How to Close the Wealth Gap

It Begins With an “I” Were you forwarded this email? [Sign-up to The Daily Reckoning here.]( [Unsubscribe]( [Daily Reckoning] How to Close the Wealth Gap - “It’s no coincidence that as the political divide has widened in recent years, so has the economic divide”… - One way to stimulate the economy and grow jobs… - Will Biden come through on infrastructure?… Recommended Link [“What’s happening right now is 100% un-American”]( [Read more here...]( Have you seen this? It’s completely un-American and could be the #1 threat to your money right now. It’s why a former Managing Director at Goldman Sachs says, “It’s a rigged system… and regular Americans need to know what’s really happening.” Catch her full take now. WARNING: This video comes down tonight at midnight. Don’t wait... [Click Here Now]( Santa Barbara, California January 8, 2021 Editor’s note: What transpired in Washington this week in part reflects the increasing economic divisions within American society, says Nomi Prins. Today, Nomi shows you one way to potentially restore broad prosperity and reduce the wealth gap. [Nomi Prins] Dear Reader, WHAT happened at the Capitol this week reminds us just how divided we are as Americans. In fact, America is more divided now than it's been in decades, maybe even since the Civil War. Divisions were forming even before the improbable election of President Trump in 2016. They have only intensified over the past four years. This week these divisions manifested themselves on the national stage. Trump has been a hero to many Americans, mostly in red state America, and a villain to others, mostly in blue state America. Many Trump supporters believe the election was stolen from him, especially in key swing states. Biden supporters dismiss it all as a crazy conspiracy. It’s no coincidence that as the political divide has widened in recent years, so has the economic divide. For American workers, the economy is currently worse off than it was in the period following the global financial crisis of ‘08. The pandemic has increased the gap between the haves and have nots, partly because it toppled the real economy, while monetary policy responses to the pandemic boosted the stock market. Billionaires boosted their coffers by over $1 trillion in 2020. Since only about half of all U.S. households have a stake in the stock market, and the richest 10% of them own 87% of all stocks and mutual funds, stock market resilience went to the top, not the whole economy. Trickle-down relief is not working. The Stock Market Is Immune To COVID The 2017 tax cuts were supposed to help companies create jobs through productive investments. Instead, corporate savings boosted shareholders through stock buybacks. With share prices inflated by stock buybacks, the rich will extract even more -- making inequality even worse. Rising inequity hurts overall economic and social stability. It impacts how small businesses operate in our communities, which could mean your favorite restaurants, bars and shops may continue to close. Meanwhile, the ongoing pandemic, coupled with people’s modified behavior working from home, will provide a continued reason for central banks to remain in overdrive. Recommended Link [Former hedge fund manager slams Wall Street in viral video]( [Read more here...]( One bold former hedge fund manager just went on camera to expose how Wall Street is failing American investors right now. He’s boiled down what’s happening in the markets to just two words. And he’s urging people to take notice. You’re not going to see the details of what he’s predicting anywhere in the news, especially not from the big banks on Wall Street. [Click Here To Watch]( Today, the Fed’s balance sheet is sitting at a record high of $7.2 trillion. That figure is $2.7 trillion higher than the peak of the financial crisis QE period. As you know, all this Fed fabricated money flows into the stock market. Indeed, it seems as if much of the stock market is immune to COVID. This immunity is not just a feature of U.S. equity markets, but of equity markets globally that have far outpaced their respective economies in recovering from the initial pandemic onslaught. Think of the force of money itself like a roulette wheel that only stops on red every time you bet red. It’s not a fair or even system. The S&P 500 isn’t Main Street. It’s just an aggregate picture of corporate America’s largest companies. But those firms have the ability to handle shocks that small businesses and mom-and-pop stores could never withstand. Large firms get more access to the Fed’s cheap money through their banking partners. Plus, the firms that did the best in 2020 benefited from the economic disruptions that hurt the real economy, such as Zoom and Roku. Infrastructure Hopefully, 2021 will turn out to be a safer, calmer and more prosperous year. But, considering the baggage we’re carrying over from 2020, this year could be another rough one. The presence of the vaccines could provide a