[JWN] is the poster child for "peak income inequality"

A fractionally reserved money supply is a scam against the middle class because it has the power to increase the money supply outside of the control of the federal reserve.  In other words, the fed urges everyone else to take on debt while it hangs back in a relative sense with the monetary base.  Everyone else thus takes all the risk and the fed gets all the credit (no pun intended) for the debt-fueled prosperity of an expanding money supply.  Then, when everything is all pumped up because of the fed and it senses that more pumping is having negative return on GDP growth, the Wizard of Ozt can waltz in and start lecturing everyone on income inequality as if they actually give a shit.  They don't give a shit about the people but with interest rates ready to rise, the fed has to explain why this is happening and how they are doing it for everyone's good.

Gawd what a con game.

In any case, none of this pump and dump-o-nomics game would be possible without the scam of fractional reserve banking because while lending would still be allowed, issuing loans would not increase the money supply.  Instead of just making up money from thin air to loan out for interest, banks would first have to have people deposit savings in the bank into longer term savings vehicles like CDs, etc. and all loans would be restricted to money that was in such longer term deposits.

 This would restrict loans to existing savings, lower the overall supply of credit and thus increase its price (AKA interest rates).  You cannot have interest rates at zero or even negative as in Euroland without a fake money supply being in control.  Nobody will actually work to earn money and then lend it out for nothing or even a negative return; in fact, quite the opposite.

The real scam of fractional reserved banking/money supply is that it enriches those with first access to it.  In other words, the already rich get much richer because they are credit worthy to their buddies.  Thus they get large amounts of credit to spend into the economy while prices are low.  The influx of credit based money eventually chases up prices and the elite sell the assets at a higher price than they paid without actually doing any work to increase the real value of the asset.  The only thing that drives prices up in this game is an ever expanding money supply. Thus, without working they end up with huge amounts of debt-fueled profits.  As a result, they buy high end things like $100k cars and expensive clothing and jewelry.  What normal person has a tesla??  Which middle class people shop at Nordstroms?  The answers are nobody and none respectively.

Most rich people don't even understand the mechanics of how it got so easy for them to get richer.  They simply believe they are that much smarter and better than the next guy. Their hour of labor, they believe, is naturally worth 10x or 100x that of a Mexican laborer even though both have to work hard at what they do all day long in order to receive their pay.  Because of this lack of understanding, most rich people will not keep their wealth when the money supply is finally deflated (the dump part of "pump and dump"). 

Fractionally reserved credit is temporary money.  It comes into existence when "special people" like banks loan it out and it evaporates when the debt is either repaid or defaulted on.  Most rich people do not have real assets; they have Madoffian accounts with balances on paper.  As the credit portion of the money supply shrinks we will see that those whose fortunes were built on fiat currency and fractional reserve banking will be hit the hardest.  Do you think the Mexican laborer who has no stake in the credit game will care if the stock markets crash?  I think not.   They will just continue living by the sweat of their brows just like they always have.   It is the liberal monied elite who are going to see the biggest day of reckoning because those who do not cash their paper wealth out of the debt Ponzi before it goes into collapse will be left holding an empty bag of Wimpy promises.  This is true of paper assets and also of high end physical assets.  The Tesla car and the mansion will plummet in value while the small modest home that was never a bubble in the first place will be relatively unaffected.

And so today I want to highlight the chart of Nordstrom's whose ticker [JWN] reportedly stands for John W Nordstrom.  Of course the other common decoding of JWN, Jewish Women's Network, might serve as a better mnemonic for the ticker symbol.  When the credit is actually in the stress phase it will show up in Nordstrom's stock price just like it did the last time.

Once JWN breaks down that top rail then we are going to begin seeing the market talk about liquidity crises again because JWN shoppers will be seeing their assets plummet in value and thus they will massively restrict their shopping habits.  Until there is fear in JWN and IBB, there is no real market fear at all.