do tend to own stock, and the median net worth of the richest 10 percent of households rose 13 percent from 2007 to 2016 (the last year for which the Fed has released data).

Feedback Loop Fed Elite, #MacroView: The Feedback Loop Between The Fed & The Elite.

Another way to view this issue is by looking at household net worth growth between the top 10% and everyone else.

“Wealth disparities have widened over time. In 1989, the bottom 90 percent of the U.S. population held 33 percent of all wealth. By 2016, the bottom 90 percent of the population held only 23 percent of the wealth. The wealth share of the top 1 percent increased from about 30 percent to about 40 percent over the same period.” – Equitable Growth

1 2 3 4
View single page >> |

Disclaimer: Click here to read the full disclaimer. 

How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.