[quote=briansd1]The fraud on Wall Street made us all think we were wealthier that we really are.
Peak to trough $16 trillion of US wealth was lost. Poof, gone just like that.
We regained about 1/2 of that.
Want pensions to get back to health? Assets value increases is the best way to do that.
I’m waiting for CA renter to say that, no, we don’t want inflation because that only hurts the middle-class who needs to buy houses.
But asset value inflation is exactly what the pensions funds were counting on. The pension funds were thinking that asset value rises made contributions unnecessary at times.[/quote]
Which is exactly why I hate the focus on asset price appreciation. If not for the boom-bust policies of the Fed and Wall Street, pension funds would have been much more conservative. They would have assumed lower returns, required higher contributions, and kept benefits at reasonable levels. It was the Wall Street casino atmosphere, backed by the Greenspan/Bernanke put, with a large helping of perpetual inflation expectations, that led to the “pension crisis.”
I favor an economy with a much lower, but more sustainable, growth rate that’s centered around a productive economy, rather than on the FIRE sector’s asset price inflation schemes. Yes, I hate inflation for the sake of “inflation.” It benefits asset owners (“capitalists” who are less productive) at the expense of wage earners (the producers) whose purchasing power is eaten away as a result of this excess money being pumped into the system. Note that when the Fed (or anyone at CNBC) talks about inflation, they only call wage inflation “dangerous” or “bad.” When asset prices rise, though, they cheer it on.
