It’s no secret that the only reason the markets have been roaring – since bottoming out in March 2009, the DOW is up approximately 125% and The S&P 500 approximately 120% – is because of unlimited quantitative easing to the tune of $85 billion a month, a last resort, desperate measure that the FOMC began in 2012 to maintain its ‘growth’ targets. The end result of this program has essentially been the transfer of wealth from Main Street to Wall Street.
“In terms of types of financial wealth, the top one percent of households have 35% of all privately held stock, 64.4% of financial securities, and 62.4% of business equity. The top ten percent have 81% to 94% of stocks, bonds, trust funds, and business equity, and almost 80% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America.”
click to enlarge – source
How this plays out with the ‘government shutdown’ and the fears that we will enter a recession if the U.S. Treasury has to step in to prevent a default was summed up in the opening sentence of the following article: “Dollar Seen as Shutdown Loser as Growth Hit Spurs QE”:
“The first U.S. government shutdown in 17 years is stoking speculation that the longer it lasts, the more likely the Federal Reserve will delay reducing its monetary stimulus program.”
This, in conjunction with the nomination of Janet Yellen as chairman of the Federal Reserve can be considered a one-two punch that guarantees the continuation of flow of funds to Wall Street:
“‘She has extended Bernanke’s view that policy needs to be accommodative for a long period of time in a post-crisis environment.’… Yellen has backed Bernanke’s efforts to boost the economy through three rounds of asset purchases that have swelled the Fed’s balance sheet to $3.66 trillion.”
continued at chycho