First, a couple of disclaimers …
1) At heart, I relish conspiracy theories.
2) You probably know this already
But … the obvious has suddenly became clear to me.
Ben is in cahoots with Barack.
Here’s how and why it matters.
As loyal readers know, I’m bearish on the stock market.
Most companies have done a monumental job deleveraging and boosting profits by restructuring … i.e. jettisoning under-performing assets and employees.
Add QE1, QE2, QE3 … and you’ve got yourself a stock market rally.
What perplexed me is why Obama would tolerate monetary policy that makes the rich richer (way richer) and keeps the poor poor.
Didn’t make sense to me.
Until the light bulb finally illuminated.
Here’s what’s going on …
- The Fed infuses massive amounts of money into the economy
- The bulk of added liquidity flows to the stock market … Dow soars
- The rich get richer … mostly via capital gains
- Obama targets the rich to pay higher taxes … mostly on capital gains
- The higher taxes fund Obama’s spending initiatives.
It’s as simple as that … it’s a multi-step process, but the dough is going exactly where Obama wants it to go.
Begs another question, though …
What happens when the Fed slows the flow of money into the economy?
It will happen you know … only excitement is not knowing when.
When the Fed backs off, here’s what’ll happen:
- Stock market crumbles
- Rich get poorer
- Higher tax rates are in place
- Obama’s spending initiatives are in place
- Game over … BHO wins.
It’s as simple as that …