Fw: Only America’s Top 10% Benefited from Fed’s QE/ZIRP

[ray southwell]

On Saturday, March 21, 2015 7:47 AM, National Inflation Association <edi...@inflation.us> wrote:

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Americans with average income in the Top 10% of US income earners, have benefited big in recent years from the Federal Reserve’s first three rounds of quantitative easing (QE) as well as the Fed’s 0% interest rate policy (ZIRP), which has kept the Fed Funds Rate target at 0%-0.25% for an extremely dangerous six consecutive years! Unfortunately, this phony/fake prosperity for a selected “elite” few has come at the expense of the Bottom 90% of US income earners!

 

Back in 1970, the Top 10% earned Average Real US Income (CPI adjusted using USD purchasing power from 2013) of $139,230. Over the following 43 years, the Average Real US Income of America’s Top 10% increased by a stunning 77.67% to $247,370! This caused the Top 10% to increase their share of total US income from 31.51% in 1970 to a near record high in 2013 of 47.01%.

 

Back in 1970, the Bottom 90% earned Average Real US Income of $33,620. Over the following 43 years, the Average Real US Income of America’s Bottom 90% made a dramatic decline of 7.85% to $30,980! This caused the Bottom 90% to decrease their share of total US income from 68.49% in 1970 to a near record low in 2013 of 52.99%.

 

Amazingly, the absolute wealthiest Americans in the Top 1%, have benefited much more from the Fed’s QE/ZIRP than the remainder of the Top 10%! Back in 1970, the Top 1% earned Average Real US Income of $344,790. Over the following 43 years, the Average Real US Income of America’s Top 1% increased by a stunning 167.71% to $923,040! This caused the Top 1% to increase their share of total US income by an incredible 2.25X from only 7.8% in 1970 to a shocking 17.54% in 2013!

 

Since 1970, the average real income for America’s Top 1% has grown 167.71% vs. the average real income for America’s Top 10% growing 77.67%. Unfortunately, the average real income for the remaining 90% of Americans has declined 7.85%!

 

Check out NIA's brand new must see charts showing the data discussed above: http://inflation.us/only-americas-top-10-benefited-from-feds-qezirp/

 
It should come as no surprise that US consumer price inflation has remained relatively tame compared to US asset price inflation. When the Top 10% gain access to the Fed’s massive monetary inflation, their spending habits for most consumer goods/services remain unchanged – while they focus on ramping up leverage to aggressively speculate in the stock and housing markets! This creates major asset bubbles, but once these asset bubbles peak and investors cash out/take profits – asset price inflation finally begins to transform into consumer price inflation, which fuels wage inflation – and causes consumer price inflation to begin spiraling out of control. This forces central banks to significantly raise interest rates to levels that are well above consumer price inflation, before the world loses confidence in the currency – thereby creating a currency crisis and possible hyperinflation.

 

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