Rate of Wealth Transfer to Rich People Remains Steady after Yellen Testimony

Funny story written by Jaki Treehorn

Wednesday, 15 February 2017

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The rate at which wealth is transferred from mostly lower and middle income savers, who keep their money primarily in bank accounts, to the wealthiest Americans remained steady at around 2.0 percent annually, as detailed by Fed Chief Janet Yellen in her biannual report to Congress this week.

The rate paid by banks to savers, tied to the borrowing rates which the Federal Reserve Board control (The Federal Funds and Discount Rates), remained at around zero to a quarter percent as they have been for the last eight years of economic recovery. The prime beneficiary of the zero interest rates are those fortunate enough to own stocks, primarily the top 10% of net worth individuals who own over 80% of securities in the U.S..

The inflation rate as reported by the Federal Reserve head Yellen was around 2.3%, of course ignoring the prices of food, energy, items which consumers can no longer afford, and anything else in the index that goes up in price.

"That puts the all important wealth transfer rate, at which savers are losing money to the top 10% of net worth individuals, particularly billionaires, at about 2.0%", explained Yellen. "It is important that we keep the transfer rate in this range, it is only fair to the one tenth of the population who are the wealthiest, who are so important to the proper functioning of our economy. We really can't return to the days when we subsidized savers by giving them a fair rate of return, the economy will just collapse if we do".

Asked by one Democratic Congressman if she was concerned about the loss of wealth among the less financially adept savers such as the elderly, retirees, lower and middle income families and others on fixed income, Yellen replied that many of the benefits of zero interest rates should begin to percolate through the economy "in relatively short order, perhaps another decade or two".

"We might have to raise interest rates sometime in the future. Or maybe we won't" replied Yellen.

The funny story above is a satire or parody. It is entirely fictitious.

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