Free Market, Quantitative Easing, Asset Price Inflation and Inequality – Will Separate Asset Currency Help?

The market economy progresses on the strength of human drive for income and accumulation. Income earned through rules-permitted activities brings prosperity. But for some economic agents, violation of laws and rules offers easier ways to earn income and wealth. The agents of law-enforcing authority may also patronize such violation, out of sheer greed. This process brings turmoil in the system and the authority tries to manage this tendency by following easy money policy. The outcome is asset price inflation and inequality of income and wealth. Gradually the system becomes vulnerable to economic, social and political crisis.This paper argues that one possible way to manage the asset price inflation without hurting the real economic growth is to introduce a separate currency for asset transactions. This helps in tracking asset price inflation better and gives the central bank an additional instrument to address macroeconomic problem of inequality and asset price bubble