Jesse Felder
@jessefelder
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3h
"Jay Powell will be the co-pilot and the pilot will be Janet Yellen. Because whether its tax redistribution or creating more employment, it has to come through fiscal. Monetary has done virtually everything it can do."
The Fed Is Powerful, Except in Fighting Wealth Inequality
The Covid-19 crisis showed the stark difference between how monetary and fiscal policy can lift the U.S. economy.
“Monetary policy cannot change the distribution of wealth, monetary policy cannot get the stimulus to the right places today — it has to be fiscal,” Rick Rieder, BlackRock’s chief investment officer of global fixed income, told me in an interview. When it comes to steering the economy, “Jay Powell will be the co-pilot and the pilot will be Janet Yellen. Because whether its tax redistribution or creating more employment, it has to come through fiscal. Monetary has done virtually everything it can do.”
https://www.bloomberg.com/opinion/a...powerful-except-in-fighting-wealth-inequality
Why the wealthiest Americans should prepare for ‘a revolt against the unprecedented inequality’
When the top 10%’s bubble pops in 2021, the loss of illusions/delusions of security and wealth will be shattering to all those who believed artifice and illusory ‘wealth’ were real.“
That’s Charles Hugh Smith, previously hailed by CNBC as one of the best alternative financial bloggers on the internet, offering up his unsettling outlook for the coming year.
“Those in America’s top 10% who have reaped virtually all the gains in income and wealth of the past 20 years live in a bubble that they view as unbreakable: no matter what problems arise, their personal income and wealth is secured by the government, central bank, etc,” he said.
In other words, those at the top of the wealth-power pyramid are confident any financial pain will quickly be soothed by the Federal Reserve and its willingness to keep printing money.
While that has, indeed, been mostly true for years now, Smith pointed to the folly in that thinking.
“We cannot print wealth, or borrow it into existence,” he continued. “All we can print/borrow is artifice, phantom representations of illusory ‘wealth’ that will vanish into thin air, in a reverse of how the ‘money’ was created — out of thin air.” This will lead to assets of the elite getting “crushed” without the backstop of liquidity. Stocks, he warned, “will go bidless as phantom wealth dissipates.”
https://www.marketwatch.com/story/a...ed-are-they-11609360165?mod=mw_more_headlines
