This is utter nonsense. The excess liquidity created by U.S. monetary policy does not wind up in the hands of the poor. It winds up in the hands of the rich. The rich then put it into stocks, real estate, hedge funds, and art.
It’s actually the poor and lower middle classes whose wealth — such as it is –lies fallow in no-interest bank accounts or wealth-eroding cash if they have no bank account at all. It’s not the rich, but middle-class retirees that try to eke out a living on low-yield interest rates.
Krugman has it exactly, 180-degrees wrong. Cheap money is a transfer payment to the rich. It is a tax on the poor. The rich-poor divide grew vast under the cheap money policies of Ben Bernanke. This trend will surely accelerate under Janet Yellen.
You had me at me at Krugman is an idiot, but the larger point is also true – it has been the wealthy and Wall Street that have flourished under the Zero Interest Rate regime. Run of the mill savers and retirees are being killed by the lack of yield in their meager accounts and inflation.