I was just at a conference in Downtown Manhattan and things are good there. My hotel (which thankfully I didn’t have to pay for) was modest but cost a sum far beyond what one might pay for a comparable room in another large city in the US. A beer pushed 11 bucks. Everything was more expensive because the money printed by the Fed practically spilled out onto the street around the part of town I was staying in.
The further one gets from the Federal Reserve spigot however, the more austere the world gets. Remember, each dollar printed by the Fed reaches the guys in New York and DC first – while prices are relatively cheap. By the time these debauched dollars reach the rest of the country prices are rising and the dollar buys less.
When Ron Paul called for ending the Fed, this is one of the chief reasons why.
It is the lack of understanding of this basic reality which I have to admit drives me crazy. Who besides the bankers are always calling for easy money? The people who say they advocate for the “less fortunate.” What these people don’t understand – and at this point they have no excuse – is that this easy money decimates the middle and working classes. It makes life harder. It makes people poorer. Yet supposed advocates for the disadvantaged invariably advocate for easy money. It is a truly bizarre thing. One can only figure it comes from a century and a half of Marxist religiosity. The faith in brother Marx. That can be the only answer, because it certainly doesn’t make any sense from a rational perspective.
What it all comes down to of course is that those grocery trips are getting a bit more painful each time you go aren’t they?
Perhaps the biggest split surprise is in confidence levels. As the chart above shows, there is a split just about at the level of median household income in the US (~$51,000). Those whose families are earning above that line are feeling more comfortable with the slowly improving economy, improving wages and job security. Those below the median income levels say they have far less confidence in the economy. There is a huge 47.5 point gap between the two.