Here’s what has been happening in our economy for the past five years, and why the rich are weathering this economy so much better than the rest of us.
The richest 5% of Britons have been the biggest winners from the Bank of England’s attempts to lift the economy out of recession by creating electronic money, the Bank has said.
But in a defence of the £375bn programme of asset sales since 2009, the Bank said that quantitative easing had spared the UK from an even deeper slump….
“Some individuals are likely to have been adversely affected by the direct effects of QE. Many households have received lower interest income on their deposits. But changes in Bank rate – not asset purchases – have been the dominant influence on the interest households receive on bank deposits and pay on bank loans. By pushing up a range of asset prices [such as equities and bonds], asset purchases have boosted the value of households’ financial wealth held outside pension funds, although holdings are heavily skewed with the top 5% of households holding 40% of these assets.”
Quantitative Easing is really just raising prices. Stock prices go up, not because of increased value, but because the dollar (or pound euro whatever) is worth less. Stock prices are denominated in dollars, don’t forget. Then high gas prices. Is any part of this good for the middle class?