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Money Printing *Boosts* Financial Industry Compensation
DISCLAIMER:
This is very abstract and difficult to understand.
Nothing has been dumbed down so that someone with an IQ of 100 can understand it.
Money Printing *Boosts* Financial Industry Compensation
DISCLAIMER:
This is very abstract and difficult to understand.
Nothing has been dumbed down so that someone with an IQ of 100 can understand it.
Money Printing Causes Inflation
From 1970 - 2020, the Money Printing the US Government (Federal Reserve) has done caused high inflation rates.
From 1970 - 2020, the Money Printing the US Government (Federal Reserve) has done caused high inflation rates.
Don't trust the CPI or the official estimates of inflation; the US Government is (official sources are) intentionally lying downward about the true rate of inflation.
From 1980 - 2020, **The US Government has been lying, downward, about what the true rate of inflation is**
From 1980 - 2020, **The US Government has been lying, downward, about what the true rate of inflation is**
The Money Printing done in recent decades has caused high inflation **and the inflation has disproportionately gone into real estate**.
This is why in 2020 housing prices are so shockingly high.
This is why in 2020 housing prices are so shockingly high.
Inflation from 1998 - 2018, was **way higher than what the CPI would suggest it is**
Financiers benefit from Money Printing, because Money Printing Causes Wages in The Financial Industry to Rise.
How does Money Printing Cause Wages in Financial Industry to Rise?
How does Money Printing Cause Wages in Financial Industry to Rise?
Money Printing causes Inflation and from 1970 - 2020 in America the Inflation has gone into Assets; Real Estate and Equities, most notably.
Money Printing has caused Asset Prices to be Very High, and **High Asset Prices Means Greater Revenue For Financial Institutions** since the business business model of many Financial Institutions is to charge a fee for being the middle man on financial transactions....
High Asset Prices means that Financial Transactions become larger (generally speaking), and Financial Transactions being larger means higher fees for financial institutions.....
More revenue (via fees) for financial institutions means greater profits for the institutions, and greater demand for labor within those institutions (higher wages for the workers employed there as financiers).
REAL WORLD CONSEQUENCES:
-Money Printing Causes Inflation
-Inflation Disproportionately Hits Asset Prices (Higher Real Estate Prices, Higher Equity Valuations)
-Higher Asset Prices Means Financial Transactions Are Larger
-Money Printing Causes Inflation
-Inflation Disproportionately Hits Asset Prices (Higher Real Estate Prices, Higher Equity Valuations)
-Higher Asset Prices Means Financial Transactions Are Larger
-Financial Transactions Being Larger Means Bigger Fees (More Revenue) For Financial Institutions
-More Revenue For Financial Institutions Means Greater Profits For Them
-Greater Profits For Financial Institutions Means Greater Demand For Labor In The Financial Industry...
-More Revenue For Financial Institutions Means Greater Profits For Them
-Greater Profits For Financial Institutions Means Greater Demand For Labor In The Financial Industry...
-Which Means Higher Wages For Employees Of Financial Institutions (Financiers)
REAL WORLD EXAMPLES:
Mortgage Bankers:
Mortgage Bankers are paid fees to originate mortgage loans (someone borrowed money to buy a house, or some piece of real estate).
When Housing/Real Estate prices are high, mortgage loans are bigger, and the fees paid to mortgage bankers are bigger.
Mortgage Bankers are paid fees to originate mortgage loans (someone borrowed money to buy a house, or some piece of real estate).
When Housing/Real Estate prices are high, mortgage loans are bigger, and the fees paid to mortgage bankers are bigger.
Commercial Bankers:
Similar story as 'Mortgage Bankers'.
Commercial Bankers are paid fees to originate business loans (someone borrowed money to start a business, or expand an already existing business).
Similar story as 'Mortgage Bankers'.
Commercial Bankers are paid fees to originate business loans (someone borrowed money to start a business, or expand an already existing business).
The main thing a businessman does with the borrowed money (capital) is buy 'Plant, Property, & Equipment' (PP&E).
Money Printing making Asset Prices Higher, means the prices of PP&E are higher.
Money Printing making Asset Prices Higher, means the prices of PP&E are higher.
As such, businessmen need to borrow more money/capital to get the necessary PP&E, and thereby the loans originated by Commercial Bankers are bigger.
Bigger loans means bigger origination fees paid to Commercial Bankers.
