The Fed’s Casino Is Giving Away Free Gambling Chips (But Only to the Super-Rich)
The Fed’s Casino Is Giving Away Free Gambling Chips (But Only to the Super-Rich) by Charles Hugh Smith for Of Two Minds
The rest of us eat our losses, either all at once or in bitter bites as we trudge through the financial wasteland left after bubbles burst.
The news that the Federal Reserve Casino is giving away free gambling chips triggered a frenzied rush that trampled the bears, including poor Yogi:
There’s just one catch to the giveaway: you have to be rich, and if you want more than a token free gambling chip, you need to be super-rich. Then you get a pile of free chips.
If you’re not rich–none for you, debt-serf! If you’re already super-rich, the Federal Reserve Casino has plenty of free gambling chips for you, which you are free to “invest” (heh) in just about any asset, since they’re all going higher: gold, silver, bitcoin, stocks, bonds, bat guano, quatloos and of course shorting volatility, since volatility dies when the gambling chips are free.
If you’re not rich, you’re only allowed to gamble with cash you’ve saved from hard-earned income. And since your income has been stagnant for years or decades when adjusted for real-world inflation, that means you’ll never have the leverage the super-rich have to acquire assets and watch them loft ever higher as the Federal Reserve Casino continues issuing free gambling chips to financiers, global corporations, banks and the super-wealthy.
The non-rich are allowed to borrow–but only at high rates of interest for worthless college degrees, rapidly depreciating pick-up trucks, groceries, $5 coffee beverages, etc.
When all is said and done, what’s left from all this borrowing by the non-rich is the interest due the super-wealthy, who just so happen to own all the debt.
The only Federal Reserve Casino table open to the non-rich is housing, but with prices at bubble highs, it’s a risky bet. Although you won’t find any corporate media coverage of this, if you poke around the legal notices in newspapers (yes, the dead-tree variety), you’ll find a steady trickle of mortgage foreclosures, as all the losers from the casino’s housing roulette wheel are foreclosed by entities such as Deutsche Bank National Trust Company as Trustee for Morgan Stanley ABS Capital I, Inc. Trustand Deutsche Bank National Trust Company as Indenture Trustee for New Century Home Equity Loan Trust 2004-2.