This is some great analysis from Jim Bianco at Bianco research. Mr. Bianco finds that QE2 has no wealth effect on the middle class. In fact, it HURTS the middle class! This is also in-line with Robert Shiller’s analysis of the wealth effect. In essence, this program isn’t going to help the economy via a wealth effect. It is more likely to hurt it. Ethan Harris of Merrill Lynch makes an alternative case, but doesn’t provide a whole lot of evidence:
Viedo attached below:
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.