- Source, The Prospect Group:
Wednesday, August 14, 2013
Has The FED Been Effective?
It is interesting that the money that has been printed essentially has not flown into the pockets of the workers or the middle class. We have precise statistics about who benefited from the money printing. Asset inflation has benefited a maximum of 3% or 4% of the population. It has benefited less than 1% meaningfully because if you look at real estate prices last year in the Hamptons, they were up 35% to record highs. Sandy Weill bought a condo in New York in 2007 for $43m at the peak and he sold it for $88m last August. Steve Cohen, a hedge fund manager, bought a condo for $24m on the East side and he is now putting it on the market for $115m. That price has gone up, the Mayfair economy or the luxury economy has gone up. But if you look at Las Vegas, or anywhere in the US that is not high end, it has recovered somewhat, but it is still way below the peak. But we also see this say in Asia. Recently I was in Bangkok and I have never seen such a big Ducati agent in the world. A Ducati is an expensive toy by Thai income standards. Driving around Thailand, you see a large number of Bentleys and Maseratis and Ferraris and BMWs and the works. These are expensive cars in this country because there is a 100% import duty on these cars. Whereby I think a lot of well to do people did not pay the import duty.
