Following the COVID pandemic the United States Federal Reserve is rapidly increasing the money supply by printing money and enacting policy to buy distressed financial assets in order to support the economy. The FED is in fact not supporting the economy but actually supporting the capital markets with the hopes that this will inturn support the economy. This market support and rising prices in a histrocially overvalued asset bubble further raises the capital base of the country with no real impact on the income and wages earned by the country’s citizens. These policies meant to raise the level of employment are in fact having the opposite effect by furthering the inequality between the haves and the have-nots, this inequality is only further exacerbated by mass layoffs by corporations in order to stay profitable in a slowing economic environment.
So the FED is increasing inequality but what does inequality have to do with violence? Everything.
Historic resarch by Walter Scheidel in “The Great Leveller: Violence and the History of Inequality from the Stone Age to the Twenty-First Century ” shows that time and time again in history the the only way that extremet inequality is ‘levelled’ is through violence. Taken another way, as inequality increases so does the likelihood of violence.
“..this dangerous growing inequality and lack of upward mobility has jeapordized middle-class America’s basic bargain that if you work hard you have a chance to get ahead. This is the defining challenge of our time, to make sure the econony works for every working American”The Great Leveller by Walter Scheidel
The current policies of the Federal Reserve are unfortunately only accellerating the issue of inequality as it continues to support the prices of assets that help the rich while America is slowly running out of jobs. This is why I believe that we will continue to see mass levels of social unrest termed as ‘race wars’, ‘culture wars’, ‘class wars’,’youth uprising’. This unrest is playing out as I write this article in cities accross America as growing social gatherings are fighting for equality and I believe this will continue until there is a “levelling” of inequality.
Unfortunately there is no happy ending to this story and increasing FED actions only delay the inevitable and extend the period of sorrow as it continue to use its power to prop up the market further divorcing the market from the real economy. Let me be clear that if the Fed did’t pump the market we might already be in a recesssion, but would you rather have a smaller recession now or a deeper recession later? The path has already been set by the Fed and the US Treasury and there is no turning back until all its power have been exhausted which further breeds violence in this country until it all comes to a head.
Eventually the market will catch up with the economy in a spectaclur fall from grace, a ‘Great Devaluation’, a burst in the price of all assets and in doing so it will destroy a significant amout of capital owned by the Haves. This ‘levelling’ event is where some of the have’s become the have nots and from then on over time America unifies in one voice to rebuild an economy that works for all and not the few.