[quote=FlyerInHi][quote=CA renter]The Federal Reserve is “lots of people”?
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The Federal Reserve buys assets on the open market. They are prohibited from buying directly from Treasury. So the Fed buys from savers.
[quote=CA renter]
And it’s not “lots of people,” even outside of that. The money/power has been concentrated into fewer and fewer hands. [/quote]
That’s social and fiscal policy that calls for things like a higher minimum wage, paid vacation, child care, etc…[/quote]
Yes, social and fiscal policy are largely responsible for the wealth/income gap, but the Federal Reserve’s policies are what has fueled the booms/bubbles and busts, and this is also significantly responsible for the wealth inequality we’re seeing in this country (and in many other parts of the world, too).
The Fed usually buys from Primary Dealers who may or may not being selling treasuries purchased from Joe Sixpack, the saver. I don’t have exact numbers, but have read that a significant portion of the Fed’s purchases since the economic crisis were new issues, especially the QE portion. And many of the original mortgage-related assets that were purchased by the Fed hadn’t yet been sold on the open market.
And the fact that investors of all stripes are buying so many “risk-free” bonds when interest rates are at/near historic lows shows that there is a tremendous amount of pessimism about the economy, especially when the stock/commodities/housing markets have been on fire, relatively speaking. Many investors are desperate, and they’re scared to death about the future, both individuals and institutional buyers.
