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Piketty mainly talks of capitalism itself creating this inequality. But right or wrong the Fed does augment those possibilities.
What the Fed is doing has absolutely nothing to do with capitalism. My point was more to the damage that is being done to the country.
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But take the other side of the Feds mandates.
Who benefits from more unemployment and higher interest rates?
Raise the rates. What is going to happen? People are going to go out and make the purchases they have been putting off. Houses, cars, etc.......Will this be good for the economy?
When we had the crash and the crushing of interest rates many retiree's had to go back to work because they were making nothing off their savings. Raise rates and they once again start paying the bills off their savings and retire again opening up jobs for others.
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The rich can still make out there, but the middle class do even worse. Their fixed income may fly better, but housing the center of middle class wealth languishes.
For the majority of the country housing moved very little. It was just in pockets that housing fell dramatically. Those markets were in a bubble and the collapse was a good thing and should have been left alone.
I am referring to the arguments about the market crashing as soon as QE ending is even hinted. The hint came about this time last year, and now the QE is completely ended, and yet the markets have gained 1300 points.
2) In the 2014 midterm election, the GOP (generally seen as more economic growth-friendly) took the Senate and several traditionally Democratic state governorships.
The BIG takeaway is that by and large the gold bugs did not understand QE beyond 'printing money'.
QE helped/helps the middle class too with housing costs. And with their stocks/401k.
Helped with housing costs? Not so much. But QE DEFINITELY helped the middle class because their union pensions and individual 401Ks/IRAs are all invested in stocks. QE propped up the stock market.
Helped with housing costs? Not so much. But QE DEFINITELY helped the middle class because their union pensions and individual 401Ks/IRAs are all invested in stocks. QE propped up the stock market.
401K's are intended to be a slow gradual thing. Not all at once.
What the Fed is doing has absolutely nothing to do with capitalism. My point was more to the damage that is being done to the country.
Raise the rates. What is going to happen? People are going to go out and make the purchases they have been putting off. Houses, cars, etc.......Will this be good for the economy?
When we had the crash and the crushing of interest rates many retiree's had to go back to work because they were making nothing off their savings. Raise rates and they once again start paying the bills off their savings and retire again opening up jobs for others.
For the majority of the country housing moved very little. It was just in pockets that housing fell dramatically. Those markets were in a bubble and the collapse was a good thing and should have been left alone.
The Feds actions by and large support capitalism. Low rates means I can borrow and expand my business easier. Low rates mean I can buy a house, and housing supports a huge amount of capitalism as it supports our economy.
Lower unemployment is good for capitalism. More employed means more self-paying consumers, and more spending then begets more business.
Lower rates encourage more borrowing and spending. Higher rates the opposite.
Seniors are indeed hurt through reduced fixed income. But we guarantee them SS and Medicare. And that is worth about $2K/mo to them.
$250K @ 10% = $2K/mo. And those are actually outrageous or very risky returns.
Helped with housing costs? Not so much. But QE DEFINITELY helped the middle class because their union pensions and individual 401Ks/IRAs are all invested in stocks. QE propped up the stock market.
Low interest rates are a prime inciter and mover of housing sales.
Few people bought houses in 1980 when mortgage rates hit 14%.
The Feds actions by and large support capitalism. Low rates means I can borrow and expand my business easier. Low rates mean I can buy a house, and housing supports a huge amount of capitalism as it supports our economy.
When I bought my first house the interest rate was 9.9%
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Lower unemployment is good for capitalism. More employed means more self-paying consumers, and more spending then begets more business.
I noted how one can do things right and lower unemployment. You did not address that.
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Lower rates encourage more borrowing and spending. Higher rates the opposite.
Lower rates are at record lows and few are borrowing and spending.
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Seniors are indeed hurt through reduced fixed income. But we guarantee them SS and Medicare. And that is worth about $2K/mo to them.
You don't guarantee them squat, they paid for that. They can't spend Medicare. If they use it, it also takes from their savings.
Low interest rates are a prime inciter and mover of housing sales.
Few people bought houses in 1980 when mortgage rates hit 14%.
I know, I was there!
I did and had a 16.5% interest rate.
Exclusive of property taxes, I could buy the same house today and have a substantially lower monthly P&I Payment than I had 30+ years ago.
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