Still Not Spreading the Wealth Around @ Azizonomics This article compares the evolution of the percentages of GDP that both wages and corporate profits have had in the USA from the 1940s until 2012. Data shows that corporate profits have never been higher, around 11% of GDP, and wages have never been lower, around 43.5% of GDP. This trend has accelerated since 2008, because of the extreme and biased policies of the FED and the Federal Government, bailing out banks and corporations and, at the same time, forcing inflation and lower wages to the population. The article ends: “And the growing gap between the rich and the poor is steadily beginning to resemble neofeudalism.”
Lighthouse Investment On The ‘N’-Word In Monetary Policy @ Zerohedge Zerohedge publishes and comments a report from Lighthouse Investment on the likely next inflationary tool from the FED: Nominal GDP Targeting (NGDPT). The report, titled “Monetary Policy: the N-Word”, clearly explains how potential GDP (PGDP) is calculated and how the FED will use this concept to “sell” to the public the “reasonableness” of NGDPT. The trick lies in assuming that PGDP is invariant thru time (false assumption) and that, if real GDP (RGDP) is lower than PGDP, then it is reasonable, warranted, to “stimulate” the economy until NGDP = PGDP, conveniently forgetting that NGDP includes an inflation component (NGDP = RGDP + Inflation). How is that achieved? Through printing money, of course. The endgame of such a policy is hyperinflation and the replacement of the currency. This replacement, Lighthouse Investment assumes, would be Gold.