The Fed Chair Admitted the Game Was Rigged

On Monday, I showed you something that shouldn’t be possible.

Two Americans can earn roughly the same paycheck for decades… Yet one can reach retirement with 15, 20, even 25 times more wealth than the other.

How does that happen?

That question sent me digging.

While I was searching for the answer, I found a recorded discussion featuring a man who had watched this divide develop from inside the most important economic office in the United States.

His name is Kevin Warsh.

Today, Warsh is chairman of the Federal Reserve. But back in 2015, as a former Fed governor, he joined a panel at the Brookings Institution to discuss what happened after the Fed pumped trillions of dollars into the financial system following the 2008 financial crisis.

Warsh was talking about the Fed’s efforts to stimulate the economy by pushing interest rates lower and financial asset prices higher.

And he said something most people never heard: The gains had been captured largely by the “most well-to-do” and the “most sophisticated” investors.

Why?

Because they understood what the central banks were doing.

In Warsh’s words, they “got the joke.” They were willing to “play the game.” And they were positioned to become the winners while millions of other Americans struggled to keep up.

Think about what he was saying.

The people who understood how Fed policy affected financial assets were better positioned to capture the gains when those assets rose in price.

One person spends a lifetime working for money. The other learns how to put money to work.

That’s the Wealth Gap Nightmare laid bare: Two Americans can earn similar incomes, yet one is forced to sell blood plasma to pay for car repairs while the other reaches retirement with as much as 25x more wealth.

Warsh Wasn’t the Only One Warning Us