In any event, quantitative easing ultimately benefits the rich. For example, the Bank of England commissioned a study in which it said that 40% of the gains of its quantitative easing programme went to the top 5% of British households. The reason is simple. The rich own shares, property, and precious metals, whose values rise or remain constant when the central banks flood the world with money conjured out of thin air. Conversely, working people and savers rarely own financial assets whilst simultaneously having their real wages drop during an inflationary period. Dr Norman’s tacit support of even lower interest rates penalises retirees who depend on interest income to live. In essence, Dr Norman wants the Reserve Bank to continue the very imbalances that helped produce the Global Financial Crisis by punishing those prudent enough to save and rewarding the spendthrifts.
So this is what the pro-inflation policies of the left will bring – gains for the top 5% and losses for poorer working people. Are these not the same people who go on about income inequality?Tags: inflation, Marc Krieger, monetary, Russel Norman