Another quarter, and another confirmation that in the New Normal only the rich get richer, pardon: richest.
Earlier today the Fed released its latest Flow of Funds report, which showed that in the first quarter household net worth rose from last quarter’s $80.3 trillion to a new record high of $81.8 trillion, driven by a $1.5 trillion increase in total assets while household liabilities were virtually unchanged in the quarter. And since the Fed is onboarding all the liabilities why should households bother with debt: that’s what the central bank balance sheet is for.
As for the proceeds, they go to the mega rich: of the $81.8 trillion in net worth, 70.4% of the total amount or $67.2 trillion, was in financial assets: the higest it has ever been courtesy of just one person: Ben Bernanke, and to a far lesser extent Janet Yellen who however is tasked with picking up Bernanke’s pieces. Additionally, while housing values rise to $22.8 trillion, or a $0.8 trillion increase, now that the second US housing bubble has burst look for this number to deflate without ever having hit its prior all time highs of $25 trillion from Q4 2006.