US dollar purchasing power since the founding of the Fed
The financial sector and its intermediaries ( Stocks and bonds markets) have directly benefited from the new Fiat “Dollar” standard. Knowing the effect of Fiat inflation on the economy, it may be assumed that the Financial economy has siphoned actual wealth and resources from the real economy due to its privileged ties with the banking system. Meanwhile, the productive economy has stagnated, resulting in a gradual decline in living standards for most of the population and an unfair enrichment of a privileged “ FIAT ARISTOCRACY”.
Financial securities are created “ ex nihilo” ( out of nothing) by investment banks just like commercial banks issued credit. Both issues get their value from “legal” and political coercion rather than natural market “Trust” in their ability to maintain their value and worth over time.
Fiat credit creation unfairly benefits securities issuers and holders in an inflationary regime because of the Cantillon effect loop. Central Banks are mandated to purchase financial securities and debt instruments to issue credit to the banking system. This direct intervention benefits the securities economy, the stock market, and financial intermediaries ( bankers, lawyers, investment professionals, and large shareholders). They receive the money first, while the rest of the economy suffers from debased purchasing power and capital malinvestments.
The modern financial economy and its stock market, in particular, are not the byproduct of real savings-growth-based economic demand for financial securities but rather the corrupted beneficiaries of a Central Banking’s debt-driven economic regime. This implies that the stock market’s performance is influenced in large part by inflation rather than traditional economic indicators and companies’ qualitative factors.
It is hard to believe it given the scale of the propaganda promoting otherwise, but the stock market and the financial economy, as we know it today, are not a byproduct of Free market Capitalism.
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