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by tenarchits 1922 days ago
How are you distinguishing causation from correlation as it pertains to wealth inequality and monetarty policy?
1 comments

Banks and governments are constantly injecting new money into the economy. If you look at how that money flows into the system, you will realize that governments mostly award big lucrative contracts to big corporations and banks loan capital entirely based on existing collateral owned... So it's pretty clear who is controlling the majority of all the newly created currency; those who already control a lot of capital. Then when you compound the returns on those investments, it's pretty clear what's driving accelerating inequality. Some entities are getting easy money and others are not.

An entity which has access to easy credit can throw that newly printed currency on any asset and it will balloon in value over time at an accelerating pace... No matter what the asset is. The value of the collateral will increase faster than their underlying debts; these entities can thus keep borrowing in perpetuity. They can keep it going forever, so long as banks keep loaning them more money...

Banks cannot stop loaning money to big capital holders because they know that it will lead to a catastrophic economic collapse. They are stuck in a vicious cycle wherein big corporations act like governments; constantly taking out new bigger loans to pay for the older loans... Or engaging in credit laundering through the use of shell companies.