There is only one way to end the financial tyranny of the Federal Reserve–abolish it, and put an end to the predatory pathologies of its policies.
The Federal Reserve has failed not just the nation and the U.S. economy, but more importantly, the American people that it supposedly serves. It has also failed the world, by showing other central banks that they can reward private banks and top .01% with absolute impunity.
The secondary publicly stated goal was to spark a rally in stocks, bonds and real estate that would spark a wealth effect: as households saw their net worth rise, they would feel wealthier and thus more likely to buy goods and services they didn’t need on credit.The supposed goal of the Fed’s zero-interest rate policy (ZIRP) and quantitative easing (QE) was to make borrowing easier for both corporations and consumers, the idea being companies would borrow to invest in new productive capacity and consumers would buy the new goods and services being produced with cheap credit.
The real reason for ZIRP and QE was to rebuild the balance sheets and profits of banks on the backs of savers who have earned near-zero thanks to the Fed’s manipulation of markets. But setting aside the obvious success of the Fed’s real goals–enriching the banks and the super-wealthy who have access to near-zero interest credit–let’s see what corporations did with the Fed’s nearly-free money.
Did they invest in new productive capacity? No, they bought back their own stocks–trillions of dollars worth, to boost stock prices and managerial bonuses. Note what happened when the last stock buyback binge faded: stocks crashed.
The great stock buyback binge (Fortune.com)
The Fed’s free money for financiers enriched the top layer of corporate management and the top 1% who own most of the nation’s equities. You can read the details here: Factset Buyback Quarterly.
The other group of financiers with access to the Fed’s free money for financiers has been private equity. So did the private equity multi-millionaires borrow the Fed’s largesse to build new plant and hire new employees? Did they invest the borrowed billions in productive startups?
