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What Zero Hedge calls 'under-consumption' (below), Marx and Engels called over-production. Same thing. Both are market-killers. The point is Bill Gates can only wear one pair of pants at a time, just like you and me. But when he and his fellow plutocrats have all the money, you and I find it increasingly difficult to clothe our families. Powerful deflationary forces ensue.
"With a relatively low marginal propensity to consume among the rich, when they receive the vast bulk of income growth, as they have, then the country will face an under-consumption problem...Hence, while governments preside over economic policies which make the very rich even richer, national consumption needs to be boosted in some way to avoid underconsumption ending in outright deflation."
Thus asset price inflation was a ploy to camouflage stagnant middle-class wage growth and to foster an 'illusion of wealth'. As ZH points out, whether this was an intentional deception or not 'we will never know'.
No matter. The effect is the same.
The entire article "Scandal: Albert Edwards Alleges Central Banks Were Complicit In Robbing The Middle Classes" can be found here:
http://www.zerohedge.com/article/sca...middle-classes
"With a relatively low marginal propensity to consume among the rich, when they receive the vast bulk of income growth, as they have, then the country will face an under-consumption problem...Hence, while governments preside over economic policies which make the very rich even richer, national consumption needs to be boosted in some way to avoid underconsumption ending in outright deflation."
Thus asset price inflation was a ploy to camouflage stagnant middle-class wage growth and to foster an 'illusion of wealth'. As ZH points out, whether this was an intentional deception or not 'we will never know'.
No matter. The effect is the same.
The entire article "Scandal: Albert Edwards Alleges Central Banks Were Complicit In Robbing The Middle Classes" can be found here:
http://www.zerohedge.com/article/sca...middle-classes