The Federal Reserve cannot create permanent wealth through quantitative easing

A reader asked me to comment on a video from the Big Picture conference of Jim Bianco commenting on the so-called wealth effect of quantitative easing. In the video, Jim takes the position that the Fed cannot create permanent wealth though QE. It can only create (temporary) "loss reduction".  Jim noted that we have had record stock mutual fund outflows in the United States, and that this had not changed even after the Fed began QE3. And he believes this is emblematic of the Fed's inability to cr...

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