More supply of money to Capital thanks to Fed
But weak job growth in the face of big corporate profits. As I explained in the video of a previous post, the supply of money to capital income has increased, and they are enjoying the cost savings from low interest rates. They give many thanks to the Fed’s monetary policy.
Meanwhile, lower interest rates are not helping labor income. The supply of money to labor has decreased which is a drag on real GDP.
Here is a video by Fora TV that explains further. They present a graph for nominal consumer spending showing its decline. The idea is that the supply of money in the money market for labor income has decreased, while it has increased in the capital income market.
Edward:
Perhaps, I am speaking a foreign language (rhetorical)? Labor will increase as well as subsequent income if investments are made in Labor intensive ventures rather than Capital ventures which require little or no Labor. In my opinion, it is pretty simple. Wall Street and TBTF has found ways to be profitable even more so than the implementation of automation or sourcing to Low Overhead Countries.
Run,
Looks the time has come to talk about trade, trade deficits and international economics. I will prepare something,
Yet, I agree with you. How money is invested makes a big difference.