{"id":58113,"date":"2021-06-02T08:53:52","date_gmt":"2021-06-02T13:53:52","guid":{"rendered":"https:\/\/olduvai.ca\/?p=58113"},"modified":"2021-06-02T08:53:52","modified_gmt":"2021-06-02T13:53:52","slug":"two-pins-threatening-multiple-asset-bubbles","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=58113","title":{"rendered":"Two Pins Threatening Multiple Asset Bubbles"},"content":{"rendered":"<h3><a href=\"https:\/\/realinvestmentadvice.com\/two-pins-threatening-multiple-asset-bubbles\/\">Two Pins Threatening Multiple Asset Bubbles<\/a><\/h3>\n<div class=\"content\">\n<div class=\"bialty-container\">\n<div class=\"paywall\">\n<blockquote class=\"\"><p><em>\u201cPowell Says Fed Policies \u201c<strong>Absolutely<\/strong>\u201d Don\u2019t Add To Inequality<\/em>\u201d -Bloomberg May 2020<\/p><\/blockquote>\n<p>The headline above is but one of countless times Fed Chairman Powell and his colleagues confidently said their policies do not result in wealth or income inequality. Their political stature and use of complex economic lingo give weight to their opinions in the media. Nevertheless, a deep examination of the Fed\u2019s practices and their consequences leaves us to think otherwise.<\/p>\n<p>In our opinion, the Fed\u2019s contribution to wealth\u00a0<u>inequality<\/u>\u00a0is significant and grossly misunderstood. We have written articles explaining why QE and low interest rates generally benefit the wealthy and harm the poor. This article backs up those prior arguments with quantitative muscle.<\/p>\n<p>Timely for investors, we also draw some lines between wealth inequality and financial stability and their relationship to monetary policy. We think it is becoming increasingly possible wealth inequality, and in particular, the outsized effect inflation has on the poor, could be the needle to pop many asset bubbles. The other possible needle is the Fed\u2019s wanting for financial stability.<\/p>\n<p><em><strong>**<\/strong>Due to the importance of monetary policy from economic, societal, and market perspectives we are breaking this article into two. We will share part two next week.<\/em><\/p>\n<p><strong>Background<\/strong><\/p>\n<p>More inflation and financial stability (rising asset prices) are two of the three core tenets backing monetary policy. A strong labor market is the third objective. We focus on inflation in this article and financial stability in part II.<\/p>\n<p>In our article\u00a0<a href=\"https:\/\/realinvestmentadvice.com\/two-percent-for-the-one-percent\/\">Two Percent for the One Percent<\/a>, we explain why inflation is detrimental to the poor, while rising asset prices (financial stability) primarily benefit the wealthy. The following paragraphs from the article explain:<\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Two Pins Threatening Multiple Asset Bubbles \u201cPowell Says Fed Policies \u201cAbsolutely\u201d Don\u2019t Add To Inequality\u201d -Bloomberg May 2020 The headline above is but one of countless times Fed Chairman Powell and his colleagues confidently said their policies do not result in wealth or income inequality. Their political stature and use of complex economic lingo give [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[37,303,16888,15637,534,15470,3650,869],"class_list":["post-58113","post","type-post","status-publish","format-standard","hentry","category-economics","tag-asset-bubbles","tag-fed","tag-jerome-powell","tag-michael-lebowitz","tag-monetary-policy","tag-real-investment-advice","tag-us-federal-reserve","tag-wealth-inequality"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58113","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=58113"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58113\/revisions"}],"predecessor-version":[{"id":58114,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58113\/revisions\/58114"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=58113"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=58113"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=58113"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}