spark for the travel and leisure sectors, but it's unclear if people will willingly spend more money to travel -- or even want to -- until at least the second half of the year. There cannot be growth without getting the virus under control. And helping citizens cope with massive unemployment and lost revenue should be a top priority. But in a post-pandemic world, where is growth going to come from? Here’s one possibility... If money is spent on real economic growth projects, instead of simply being injected into the markets, it could actually decrease inequality. Real, sustainable infrastructure could spark organic wealth distribution and stabilize economies above financial markets. Infrastructure development is a way to create jobs, stimulate the economy, and provide quality, badly needed jobs for many Americans. In other words, one way to reduce inequality and provide more jobs is to build real things. This was what drove the economic boom in the U.S. during the post-World War II 1950s and 1960s. For example, construction of the U.S. interstate highway system began under the Eisenhower administration. But infrastructure spending has been in decline for decades, and partisan battles have stood in the way of action. President Trump had promised major infrastructure projects during his administration, but Congress was unable to deliver them. Recommended Link [Can These Two Men Save You from this Crisis?]( [Read more here...]( If you’re worried about the state of the economy and your investments in the market… Then you should watch this jaw-dropping new video. Two of the smartest financial minds on the planet came together to discuss the state of the market… And what they both see coming will surprise you. See what these men have to say, then make up your own mind. [See The Video Here]( China Leads the Way? While our U.S. politicians fight amongst themselves, other parts of the world do focus on infrastructure projects. For instance, there’s been a recent surge in demand for iron ore in China. Why? Because, as we know, China’s economic growth has been exceeding that of the U.S. since before the pandemic. China’s government has been providing stimulus to its manufacturing sector, which has fueled both consumption and steel output. Not only has China been the only country to resume positive economic growth this year, but its investment in infrastructure has been a key component of that growth, pushing up demand and prices for steel and iron in the process. I expect growth will emanate from countries that focus more on long-term infrastructure than short-term speculation. The incoming Biden administration has stated that infrastructure spending will be a major priority going forward. But what kind of infrastructure will be the best type of investment? Many think the high-return projects have already been completed, such as the interstate highways, tunnels and bridges that connect our transportation systems. But those structures are crumbling after years of use. That’s why maintenance and repairs are critical components of any new infrastructure bill coming out of Washington. But one central pattern has been holding up projects: budget concerns. This has created cost overruns and project delays for years past intended completion dates. But with interest rates at such low levels, Congress must find a way to take advantage of low-cost financing to keep America safe while traveling and accelerate growth through job creation and economic revival. Regards, Nomi Prins for The Daily Reckoning P.S. These are very uncertain times. I don’t need to list all the reasons here. [But this could be the #1 threat to your money right now.]( This threat is probably not what you think it is. But I want you to know about it. If you have any money in the markets, you’ll want to know about this threat ASAP. [Click here]( or on the image below to learn what it is and what you can do about it. [Click here for more...]( --------------------------------------------------------------- Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Nomi Prins][Nomi Prins]( is an American author, journalist, and public speaker. She is the editor of Nomi Prins' Dark Money Millionaire and contributor of Jim Rickards' Strategic Intelligence. She has worked as a managing director at Goldman-Sachs and as a Senior Managing Director at Bear Stearns, as well as a senior strategist at Lehman Brothers and analyst at the Chase Manhattan Bank. Add feedback@dailyreckoning.com to your address book: [Whitelist us]( Additional Articles & Commentary: [Daily Reckoning Website]( Join the conversation! Follow us on social media: [Facebook]( [LinkedIn]( [Twitter]( [RSS Feed]( [YouTube]( The Daily Reckoning is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Paradigm Press delivering daily email issues and advertisements. To end your Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [unsubscribe here.]( Please read our [Privacy Statement](. 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