The zero rate boom was never free since ordinary people traded their future away while a small elite captured the nation’s stocks, homes and land under the illusion of easy money.

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BREAKING: The US Treasury posted a $284.4 billion deficit in October, the worst opening month to any fiscal year in history.

This exceeds the previous record of $284.1 billion in October 2020, during the historic pandemic response.

Government spending jumped +18% YoY, to $688.7 billion, bringing the 6-month moving average up to ~$590 billion.

To put this differently, US government expenditures averaged ~$22.5 BILLION per day last month.

The deficit spiral is accelerating at a record pace.

How Easy Money Ends Up Making Inequality Worse

Whenever the economy slows down after a crisis, a pandemic, or just a weak period, central banks try to give it a push. Their usual method is to cut interest rates and increase the supply of money in the system. The goal is simple: make loans cheaper so that people and businesses borrow and spend more.

Economists call this an easy money policy. On paper, it looks like a perfect solution. When borrowing is cheap, consumers buy more, companies expand, and the economy starts growing again.

For a while, it really does work. Growth returns, markets recover, and people feel more confident. But if such policies continue for too long, they begin to quietly distort the system. One major side effect is that they end up widening the gap between the rich and everyone else.

When Borrowing Gets Cheaper

The RBI, like other central banks, controls how expensive or cheap it is to borrow money. When interest rates are cut, businesses can take loans more easily, and households can afford EMIs for homes, cars, or education.

At first, this extra flow of money helps. Companies grow, jobs are created, and spending increases. But cheap credit does not always stay in the “real economy.” A large part of it moves toward financial assets such as stocks, real estate, and gold, where investors expect better returns.

That is where the imbalance begins to appear.

When Money Chases Assets Instead of Work

Think of someone who already has significant savings. Their bank deposits are now earning very little interest. So they decide to move that money into the stock market, buy another property, or invest in commodities like oil or metals.

When enough people do the same, asset prices begin to rise. This happens not because companies are suddenly performing better or houses are in short supply, but because too much money is chasing a limited number of assets.

This is what economists call asset inflation, and it mostly benefits those who already own assets. Their wealth increases automatically as prices rise.

Meanwhile, ordinary savers earn less than inflation on their deposits, meaning their money gradually loses value. Over time, this quietly transfers wealth from savers to investors. It is not intentional, but that is how the structure of the system works.

MORE:
https://medium.com/the-investors-handbook/how-easy-money-ends-up-making-inequality-worse-8296d533383a

Easy money is just a free ride for people who already have everything. Meanwhile everyone else is watching their cash shrink and wondering why it never seems to catch up.