Monday, May 6, 2019

Central bank validates that the purpose of money printing was to transfer wealth to the rich

While the circus of Democratic Presidential candidates continue to try to outdo themselves in who would tax (steal) from the rich the most, the saddest part in all of this is that they also continue to defend the very entity that helped make them rich.

Because in a new study published by Netherland's central bank in April of this year, researchers concluded that even going back to the 1920s, the end result of any and all money printing by the world's collective of central banks has been to enrich the top 1%.

Authored by Mehdi El Herradi and AurĂ©lien Leroy, (Working Paper No. 632, De Nederlandsche Bank NV), the paper "examines the distributional implications of monetary policy from a long-run perspective with data spanning a century of modern economic history in 12 advanced economies between 1920 and 2015, ...estimating the dynamic responses of the top 1% income share to a monetary policy shock." 
The authors "exploit the implications of the macroeconomic policy trilemma to identify exogenous variations in monetary conditions." Note: the macroeconomic policy trilemma "states that a country cannot simultaneously achieve free capital mobility, a fixed exchange rate and independent monetary policy".Per authors: 
"The central idea that guided this paper’s argument is that the existing literature considers the distributional effects of monetary policy using data on inequality over a short period of time. However, inequalities tend to vary more in the medium-to-long run. We address this shortcoming by studying how changes in monetary policy stance over a century impacted the income distribution while controlling for the determinants of inequality." 
They find that "loose monetary conditions strongly increase the top one percent’s income and vice versa. In fact, following an expansionary monetary policy shock, the share of national income held by the richest 1 percent increases by approximately 1 to 6 percentage points, according to estimates from the Panel VAR and Local Projections (LP). - Zerohedge
Yet besides ultra wealthy individuals like JP Morgan's Jamie Dimon and the former CEO of Goldman Sachs becoming billionaires following the Fed's introduction of QE money printing after 2008, a recent article even shows that the central banks themselves were transferring wealth to themselves as seen by the fact that the Bank of Japan itself holds so many assets derived from money printing that they are now considered a Top 10 Shareholder in 50% of all public companies.


Sadly, most Americans are ignorant of the warnings given to them by our Founding Fathers, who in the case of Thomas Jefferson foreshadowed this over 250 years ago.


"I believe that banking institutions are more dangerous to our liberties than standing armies,"  Jefferson wrote. "If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around(these banks) will deprive the people of all property until their children wake up homeless on the continent their fathers conquered."

And judging by how many homeless live in wealthy cities like New York, San Francisco, and Seattle, perhaps if the Democrats wanted to actually do something about poverty and wealthy inequality they would simply look inward and realize that it was their legislation passed in 1913 that is the root of this calamity.

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