In 2020, the Federal Reserve created $4 trillion in new money. Where did it go? The St. Louis Fed's data shows the top 1% gained exactly $4 trillion that same year. I checked the math. They match.
Here's the wealth of the top 1% in 2020:
Total Assets Held by the Top 1% (99th to 100th Wealth Percentiles) St. Louis Fed
And here's the money supply increase:
How Money Teleports to Wall Street
The Fed could mail checks to everyone equally. Instead, they buy bonds and securities from banks. Banks get fresh money at 0% interest, then loan it to you at 20% on credit cards. It's like having a magic money printer, but the printer is in Goldman Sachs's basement.
The Productivity Heist
For the first half of the 20th century, when technology made workers more productive, workers got paid more. The correlation was nearly perfect.
Then in 1971, Nixon removed the gold standard. Before that, the Fed could only print enough money to trade for gold at $35 per ounce. After 1971, they could print whatever they wanted. Need to fund an unpopular war? Just print money. No need to ask taxpayers.
When you print money, the value doesn't vanish. It transfers from everyone holding dollars to whoever gets the new money first. The top 1% owns the most securities, so they get the new money first.
An Inequality Factory
Your productivity doubled since 1971. Your paycheck should have doubled too. Instead, inflation from money printing canceled it out. The Fed is just a machine that converts productivity gains into wealth for the top 1%.
How to Fix This
Distribute new money equally as a Universal Basic Income. It seems like a great bipartisan issue, too. Polls show everyone loves stimulus checks. Socialists and democrats should like it because it reduces inequality. Libertarians and classical republicans should like it because it shifts societal resource allocation decisions from central planners in Washington to individual choices in the free market.
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