Goldman Sachs, JPMorgan, and BlackRock Financial Management are stacking up wealth like never before, thanks to the Great Recession 2.0, a.k.a. the Second Great Depression. Yet, the Fed maintains its recovery plans do not create wealth disparity.
Fed-hawk Ron Paul wrote this week,
Federal Reserve Chair Jerome Powell and San Francisco Fed President Mary Daly both recently denied that the Federal Reserve’s policies create economic inequality. Unfortunately for Powell, Daly, and other Fed promoters, a cursory look at the Fed’s operations shows that the central bank is the leading cause of economic inequality….
When the Fed decides to pump money into the economy, it does so by putting it in the pockets of wealthy, and oftentimes politically-connected, investors who are able to spend the new money before the Fed’s actions result in widespread inflation.
At no time have we seen more clearly how that works than in this week’s second-quarter corporate reports from major US banks. The oligarchs are actually prospering while Rome burns.
MarketWatch reports that major banks have been hauling in more dough than bakers can even dream of.
Goldman Sucks, the vampire squid during the last financial crisis, hit the mother load, reporting a 41% rush in second-quarter revenue to $13.3 billion from a year ago. Was it because the economy isn’t hurting them? No, it was hurting them (and other banks) in terms of what we might call more pedestrian or old-fashion activities like making money off mortgages and car payments.
They struck gold because their father, the Fed, knows how to print money and essentially gave lots of it to them! Much of it comes by way of a pass-through in which they use the Fed’s free or practically free money to help other corporations, obtaining rich fees for doing so; but some of it was just direct gains in cash from bonds they issued then sold directly to the Fed.
The Fed so thoroughly believes that all support for the average person has to come through the banks that it saved the banks before they could even start to fail. You could call that failsafe or preventative FedMed, or you could call it making sure the oligarchs in our economy get vastly wealthier while everyone else becomes poorer.
As Ron Paul said, the Fed is the leading cause of economic inequality.
Read the rest here: https://thegreatrecession.info/blog/goldmans-stacks-of-gold/