Posted on 06/18/2013 5:50:17 AM PDT by SeekAndFind
In the economic history of our time, June 6, 2013, ought to occupy a special place. That’s the day the Federal Reserve disclosed that the net worth of American households — the value of what they own minus what they owe — hit $70 trillion, a record that exceeded the previous peak before the 2007-09 financial crisis. Higher stock prices and a long-awaited housing recovery are slowly restoring Americans’ lost wealth. By all rights, this symbolic crossing ought to improve confidence, prompt consumers to spend more freely and increase the economy’s growth.
Maybe it will. But don’t hold your breath.
The “wealth effect” isn’t what it used to be. For those who have forgotten, this refers to households’ tendency to spend some part of their increased real estate and stock market wealth and thereby boost the economy. During the boom years, Americans borrowed lavishly against rapidly appreciating home values. One Federal Reserve study estimated the extra cash at $700 billion annually from 2001 to 2005. Now psychology has changed. Careless optimism has given way to stubborn cautiousness. Wealth gains don’t translate into similar amounts of higher spending.
(Excerpt) Read more at washingtonpost.com ...
Its mostly paper wealth due to overvalued stocks
What are you going to buy? Real estate that has a better than 50-50 shot of declining in value? Crappy eco cars that have been designed by green czars in the Obama Administration? Moochelle-approved Healthy For You foods? Hyper-queer clothing from the overstock sale at JC Penney?
Refi happens today...
Getting out of an arm to a higher rate, but lower than a one year “adjustment”.
There will come a day, and it comes closer, when Mr. Chu, screaming and wetting himself will be judged by the people he so despises.
Protect the seed corn.
American industry.
Start buying now. Or you may be too late.
i used to put a lot of stuff out for the trash but now, the trash company will only take 96 gallons of trash ea week! I told them if you want a nice city you take all the trash people put out, I told them to bill me for anything I put out that was over the limit, but they said “That’s not how it works.” They further said it was a county “law”. I laughed and said counties don’t get to have “laws” only states do. No matter, they won’t pick it up
tools, land, skills, etc - hard to liquidate to pay off the “gimmedats”.
“You’ve made enough money” -Obama
I’m spending my wealth as fast as I can. The problem is that the shelves that are supposed to hold ammo and guns are nearly empty, so it’s hard to spend on what we need under the current regime.
Maybe. I said exactly that a couple years ago and I was wrong. I won't be wrong forever, but it could be a while longer.
The media (as an arm of the government and business) does everything it can to promote debt based consumerism.
Maybe some portion of Americans are waking up to the fact that there is more to life than endlessly buying stuff.
It’s really simple....the stock market is not real. It is merely a reflection of the QE policy / printing money policy. It will most likely collapse by up to 30% in the next year or so. Housing is NOT recovering and banks are dragging their feet on issuing new mortgages to people who are AAA credit worthy. PEOPLE HAVE NO CONFIDENCE IN THE FUTURE UNDER OBAMA AND HIS COMMIE POLICIES. AMERICA IS HEADING TOWARDS FINANCIAL COLLAPSE. Simple as that. Only when America becomes fiscally responsible, eliminates the socialist programs and creates jobs by getting us back on track will we stand a chance of resuming America greatness. Otherwise we are DETROIT on a national level.
Wealth gains don’t translate into similar amounts of higher spending.
Well, why not. Afterall, we didn’t make that. It’s the government’s money. Sez so right there on the dollar bills. /s
And that number may well continue steadily to increase even as actual assets decrease in real value. The soaring of the stock market and the increase in RE values is arguably merely the primary price effect of the current inflation.
The aren’t spending it because the present trajectory of events and policy scares every rational person stiff. Moreover, this trajectory takes us right into Rampant Inflation Land, that means the direct destruction of all wealth stored in any form of money.
And anyone taking an ARM for more than a year is sitting on a powder keg.
Maybe. I said exactly that a couple years ago and I was wrong. I won’t be wrong forever, but it could be a while longer.
Financial crisis
2008 - 2016
Been doing that GL.
I give a bunch of stuff to the vets almost monthly.
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