The Fed's funny money has two beneficiaries: the rich and Bernie Sanders. | Source: JONATHAN ALCORN / AFP
The Federal Reserve is reportedly considering loaning money to hedge funds for them to make risky bets.
Fed policies have greatly benefited the rich and led to massive U.S. wealth inequality.
That benefits Bernie Sanders as he strives to defeat Donald Trump in 2020.
Bernie Sanders has been rising fast as a 2020 presidential contender, and recent polls suggest that he’s doubled his lead over Donald Trump and would clobber him in a head-to-head election.
It’s increasingly clear that Sanders has a viable path to the presidency, and he owes it all to the U.S. Federal Reserve.
Federal Reserve Gives Hedge Funds A Handout
The U.S. central bank is reportedly considering lending money directly to hedge funds to avert the repo market crisis. The Fed’s aggressive stance suggests that the recent liquidity injections in the repo markets have not been enough.
It also suggests that at least one big hedge fund is in a precarious situation, and the Federal Reserve is just going to give them free money in the form of a preemptive bailout.
The Federal Reserve is setting a morally hazardous precedent. Hedge funds will be encouraged to place high-risk bets as they will have nothing to lose. This safety net provided by the Fed will further increase the gap between the rich and the poor, just like it did during the Great Recession.
Since Bernie Sanders’ presidential campaign is centered on wealth inequality and attacking the ultra-rich, he stands to benefit from the Fed’s actions.
Federal Reserve Pumping The Stock Market Will Help Bernie Sanders
The Federal Reserve can’t diverge from its present course, or the entire scheme will collapse. And judging by the recent polls, Bernie Sanders could be the one that reaps the rewards.