How this works is that people in the investable class who have access to assets can liquidate them for real cash. And if these assets have been rising in value (perhaps in a bubble), the amount of cash available to borrowers can be enormous. “Anybody who has an engagement with the nominal value of investable assets right now is getting wealth at a pace that’s hundreds of times beyond that available to somebody who’s outside of that stream.”
He also thinks inflation will eventually appear.
Are there any benefits from recent Fed policy? Possibly down the line. “Seepage of this monetary excess into the rest of the local economy, piece by piece, means you’re going to wind up with a generalized inflation later on in this process, that I don’t believe the Federal Reserve will be able to stop it, or have the will.” Could this lead to higher wages? That’s anyone’s guess at this point.
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