Average U.S. Household Far From Regaining Its Wealth

On Tusday the DJIA set a record high.

Too bad most American citizens aren't able yet to reparticipate in the wealth sharing: Average US household far from regaining its wealth

The average U.S. household has a long way to go to recover the wealth it lost to the Great Recession, a report by the Federal Reserve Bank of St. Louis concluded Thursday.

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Not that anyone's tremendously surprised, as so many millions of American citizens' jobs went to non-American-citizens in the chaos, the sub-prime securities fiasco being set by the sub-primers jobs being out-sourced.

And, of course, with all that wage-slave labor now fueling the industrials, it's not surprising that the Dow would break a record.

But, despite government propaganda left and right, it is a bit surprising just how little recession-lost wealth Americans have recovered:

Household wealth plunged $16 trillion from the third quarter of 2007 through the first quarter of 2009. By the final three months of 2012, American households as a group had regained $14.7 billion.

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Wow -- lost 16 trillion dollars, regained only 14.7 billion???

Yet once those figures are adjusted for inflation and population growth, the average household has recovered only 45 percent of its wealth, the St. Louis Fed concluded.

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Oh, I see .. yeah, that makes sense .. .. .. actually, I don't get it -- inflation and population growth can't account for such a discrepancy. Something's not right.

That suggests that consumer spending could remain modest as many Americans try to rebuild their wealth by saving more and paying off debts.

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No, duh!

Despite the rosy picture of recovery politicos and sellers like to paint as they pander for votes and purchases respectively, reality is still biting most American citizens rather painfully in the body wallet pocket.

Recovery for international conglomerates, yeah, that's obviously happening in "the south will rise again!" style, thanks to the lowered cost of hiring wage-slaves.

But clearly, American citizens en masse simply are not carpetbagging much of that for themselves.

And, again, why is that surprising? After all, neither liberals or conservatives have really done anything whatsoever to expedite American citizen recovery.

So conditions remain bleak for most Americans .. as jobless claims are apparently rising again .. and most Americans haven't recouped the wealth to survive another downturn.

Tick tock, citizens .. .. tick tock.

Most households that lost money lost it in their home value. That said, I distrust this run. I think the big boys are creating a boom and then will drop the hammer on the small investors at some point.

Fisher said:

Most households that lost money lost it in their home value. That said, I distrust this run. I think the big boys are creating a boom and then will drop the hammer on the small investors at some point.

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Well, the fact of the matter is that the problems that caused the crisis were never truly dealt with, thus we can only expect a larger, more painful crisis to come at some point in the future.

Fisher said:

Most households that lost money lost it in their home value. That said, I distrust this run. I think the big boys are creating a boom and then will drop the hammer on the small investors at some point.

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The DJIA will continue to rise, perhaps reaching 20,000, provided the economy in Europe continues to stagnate, China continues to stagnate, companies continue to hold cash in large amounts and the Fed keeps flooding the economy with dollars and keeping interest rates low. There's no place else for people to invest and get a decent return other than stocks and no better place than the Dow.

It will burst eventually, and take a big drop, but it will never go back to the lows seen in 2008/2009 and the wave will take you a long way for the next year or so - hop on and enjoy the climb.

Mr. Invisible said:

Well, the fact of the matter is that the problems that caused the crisis were never truly dealt with, thus we can only expect a larger, more painful crisis to come at some point in the future.

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This is very true - the TARP funds that Bush and congress put in place in late 2008, a large part of which were supposed to be used to buy up bad mortgage debt allowing people to keep their homes at reduced values and affordable mortgage payments, weren't used for that purpose at all and the Obama administration has yet to put a program in place to deal with it and now it's basically too late. I don't know why they didn't act, but they didn't - but they sure acted fast to save the UAW jobs of their friends in the auto industry, using those TARP funds.

Mr. Invisible said:

Well, the fact of the matter is that the problems that caused the crisis were never truly dealt with, thus we can only expect a larger, more painful crisis to come at some point in the future.

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This I know. The larger more painful crisis to come is called the inevitable Bond Bubble.

CanadaJohn said:

The DJIA will continue to rise, perhaps reaching 20,000, provided the economy in Europe continues to stagnate, China continues to stagnate, companies continue to hold cash in large amounts and the Fed keeps flooding the economy with dollars and keeping interest rates low. There's no place else for people to invest and get a decent return other than stocks and no better place than the Dow.

It will burst eventually, and take a big drop, but it will never go back to the lows seen in 2008/2009 and the wave will take you a long way for the next year or so - hop on and enjoy the climb.

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I buy land. If nothing else, I can chase you kids out of my many lots with a broom to pass the time after I can afford to retire in 2436.

CanadaJohn said:

This is very true - the TARP funds that Bush and congress put in place in late 2008, a large part of which were supposed to be used to buy up bad mortgage debt allowing people to keep their homes at reduced values and affordable mortgage payments, weren't used for that purpose at all and the Obama administration has yet to put a program in place to deal with it and now it's basically too late. I don't know why they didn't act, but they didn't - but they sure acted fast to save the UAW jobs of their friends in the auto industry, using those TARP funds.

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Really I would say that in the grand scheme of things, that doesn't matter as it is a systemic problem, not just with the banks, but with the power structures themselves. The politicians, no matter what stripe, are beholden to their corporate masters, thus constituting something of a shadow government, where we have puppets and puppet masters.

We had false wealth in the 90s along with real wealth. In the "zeros", we had mostly false wealth and some real wealth. Now we have no wealth with a few exceptions. We simply need the next bubble so false wealth can be created for the real wealth.

Automation, globalization and insatiable greed has made a problematic environment. So, a stock market bubble would be expected now, maybe we can get a housing bubble going again as well. Watch for it in 9....8....7...