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Home | Blog | Bernanke's Zero Rates: a Jelly Donut Scream

Bernanke's Zero Rates: a Jelly Donut Scream

May 3, 2012
The Bernanke Fed's Jelly Donut force-feeding of the economy isn't making a dent in the unemployment rate, but it's inspiring a scream at the art auction.  Carol Vogel reports for The New York Times,
It took 12 nail-biting minutes and five eager bidders for Edvard Munch’s famed 1895 pastel of “The Scream” to sell for $119.9 million, becoming the world’s most expensive work of art ever to sell at auction.
Just a year ago this space considered the art market.  “The speed of the art market’s recovery is astonishing, but it’s a differently revived market,” said Michael Plummer, a principal of Artvest. “The lesson of the crash was to do your homework. Collectors feel wiser for the experience.” The Scream's price eclipsed the previous record, made two years ago at Christie’s in New York when Picasso’s “Nude, Green Leaves and Bust” brought $106.5 million. While the crowd inside was gasping and applauding as the price of Munch's work worked its way upward, the 99%ers outside were expressing their outrage.  According to the Times, demonstrators were protesting the company’s longtime lockout of art handlers by waving placards with the image of “The Scream” along with the motto, “Sotheby’s: Bad for Art. The  mix of union members and Occupy Wall Street protesters let out screams when the Munch went on the block. One protester, Yates McKee said, Munch's work “exemplifies the ways in which objects of artistic creativity become the exclusive province of the 1 percent.” But of course, as zero rate money finds its way into leveraged finance, the new robust junk bond market, and other walks outward on the risk curve, like say, the art market, it's a sign Bernanke's policies are working just as he planned. In fiat currency, fractionalized banking systems, those who get the money first benefit at the expense of the rest.  Or, put another way, the 1% get the jelly, the 99% get the crumbs.    

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