Las Vegas Sun

March 28, 2024

LETTER TO THE EDITOR:

New money flows to the rich

Thanks for printing the excellent letter April 13, “Wealth gap just keeps widening.” I believe most of the wealth differential in our society is caused by the expansion of the money supply by the Federal Reserve.

Ironically, on the same page of the paper appears an editorial by The New York Times — “The Fed is courting trouble” —arguing for more monetary expansion to increase inflation. The Fed’s measure of inflation does not include major assets such as stocks or real estate.

The population on the lower side of the wealth gap does not buy, for instance, investment real estate. So when the Fed inflates real estate, they are left out of the gains but then their rents go up because of the increased value of the property. So, their measure of wealth, compared with the property owner, decreases, which builds on the wealth gap.

For asset owners, the gains accumulate while renters just have increased expense. As they say, the rich get richer.