It’s a beautiful Manhattan day and Inventive Ben is back at the mike again this coming evening, selling his stuff.   He’ll be telling whoever will listen that all is going to plan and that the average American is feeling richer and more confident.  How?

Well, because of the “wealth effect” of course.

But therein lies the problem…it’s an “effect”…not a “cause”.

Savings over time creates capital. Capital invested over time creates jobs.   Jobs ultimately create savings which in turn creates more capital which when invested creates real wealth.

But if you can’t create jobs because of faulty policy (the emperor has no clothes) then all you can do is print money to create the paper wealth effect instead.

It’s simple, easy and it works….until it doesn’t!