Bigger loans means bigger origination fees paid to Commercial Bankers.
Investment Bankers:
Investment Bankers are paid fees for being the middle-men on the financial transactions big businesses need (Mergers & Acquisitions, Equity Issuances, Debt/Bond Issuances).
Investment Bankers are paid fees for being the middle-men on the financial transactions big businesses need (Mergers & Acquisitions, Equity Issuances, Debt/Bond Issuances).
Money Printing Causing High Asset Prices, means that the valuations of big businesses are bigger.
Valuations being bigger, means the financial transactions investment bankers serve as the middle-men on are bigger, and bigger financial transactions means bigger fees for said investment bankers.
TLDR:
Money Printing Causes Inflation
Inflations Disproportionately Hits Assets (Real Estate, Equities)
Money Printing Causes Inflation
Inflations Disproportionately Hits Assets (Real Estate, Equities)
Asset Prices Being High Means 'Financial Transactions' Are Bigger
Financial Transactions Being Bigger Means Larger Fees For Financial Institutions, and Higher Wages For Their Employees (Financiers).
Financial Transactions Being Bigger Means Larger Fees For Financial Institutions, and Higher Wages For Their Employees (Financiers).
Money Printing not only benefits the tiny number of individuals and large corporations handed the freshly printed money...
it also benefits everyone who works in the financial industry, since it makes the fee revenue of the institutions that employe them bigger.
it also benefits everyone who works in the financial industry, since it makes the fee revenue of the institutions that employe them bigger.
Money Printing HARMS everyone who holds Cash.
100% of people in any given country hold cash, but Rich People disproportionately have their wealth sitting in Assets which will rise when the Money Printing Causes Inflation.
100% of people in any given country hold cash, but Rich People disproportionately have their wealth sitting in Assets which will rise when the Money Printing Causes Inflation.
Poor People on the other hand do *NOT* have a significant percentage of their wealth sitting in Assets; most Poor People have most or all their wealth sitting in the form of Cash.
As such, when Money Printing Causes Inflation
The Rich are shielded from the damage, while The Poor get wrecked by it.
Some of The Rich *actively benefit* from Inflation hitting, if the Inflation boosts the prices of the Assets they own (think Real Estate or Equities).
The Rich are shielded from the damage, while The Poor get wrecked by it.
Some of The Rich *actively benefit* from Inflation hitting, if the Inflation boosts the prices of the Assets they own (think Real Estate or Equities).
WHO BENEFITS FROM MONEY PRINTING?
-Tiny Number of Ultra Rich Individuals and Large Corporations who are handed the freshly printed money from The Central Bank (Federal Reserve)
-Financiers (Higher Asset Prices Means Higher Fees/Revenue For Financial Industry)
-Tiny Number of Ultra Rich Individuals and Large Corporations who are handed the freshly printed money from The Central Bank (Federal Reserve)
-Financiers (Higher Asset Prices Means Higher Fees/Revenue For Financial Industry)
WHO IS SHIELDED FROM THE DAMAGE?
-Rich People who have their wealth sitting in Assets that will keep peace with inflation (Real Estate, Equities)
-Rich People who have their wealth sitting in Assets that will keep peace with inflation (Real Estate, Equities)
WHO IS HARMED BY MONEY PRINTING?
-Lenders. Inflations hurts lenders.
-Poor People. People who keep their wealth in Cash (disproportionately it is The Poor who do this).
-Lenders. Inflations hurts lenders.
-Poor People. People who keep their wealth in Cash (disproportionately it is The Poor who do this).
Fiat Currency is a terrible idea, and constantly doing Money Printing is a terrible way of running an economy.
So why do we do it?
Because The American Ruling Class BENEFITS FROM IT, at least in the short term.
So why do we do it?
Because The American Ruling Class BENEFITS FROM IT, at least in the short term.
Ultra Rich Individuals and Large Corporations who are handed the freshly printed money benefit from it.
Financiers benefit from it.
Rich People (who have their wealth in Assets) benefit from it.
Financiers benefit from it.
Rich People (who have their wealth in Assets) benefit from it.
Poor People are harmed by it.
Who do you think wields more Power over deciding whether or not Money Printing is done?
Ultra Rich Individuals, Large Corporations, Financiers, and Rich People
OR
Poor People
???
Ultra Rich Individuals, Large Corporations, Financiers, and Rich People
OR
Poor People
???
