I have posited for years that our modern day monetary system is insane. Aside from the obvious problems with moral hazards, the inflation tax and oh so many bubbles, lately events have conspired to illuminate a glaring example of the immorality of the system.
First, let's consider the devastating effects of inflation on the less than top 25% (percentile of wealth). Following the fiscal and monetary policy responses to the Covid 19 pandemic, we are currently experiencing a period of high global inflation. Central banks around the world have been reversing course from expanding balance sheets (QE) and Zero Interest Rate Policies (ZIRP) and are now contracting balance sheets (QT) and raising interest rates in efforts to fight inflation...