Last month, the Bank of England issued a report that must have made Fed chairman Ben Bernanke squirm.
It said that the Bank of England’s policies of quantitative easing – similar to the Fed’s – had benefited mainly the wealthy.
Specifically, it said that its QE program had boosted the value of stocks and bonds by 26 percent, or about $970 billion. It said that about 40 percent of those gains went to the richest 5 percent of British households.
Many said the BOE's easing added to social anger and unrest. Dhaval Joshi, of BCA Research wrote that “QE cash ends up overwhelmingly in profits, thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it."
The BOE countered that the benefits of easing may have trickled down, and that “without the Bank's asset purchases, most people in the U.K. would have been worse off."
Still, the paper is instructive for the United States. The latest round of QE announced by Bernanke yesterday has sparked growing controversy about how Fed policy has mainly helped the wealthiest Americans. (Read more: The One Percent Gives Up Ground ... to the Five Percent )Page 1 of 4 | Next Page