Inflation by any other name – Central banks around the world increase balance sheets from $2 trillion in 2008 to $6 trillion in 2013. The slow erosion of purchasing power in the US.
The Federal Reserve has been trying with all its power to stoke inflation. This is not the stated mission and you will not hear this proclaimed over loud speakers but if actions speak louder than words, this is the policy they are following. Yet the Fed is picking winners and losers with their inflation targeting. The reason the CPI for example is not reflecting major changes is the massive wealth destruction that has occurred in the debt markets, particularly with mortgages. In a system like our own, debt is money and there has been an enormous amount of debt that has been destroyed. Yet the Fed has aided the banking system by forcing rates lower and thus keeping asset prices higher for the mistakes taken on during the bubble years. This provides little support for working and middle class Americans. For example, this hurts fixed income savers including our rapidly aging older population. Also, even a modest amount of inflation is destructive should incomes remain stagnant.
American Gerontocracy: Since 2009 2.7 million jobs for those 16 to 55 have been lost yet 4 million jobs were added for those between 55 and 69.
It is still a tough time to be young and looking for work in the United States. With the steady destruction of blue collar industries with living wages, many have to pursue a college degree for any chance at becoming middle class. Yet higher education has become a debt plagued mess where students have to enter selective schools or pick in demand degrees to have any fighting chance in the economy. The rest go into deep debt for what is now worthless paper. Yet it is understandable for young Americans to take this risk given the weak prospects in the market for those without a college education. The recent jobs reports are more proof of the great divide that is happening in our nation based on age. Since 2009, the economy has lost about 2.7 million jobs for those between the ages of 16 to 55. However, the offset has come from adding 4 million jobs in the age range of 55 to 69. Welcome to the American Gerontocracy.
Retirement no more: Median net worth at lowest level since 1969 recent study finds.
There may be a temporary jubilee with the notion that the fiscal cliff has been deferred for a few months. The media is quick to accept anything for a victory but very little has been done to stop our marching path onward on this massive debt spiral. Many Americans continue to live in poverty with no visible exit. The latest figures show over 47 million Americans on food assistance. Many Americans as they enter their golden years are coming to fully rely on Social Security, a system that was on the table for being cut in the recent debates. Since the Fed is creating asset bubbles and destroying fixed income investments, many older Americans are realizing that retirement is no longer a viable option given the rising costs in food, healthcare, and once again housing. I see this on a monthly basis where you can spot older Americans in non-traditional and many times, temporary employment roles. None of this intervention is ending up in household income. In fact, when we examine real wealth the net worth of American’s is down to the lowest levels since 1969 when adjusting for inflation.
How much do Americans earn? What is the average US income and other income figures. Fiscal cliff talks only useful in context of incomes.
With talk of the fiscal cliff taking up most of the headlines it is probably useful to look at income figures for Americans. The media rarely discusses income because it is a touchy subject. It probably would not be savvy in a marketing sense to tell viewers that their incomes have been stuck in the financial mud for well over a decade. Household incomes in the US have been stagnant for well over a decade. Real income growth has largely occurred in the top 10 percent of US households. This is why we are seeing the middle class shrink in our nation. Over 47 million Americans now rely on food stamps. It would be useful if all this talk about the fiscal cliff actually examined the nuts and bolts of US household income.