Stanley Druckenmiller lays out how the Federal Reserve's asset purchases are increasing inequality in America. These asset purchases raise the price of financial assets. That benefits the holders but does little for those who don't own stocks.
Though framed in terms of the rich versus everyone else, Fed policy also increases inequality between the generations. Older generations have had time to build up their holdings of stocks and other financial assets. Their portfolios have benefitted form the run up of non-stop Fed simulative policies for the past thirteen years (low rates, massive asset purchases). Younger generations are the losers. Young savers and investors are confronted with having to buy into a massive asset bubble with inflated asset prices for everything--homes, stocks, bonds etc.--or to save with negative real interest rates.
As I have blogged before, the current investing environment is one of the worst for young people in the past 40 years. A big part of that is the never-ending stimulus of Fed programs.
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