Quantitative easing 'is good for the rich, bad for the poor'

[dreamdancer 0]

a bailout for the rich...

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As the Bank of England considers unleashing a fresh round of QE, Dhaval Joshi, of BCA Research, argues the approach of creating electronic money pushes up share prices and profits without feeding through to wages.

"The evidence suggests that QE cash ends up overwhelmingly in profits, thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it," Joshi says in a new report.

He points out that real wages – adjusted for inflation – have fallen in both the US and UK, where QE has been a key tool for boosting growth. In Germany, meanwhile, where there has been no quantitative easing, real wages have risen.

As the Bank waded into the financial markets to spend its £200bn of newly created money, mostly on government bonds, the price of many assets, including shares and commodities such as oil, was driven up.

That helped to boost companies' revenues, but Joshi argues that with the labour market remaining weak, employees have had little hope of bidding up their wages. "The shocking thing is, two years into an ostensible recovery, [UK] workers are actually earning less than at the depth of the recession. Real wages and salaries have fallen by £4bn. Profits are up by £11bn. The spoils of the recovery have been shared in the most unequal of ways."

Joshi adds that this also helps to explain why sales of high-end luxury goods have continued to soar, while many consumers have been forced to tighten their belts.

http://www.guardian.co.uk/business/2011/aug/14/quantitative-easing-riots

stay away from moving propellers - they bite
blue skies from thai sky adventures
good solid response-provoking keyboarding

[yarpos 4]

profits get spent eventually and become income for others ... is there a better plan out there ?

regards, Steve
the older I get...the better I was

[rushmc 23]

yes, let things cycle through and make the corrections that are needed

and dreamy is almost correct

qe is a money plan for politicians.
who are getting rich on the tax dollar
Them and their public union buddies

In any event
It will end sooner if the gov gets smaller, stops printing money and gets the heck of all of this

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[kallend 2,148]

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profits get spent eventually and become income for others ... is there a better plan out there ?

For the past year (or more) corporations are sitting on record amounts of cash and NOT spending it.

Since the politicians have been bought and paid for by the rich, why expect any policies that do anything other than favor the rich. The gap between the rich and the rest has widened steadily over the past 30 years.

...

The only sure way to survive a canopy collision is not to have one.

[popsjumper 2]

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Since the politicians have been bought and paid for by the rich, why expect any policies that do anything other than favor the rich. The gap between the rich and the rest has widened steadily over the past 30 years.

Well shoot me now. Kallend posts something I agree with.

In addition, I'd say it goes back farther than just 30 years. My viewpoint says, "Since day 1 with only small bumps in the road".

My reality and yours are quite different.
I think we're all Bozos on this bus.
Falcon5232, SCS8170, SCSA353, POPS9398, DS239

[hwt 0]

About time you woke up...

[DanJohnson 0]

***Since the politicians have been bought and paid for by the rich, why expect any policies that do anything other than favor the rich.

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+1

Now what are we going to do about it?

We can't expect a fair shake through legislation.

Non-violent revolution is our only recourse.

What ever you do don't feed the monster which seeks to enslave you.
Not one thin dime!

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[dreamdancer 0]

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profits get spent eventually and become income for others ... is there a better plan out there ?

yes, quantitative easing for the poor. the poor don't hoard money they spend it. the velocity of money increases and the economy starts to grow from the bottom up...

stay away from moving propellers - they bite
blue skies from thai sky adventures
good solid response-provoking keyboarding

[dreamdancer 0]

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About time you woke up...

about time you grew up

(i'll explain keynes to you while you mature)

stay away from moving propellers - they bite
blue skies from thai sky adventures
good solid response-provoking keyboarding

[yarpos 4]

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profits get spent eventually and become income for others ... is there a better plan out there ?

yes, quantitative easing for the poor. the poor don't hoard money they spend it. the velocity of money increases and the economy starts to grow from the bottom up...

isnt that against the great american , dog eat dog, to bad for you if you cant make it ethos? I imagine the reaction to injecting money at the bottom would be a whole lot of socialist/pinko/commie rants.

the govt did what you are suggesting here when the GFC struck , including cash handouts to the lowest income earners. I'm not sure if there was a real benefit unless you were selling drugs, alcohol and cheap electronics. Still, as you say it got some money churning around when things looked very bleak.

regards, Steve
the older I get...the better I was