It's just incredible to watch you blame the failures of government on the free market. I'm going to take 20 minutes out of my day to explain 'carry trading' to you. A carry trade works like this:
- Borrow 100 million in JPY from a Japanese bank using 5 million in collateral
- Use money to buy US dollars and then US stocks (or bonds, or EM securities, or whatever)
- Watch asset go up because everyone else is doing the same thing
- Sell stocks/bonds for 125 million. Buy back devalued yen for 75 million. (USDJPY has gone from 75 to 120+ over the past three years)
- Make 50 million profit on a 5 million investment, or 1000% nearly risk free over a few years
Or, let's say you don't like carry trading. You're the CEO of Alcoa. You decide you like money. So:
- You borrow 1 billion from a bank at 0.25%
- You buy back 10% of your stock.
- Suddenly your earnings divided by net capitalization are 10% higher
- Share prices rise, and you cash in your stock options for 20 million
The 0.1% have been making money hand over fist because of government controlled central bank free money. Even if all you do is buy SPY/QQQ, you just made 150% on your investment over the past 5 years, taxed at 20% capital gains. The poorest 20% don't benefit from this, because they are too poor to invest in stocks and bonds. If the central banks stopped printing, none of this would be happening.
How exactly do you consider this to be 'unrestricted capitalism' ?