Every great economic expansion in modern history has occurred on the backs of a expanding middle class. Sustainable economic growth can't occur without IT – wealth growth of the middle class. The current fragile economic growth period has been propped up by the use of 7 trillion in global Quantitative Easing by central banks that has created a global wealth explosion in stocks, bonds, derivatives and real estate for the the rich. The worlds middle class has actually lost ground as the top 10% have taken 106% of asset appreciation. This new global wealth has been obtained by the rich due to its first access to money creation. The past seven years has not seen increase in property and business ownership in the middle class as we saw in the 50's, 60's, 80's and 90's. In addition real wages are down in the new global economy due to global wage arbitrage and technology. For this reason there has been no wealth creation in the middle of the wealth pyramid thus little velocity of economic growth. Basic math here missed by 99% of economists as they focus on GDP where all growth is due to the top.
The proposed plan recognizes escape velocity is not possible without more QE and basically SWITCHES the punch bowl away from the most wealthy and creates a QE plan that enriches the middle class and even the working poor. QE can be used for main street and create a powerful economic multiplier by allowing the middle class to use the same leverage tools to use its savings for capital investments to increase personal, and here's the ticker, community wealth that is sustainable and lays a strong foundation for wide spread economic growth to be experienced by many. In this plan middle class savings is no longer the enemy (“paradox of thrift”) but the very engine for economic growth. The middle class will get higher returns of 600 - 1,500 basis points than basic money markets today and also benefit from tighter spreads as a borrower. This is how we increase the velocity of economic transactions wealth creation for the middle 60%.
This plan allow for middle class families to get use leverage and have first access to money and provide needed credit by using their own savings. Please contact us with your feedback.