Oops! Fed Admits QE Widens Inequality

[Octafish]

by Tyler Durden on 06/10/2015
Via NotQuant.com

Once again, the Federal Reserve proves that it’s the last one to know everything that we knew already. Today’s stunning announcement: The Philadelphia Fed admits they (“may have”) made the wealthy wealthier and Main Street poorer.

Oops. Sorry America.



The Philly Fed insists that “redistributing wealth” to the wealthy isn’t the main idea, but just a potential side effect of stimulus that they can’t do much about.

“Monetary policy currently implemented by the Federal Reserve and other major central banks is not intended to benefit one segment of the population at the expense of another by redistributing income and wealth,” …

“However, it is probably impossible to avoid the redistributive consequences of monetary policy”.

We’re shocked. Shocked, we tell you. It turns out that handing out free money, buying worthless assets at face value and allowing a small cabal of private banks the sole right to access your magic free-money window, “may” have given some financial advantages to “one segment of the population”. But that’s just a side effect of saving the “economy”.

Of course, it’s not just the bankers. The 1% also happen to hold vastly more financial assets than the lower 99% — so they may directly benefit from financial asset-inflating monetary policy.

CONTINUED...

http://www.zerohedge.com/news/2015-06-10/oops-fed-admits-qe-widens-inequality

Thought DUers'd want to know yet another way the rich keep getting richer.

[Warpy]

1. We already knew. After all, it's where the 18,000 Dow came from

because there are only so many places a windfall for the banksters is going to go.

[Octafish]

2. Criminal Science

What a nice racket, finance.

QE is no mere financial Laundromat; it is a full-service loan laundry and downscale resale facility that not only cleans the banks’ balance sheets but also sterilizes the entire operation to prevent it from producing immediate price inflation. It illustrates the way the Fed’s loan laundry and downscale resale facility works:

After the Fed buys (at face value) and resells (at pennies on the dollar) the bad mortgage-backed securities with newly minted electronic digits that it places into the banks’ Federal Reserve accounts, it then sterilizes the entire operation to prevent the new money from transmitting the dread inflation virus. The Fed does so by, in effect, quarantining inside the banking system the new toxic money used to launder the dirty loans. To affect this quarantine, the Fed wields both a carrot and a stick to keep this newly minted digital money from seeping out into the economy through new loans and igniting inflation: It pays the bank interest on its Fed reserves as long as the bank keeps the funds on deposit at the Fed (the carrot); and it tightens reserve requirements by raising the amount of money the bank must keep on deposit at the Federal Reserve (the stick).

-- Lawrence Hunter, Forbes magazine

SOURCE: http://www.washingtonsblog.com/2012/12/quantitative-easing-benefits-the-super-elite-and-hurts-the-little-guy-and-the-american-economy.html

Is beauty, Warpy. Money for nothing and it never gets in the system to trickle down anywhere near the community level, another of those "Mission Accomplished" for the 1-percent.

[nashville_brook]

4. wow, i never thought of it like that, but you're right -- this $$ never

even has the chance of pathetically "trickling down." it just stays in a never-never land.

[Wilms]

3. ^

[PowerToThePeople]

5. Obvious is (not so) Obvious to some. n/t