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Americans Poorest Since 2008

December 8, 2011

foreclosed-homes-recordThe wealth of Americans wealth suffered its biggest quarterly loss in more than two years as stocks, pension funds and home values lost value this last quarter. Household net worth fell 4 percent to $57.4 trillion in the July-September quarter according to the Federal Reserve. This has been the sharpest drop since the October-December quarter of 2008 and the second straight quarterly decline, lending more evidence to a second part of the double dip recession-depression that the some experts have expected.

Many foreclosures have been delayed because of a government investigation into mortgage lending practices. That won’t continue because millions of homes are substantially past-due on mortgages. Mortgage debt is declining because so many Americans are defaulting on payments.

The value of Americans’ stock portfolios fell 5.2 percent last quarter. Home values dropped 0.6 percent, which continue to be artificially inflated by the finance industry. During this financial blight, multinational corporations continue to sock greenbacks away to the tune of $2.1 trillion last quarter.

Who is spending most? The richest 20 percent represent about 40 percent of consumer spending, if that means anything. Stock and bond wealth is held by the richest Americans, who also account for a disproportionate amount of consumer spending. Eighty percent of stocks belong to the richest 10 percent of Americans. Does this suggest you should stay with Wall Street investment or is the world looking at another financial bubble destined to explode. My report tomorrow should give you some ideas.

For most Americans, declining wealth is combined with stagnant incomes. Since consumers allegedly create 70 percent of economic activity, the picture isn’t rosy. For those that have wealth, it’s all on paper, based on a system without a basis for wealth. The dollar and the bankers that print them continually actually means less value, not more. Despite dollar stores and discount prices, your dollar doesn’t stretch as far, a plight that plays out each year. Inflation continues as well, whether official figures show that inflation or not. International bankers don’t have an answer beyond printing more greenbacks, known as quantitative easing.

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