Has the Fed's Expansion of Capital Only Driven Speculation? And Are We Really in a Asset-Driven Recession?

Abstract

The current economic condition of the world economies presents an unusual number of aspects. While inflation is low as is unemployment, wage stagnation and wild increases in asset prices, especially equities, are incongruent. Yet central banks have massively increased liquidity and this has largely ended up in private banks or speculation, while consumer spending is stagnant, store closings at record highs, off-shoring of cash by major corporations is rampant and reinvestment unusually low. The possibility of a new form of recession presents itself.