Yellen Wealth Inequality, Liar or Clueless? Janet Yellen, Chairperson of the US Federal Reserve, has been warning about inequality for a while, telling Congress in February and in May that it was a “disturbing” trend – and that inequality tends to foster even more inequality. She goes on to say that rising inequality risked doing serious harm to the overall strength of the US economy.
Yellen surely understands central banking and the banking system in great detail. She is not a novice. She surely understands that if you create easy money and give it to the elite few, just on a mathematical basis, this obviously will create even more wealth inequality – click here for more detail. She herself said that the wealthiest 5 percent of Americans own two-thirds of all stocks, bonds, mutual funds and other such financial assets – and the trend is accelerating.
So I scratch my head on her comments. Has it not dawned on her that it is her own policies that is causing this phenomenon? We know all too well, that the Fed can make economies and markets move at even the remotest of comments. Instead, Yellen suggested a handful of possible solutions, including early childhood education, making college cheaper and helping entrepreneurs. Of course, these items are insulting to our intelligence and peanuts, compared to what the banking system does to create wealth inequality. So I ask the question again, is she just a liar or clueless?
One of my faults is that I assume intelligence of people too often. I suppose I believe, that she believes that she is doing good. Perhaps I am wrong on this and she really is diabolical. I believe she is just clueless. She is in her own central bank bubble and can’t bring herself to say the obvious. To change her thinking would be too radical, so she ignores this possibility in her mind. Like a lot of people, she is in denial.
The change to a more fair and just system would upset the world as we know it. Besides if she tried, she would be out in a heartbeat. Perhaps she justifies this willful ignorance, by thinking that perhaps even though the system is bad, perhaps at least she can make it a little bit better, by playing the game. This is no different than politicians or even other endeavours. As a politician, you start by thinking you want to do good for the people. You then get caught up in the game, and then become what you set out to defeat – justifying your actions thinking that you can perhaps do a little good by playing the game. But is this any less diabolical?
Denial is a real mind game. As traders we know this very well. The chart is bearish, but we hang on to the long losing position in denial. Central banks are the problem with; ever increasing credit, creating wealth inequality mathematically, destabilizing the economy to its eventual crash. Are you in denial?
Blue Point Trading, William Thompson