The most over-inflated sector in our economy is the stock market. It is supported directly by the Federal Reserve, which last year allocated itself an unbudgeted pool of $12 trillion to invest in equities.

This inflation feeds directly back into prices. First, by acting as a buyer of last resort, the Fed allows risk-free repurchase of shares from individual owners, which covers for the transfer of shareholder wealth to executives through stock purchase options. This leads, ultimately, to corporate consolidation, and thus higher prices. Secondly, to maintain valuation against unicorn and goldilock stocks, profits must be driven higher.

The perverseness of the dynamic is evident in the fact that the gazillionaires do not dare cash in on their stocks, knowing that the valuation would collapse. Instead, they finance their lifestyles by borrowing at preferential rates, securing their loans with their stock holdings.

In this regime, the common consumer will be crushed unless the government intervenes in the marketplace. We have two choices: price regulation or taxation of wealth.