Source: Charles Hughs Smith Blog
“The Fed is the mortal enemy of the young generations, and thus of the nation itself. ‘The wealth effect’ generated by rising stock and housing prices has long been a core goal of the Federal Reserve and other central banks….As Chris Hamilton explains in his recent essay Economic Doom Loop Well Underway, ‘the wealth effect’ has enriched the already rich at the expense of the young who didn’t get the opportunity to buy the assets the Fed has pushed to the moon at pre-bubble prices. That privilege was largely reserved for those who bought a decade or two ago, before the Fed made boosting asset prices the implicit goal of all its policies….The wealth effect has benefited the haves at the expense of the have-nots, the young who can no longer afford to buy homes or start families unless Mom and Dad provide the capital. The nation is losing an entire generation as a result of the Fed’s cargo-cult like obsession with boosting the wealth of the haves. The wealth effect is the most generationally lopsided policy possible, the equivalent of a ‘tax on youth.'”
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