The last twelve years have been very interesting from an economic standpoint. With each market dip and each response from the Fed, it is clear that their mission is not to achieve full employment while keeping inflation in check. Their mission is keep bond and stock markets propped up at all costs.
But with each round of money printing, what is really going on is it is creating the biggest wealth gap we have ever faced as a nation. You see, money printing does cause inflation in some form. In this case, it hasn't yet been in the ways that the Fed measures inflation in terms of goods and services. But inflation has shown up in a multitude of other areas from stock prices to housing to healthcare to college tuition.
And inflation is a secret tax on the poor and subsidy for the rich. If wage growth is not keeping up with inflation (and for most Americans it hasn't for decades now), it means inflation is actually a pay cut. So every time you see the Fed print more money or the government approve another bailout, equate this to wage deflation because that is what is happening.
The way the rich get wealthier from inflation is because they own most of the financial assets, and in order to own those assets, they needed to borrow money. What happens then is that they borrowed money in yesterday's dollars but pay back the loan using tomorrow's dollars. So as money printing happens and inflation sets in, this is actually a form of loan forgiveness for the rich. Plus they also benefit from the underlying investment likely increasing in price.
This dynamic has been at play for decades now but has really accelerated over the last 12 years as the Fed thinks it has the power to prevent a recession. Hopefully you now realize, they really just have the power to make the rich richer and the average American poorer. And the data proves this out. The top 1% (and even top 0.1% and even top 5 richest people) now have more wealth in their hands than 90%+ of Americans combined.
It is nearly impossible to fight this. Voting for different politicians doesn't fix this because both political parties don't recognize this as an issue. We can't vote for the Fed leader. He/she is picked by the President. Also, most Americans don't even realize this is happening so they can't unite to voice their frustration.
There are four ways to actually have an impact. First, you need to make other people aware of this. Remember money printing and bailouts equal wage cuts for Americans and equal loan forgiveness for the rich. If more citizens become aware of this and voice their frustration, then politicians will wake up, and then maybe someone will start to hold the Fed accountable.
Second, you need to realize the vote you make with your dollar is way more impactful than the vote you make with your pen. We collectively need to stop having our money funnel straight towards the mega rich. Obviously, that is tough to do especially with lockdowns from COVID where we have very few choices but to buy more from Amazon. Resist the urge. Try to by small and local. Our livelihood really depends on it.
Third, you need to become less reliant on dollars. The less we need dollars to get by, the less power the Fed has. Find ways to meet your needs without dollars. That's the purpose of this website so browse posts to find ways to reduce the amount of money you need. The less money you need, the more impactful your time and earnings become.
Lastly, do what the rich do and invest, but be careful because the rich love to sell suckers their investments at all time high prices. In a world where the Fed has manufactured 0% interest rates, what has happened over the last 12 years is that now all other types of investments (bonds, stocks, housing, etc.) have also been bid up to a price where they too will earn close to 0% (or perhaps even lower).
The best thing to do with your savings is to put them in things that will go up as more money is printed. This includes gold, silver, and platinum. This likely includes Bitcoin. This includes certain income producing real estate (where the monthly rent can cover your mortgage plus all your expenses). And this includes investing in high quality companies that are making money, will continue to grow, don't have too much debt, and are fairly priced today. There are very few companies today that meet these criteria but there are a handful out there if you know how to do stock research.
Otherwise, you are better off just keeping your savings in dollars (preferably in a high yield savings account) and then waiting for the market to correct. As much as the Fed thinks it has the power to prop up markets forever, it doesn't. One of these days their money printing won't work and the bond and stock markets will crash. That's when you will be one of the few with dollars and can swoop in and buy things at a great value.
As the investment saying goes, be fearful when others are greedy and be greedy when others are fearful. Now is the time to be fearful and to prepare accordingly. Lower your reliance on the dollar, spread the word about the Fed, and then wait patiently for things to come back into balance.
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