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.
Finally, since financial assets will continue to grow, if mostly on paper for the foreseeable future until the Fed, ECB and BOJ are done "reflating", we expect that some time in the next 2-3 quarters, total US household assets will hit the unprecedented amount of $100 trillion, all thanks to the global brotherhood of central bankers.
And now you know why the Fed can not possibly allow any hiccups on the road to trickle down Fed balance sheet nirvana. If only for the 1%.
The historical breakdown of the US household balance sheet:
And a snapshot of household assets and liabilities in the first quarter: