The Failure Of The Fed's 'Wealth Creation' Mandate (In 1 Simple Chart)
Previously we've shown who did (and did not) benefit from the resurgence of household net worth. Now we thought it was time to provide the context for why The Fed's obvious policy of juicing asset inflation in the hopes of engorging animal spirits among the general population and a renaissance in public spending is a total and utter wealth-inequality-driving farce. As Evergreen Gavekal indicates so clearly, the consumer isn't fooled by Fed policy; despite a major uptick in household net worth, spending remains anemic.
Simply put - 3rd time was not the charm... and as is evident the 'transmission' to spending is getting less and less effective with each new Fed-driven, cheap/free-money inspired boom (and bust)
Source: Evergreen Gavekal
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The fed doesn't engage in QE to help the economy. It engages in it for 2 reasons. 1) To get out of the mess of not having enough buyers for bond auctions which primarily is due to the fact they are fixing their own auctions. And 2) It's to provide a giant cushion of free liquidity to their banker friends and themselves to get rich even while the rest of America suffers from their destructive behavior.
The graph somewhat points out the fact. It is quite apparent to all but the dumb and blind together that QE does not help the public or the broad economy. But that's not the point of it. Is it? Money and liquidity never should be created without creating goods or services. It's bad enough the government does it. A central bank without mandate from any democratic authorization should never be allowed such power. It violates our constitution among other things.