Total Pageviews

Tuesday, October 18, 2011

Faber gets in on why there is wealth inequality

World economies are complex but the root of economic problems are really simple.

One huge problem is the shift in wealth from the poor and middle class to the rich. It is trendy and panders to the worst parts of our natures to channel Michael Moore and blame the rich. However, this is also foolish, unless you are going to claim that "the rich" are behind the huge expansion of money supply (some of them actually are, but you very seldom hear the OWS crowd chanting about that):

Marc Faber explains

"We cannot blame Wall Street and well-to-do people for the mishap, for this ratio to have exploded on the upside. We have to blame essentially expansionary monetary policies that favor assets. So you have low consumer price inflation, you have no wage inflation."

"In fact, the problem in America is that real wages, real compensation has been down since the 1970s. But at the same time, asset prices, equities, real estate and so forth have gone up dramatically, and that favors people who have these assets. And so the ratio expanded and you have now a record wealth inequality, and income inequality," he told Bloomberg Surveillance.


Marc Faber says Americans need to tighten their belts, save more and work more for lower salaries

No comments: