Main Street is hurt when the government prints money – money, beyond its replacement schedule.
Imagine you discover and buy a private island that has, unknown to the seller but known to you, an almost limitless supply of gold.
Little by little you bring the gold to the market and receive the current market price.
You are happy.
Unfortunately, the little-by-little process does not generate the money you desire so a change in strategy ensues: You flood the market with millions and millions of ounces of gold.
With the new strategy implemented, the world’s supply of gold dramatically increases, the market takes note (supply and demand), and the value of gold drops.
Our federal government is like the owner of our imaginary island. The difference is that its gold is paper and printing presses, that is the ability to print money.
When the federal government prints money (beyond its replacement schedule) its first recipients profit and the others take the hit.
For example, the feds injected $3.5 trillion into the economy from 2008 – 2014: Quantitative Easing (QE). As Jeff Kearns noted, “the idea behind QE is that you don’t need a printing press to add money to an ailing economy,” (The Fed Eases Off, Bloomberg QuickTake, updated Sept 16, 2015).
“A former Fed official who executed the bond purchase, Andrew Huzar, charged that ‘while there had only been trivial relief for Main Street, the U.S. central bank’s bond purchases had been an absolute coup for Wall Street,'” (Jeff Kearns, The Fed Eases Off, Bloomberg QuickTake, updated Sept 16, 2015).
Eventually, the printed money will filter down to Main Street (and the rest of the world) and its hard earned dollars will be worth less.