Ben Bernanke AP

Albert Edwards, the skeptical strategist at Societe Generale, has a lengthy note discussing America's inequality problem.

In 10-pages, he cites the works of numerous economists including Joseph Stiglitz and points to the concerns of the wealthy and influential like Warren Buffett, Bill Gross, and Stanley Druckenmiller.

Few will question that the U.S. faces an inequality problem.

But what are the implications?

"[A] growing number of economists suspect that once inequality passes a certain point it may jeopardize economic stability and economic growth," wrote Edwards. "You don’t have to be a communist to conclude that high levels of inequality not only adversely affects long-term growth, but also increases the economy’s vulnerability to recession."

But if this is so, then why aren't we already experiencing that instability?

Edwards reiterates a conspiracy theory that he's been talking about for a few years. Specifically, he believes the Fed is inflating a housing bubble to create an illusion of wealth among the less wealthy. From his note (emphasis added):





This, obviously is not sustainable.  Here's Edwards (emphasis added):




"What society needs to grow in an economically optimal fashion is not equality of outcomes, but equality of opportunity," wrote Edwards.
