"Either [Federal Reserve Chair] Yellen thinks we cannot be trusted with the truth (worrisome), or the Fed is clueless as to how its own policies operate (scarier).
The academic name for the Fed’s current policy is financial repression. But a more apt name would be “Throw granny under the bus,” because the program boils down to taking from savers and fixed-income recipients and transferring that purchasing power to other entities.
The cornerstone element of financial repression is negative real interest rates, of which the Federal Reserve is the prime architect and owner.
From the start of the Fed’s post-crisis intervention through 2013, the total cost of these negative real interest rates was over $750 billion just to savers alone. The loss of income to fixed-income investments (such as bonds held in pensions and money markets) was even larger.
...That loss of income and purchasing power didn’t just vanish.
It was transferred from pocket A to pocket B.
It magically appeared again in record Wall Street banking bonuses, in shrinking government deficits (due to lower than normal interest rates), in rising corporate profits (mainly benefiting the already rich), in record stock buybacks (ditto), and in rising wealth inequality.
...when the Fed buys financial assets with printed money and — by definition — drives up the price of those assets, it cannot then act mystified why the main owners of financial assets have grown wealthier...
...Yellen has created the wealth gap by printing money
In a speech at the Federal Reserve Bank of Boston, Yellen said steady growth in inequality over the past several decades represents the most sustained rise since the 19th century. Living standards for most Americans have been “stagnant,” while those at the very top have enjoyed significant wealth and income gains, she said.
...Yellen listed four factors that can influence economic opportunity: investing in education for young children, making college more affordable, encouraging entrepreneurship and building inheritance.
...She just blamed the victims. According to Yellen, if people are finding themselves getting poorer what they need to do is stop scrimping on their kids, become an entrepreneur and go back in time and have rich parents somehow. This statement of hers calls for pitchforks and torches. Without a shred of decency, she has shifted all blame from the Fed to the victims. How corrupt or morally adrift does someone have to be to blame the victim? In a criminal case this would be used as evidence of sociopathic if not psychopathic behavior...
Yellen did not address in her prepared text whether the Fed has contributed to inequality.
...In a more evolved society than ours, Yellen would have been immediately booted from the stage, and the president would already be asking for her resignation. Sadly, she remains safely in charge, and utterly tone deaf.
We don’t need more lectures from her on our perceived failures to spend enough on our kids, have enough entrepreneurial talent, or have rich parents. What we need is a return to the level playing field that originally made this country great."