23 August 2012, the Bank of England tried to make it look as though flooding the markets with cash is benefiting everyone. But their own words revealed the truth: “…asset purchases have boosted the value of households’ financial wealth held outside pension funds, although holdings are heavily skewed, with the top 5% of households holding 40% of these assets.”
Quantitative easing is a monetary policy that tries to stimulate the economy by buying up privately held financial assets. But as the Bank of England (BoE) pointed out, 40% of those assets are owned by only 5% of the people in the United Kingdom! You can be sure it’s a similar situation in the United States.
The BoE also admitted that traditional ‘savers’ are the ones who’re losing, as interest rates on traditional savings accounts are at record lows. So much for trying to get people to put money away for a rainy day.
One British company, that offers financial services for people over 50 years of age, pointed out that retirees are the big losers in all this quantitative easing (QE): “…the 21 million over 50s…have been negatively impacted……It is asserted, but not proven, that pension savers are no worse off due to QE gilt buying [gilt is a British term for government bonds], because the value of their pension savings has gone up to offset the fall in the annuity income they will receive when converting their pension fund into a pension income. This assertion is simply not correct and the reality is very different for those recently or soon to be retired.”-Ros Altmann, Saga
The BoE tried to smooth things over by saying the worst that could happen to retirement funds is nothing: “….QE is estimated to have had a broadly neutral impact on the value of the annuity income that can be purchased from a typical personal pension pot invested in a mixture of bonds and equities.”
The British National Association of Pension Funds (NAPF) responded by pointing out that if pension funds were already in trouble before the QE started in 2009, and the QE has a neutral impact, then nothing has been improved (except for the rich). The NAPF states that what has actually happened is that retirement funds are worse off as a result of QE: “…schemes that were already in substantial deficit before the financial crisis are likely to have seen those deficits increased.”
Essentially; quantitative easing only helps the 5% of the people (elites) holding financial assets (such as bonds), it is doing nothing, or actually making things worse, for 95% of the people!!!