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The Rich Get Richest: Household Net Worth Rises To All Time High Courtesy Of $67 Trillion In Financial Assets

Tyler Durden's picture




 

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:

 

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Thu, 06/05/2014 - 14:37 | 4827553 Kaiser Sousa
Kaiser Sousa's picture

enjoy...

And it’s important to note the U.S. population has grown by about 12.5 million people since 2008. Not all of them will be in the work force, but if the numbers on labor-force participation of that group are similar to what’s seen nationally, that’s another 6 million positions to fill.

The stock market (represented by the S&P 500 total return index) recovered more than two years ago and has been surging since. As measured by GDP, the economy bobbed between the full recovery line before finally pushing through in 2011."

fucking hilarious....

http://blogs.marketwatch.com/capitolreport/2014/06/05/u-s-on-the-verge-o...

Thu, 06/05/2014 - 14:39 | 4827565 huggy_in_london
huggy_in_london's picture

It's shocking... just shocking.

 

Thu, 06/05/2014 - 14:47 | 4827592 Never One Roach
Never One Roach's picture

Pop another bottle of Bubbly, Jamie.....

Thu, 06/05/2014 - 14:49 | 4827598 outamyeffinway
outamyeffinway's picture

Fuck you Fed.

Thu, 06/05/2014 - 14:55 | 4827617 TBT or not TBT
TBT or not TBT's picture

Fuck ALL the central planners.

Thu, 06/05/2014 - 15:01 | 4827632 Landotfree
Landotfree's picture

Sorry but getting rid of the Fed is not going to solve anything, these systems have been going bust before there things called banks, central banks or central planning.

Of course, you can get rid of everyone... collapse and liquidation of the walking unfunded liabilities will get going fairly quicklly... of course, that is going to happen eventually anyway.

Attacking the symptom instead of the problem is misguide, but I do enjoy the entertainment.

 

Thu, 06/05/2014 - 15:07 | 4827649 TBT or not TBT
TBT or not TBT's picture

The fastest growth in the USA occurred in a time when there were competing currencies, competing banks, lax regulation thereof etc. The paper had to be backed by something real or most people would laugh at it as payment. The coins contained valuable metals. Sure there were booms and busts and bank runs and fraud etc, but not systemic, global, centrally planned fraud like we have now.

Thu, 06/05/2014 - 15:19 | 4827677 Landotfree
Landotfree's picture

Irrelevant, any system which is based on attaching interest to your medium of exchange will not be able to overcome basic Math, which is humans can't supply nor demand exponential growth long-term... normally 60-80 years.   Then comes collapse... after which is liquidation of the unfunded walking liabilities... I figure a few billion of you have to go this time. 

Your comments is why I have no hope for humans, or more like you will continue to fall into the same cycle.  I do like watching the rats think they are going to get out by eliminating their competition.   At the end of the day, the game has already played out... you just don't know it yet.   Good luck in changing the laws of the universe, I am pulling for you.

 

The Oracle: Seems like every time we meet I've got nothing but bad news. I'm sorry about that, I surely am. But for what it's worth, you've made a believer out of me. Good luck, kiddo.

 

 

Thu, 06/05/2014 - 14:58 | 4827627 Peter Pan
Peter Pan's picture

The growth in the net worth of the top simply reflects the further impoverishment of those at the bottom. These gains however are illusory for the top 1% but very real and painful for those at the bottom.

Thu, 06/05/2014 - 15:02 | 4827636 TBT or not TBT
TBT or not TBT's picture

Fuck Marxists.

Thu, 06/05/2014 - 15:12 | 4827667 Peter Pan
Peter Pan's picture

I agree but my comment has nothing to do with Marxism. Look up previous posts by ZH which clearly show that the top end of town is sucking in more than 100% of income gains in the economy which clearly shows the disturbing trend of the GDP gains. That is, there is NO increase in GDP if you take out the portion of increases in GDP accruing to the top end of town.

Thu, 06/05/2014 - 15:38 | 4827755 Landotfree
Landotfree's picture

Top pays the bottom from the growth generated from the bottom.   Once the bottom is unable able to demand/supply the needed growth to supply the exponential nature of the equation.... not much the top can do for the bottom.   Collapse and liquidation of the walking unfunded liabilities.  

Thu, 06/05/2014 - 14:57 | 4827622 huggy_in_london
huggy_in_london's picture

Yeah but hell you know.. the day of reckoning is coming for these mofo's.... their revs are crashing

Thu, 06/05/2014 - 14:39 | 4827560 alien-IQ
alien-IQ's picture

Repeat like a mantra: There is NO class war going on. There is NO class war going on. There is NO class war going on.

You will eventually believe it...and you will also believe in unicorns.

Thu, 06/05/2014 - 14:46 | 4827586 DoChenRollingBearing
DoChenRollingBearing's picture

President Obama would like that kind of talk.  Hey!  Maybe there will an opening soon as his mouthpiece!

/s

/LOL

Thu, 06/05/2014 - 14:41 | 4827561 Bunga Bunga
Bunga Bunga's picture

Net worth is just proganda bullshit, it does not exist. When all debt is paid pack there is no money left that could buy assets.

Thu, 06/05/2014 - 14:42 | 4827570 Flakmeister
Flakmeister's picture

Lay off the stupid sauce....

Thu, 06/05/2014 - 14:55 | 4827616 sessinpo
sessinpo's picture

Flakmeister    Lay off the stupid sauce....

---

You've proven you have that market cornered.

Thu, 06/05/2014 - 15:03 | 4827641 Landotfree
Landotfree's picture

BB statement makes zero factual sense.  For BB to be correct, there must be access and control of unlimited power.   Good luck with that.

Thu, 06/05/2014 - 18:12 | 4828233 Flakmeister
Flakmeister's picture

Quit trying to flatter yourself by playing for greenies from the peanut gallery...

I should make a list of all the completely asinine statements you have made on easy verified matters of fact...

Thu, 06/05/2014 - 14:44 | 4827576 alien-IQ
alien-IQ's picture

are you suggesting that you believe all debt will someday miraculously be paid off?

Thu, 06/05/2014 - 14:44 | 4827577 DoChenRollingBearing
DoChenRollingBearing's picture

Yes, debt is very dangerous.  It would be better to get OUT of debt (hint: spend less) and buy items of intrinsic value (gold, productive land, bearings, etc.).

Holding some CA$H is fine, very good even.  As long as at least some of it is not in the bank.

Thu, 06/05/2014 - 14:51 | 4827604 Landotfree
Landotfree's picture

Once a debt/credit system based on interest (ie exponential growth) is created then not enough debt is dangerous.   You are already all in, just as Hank said back in 2008, whether you choose to be or not.   There is no out. 

 

 

Thu, 06/05/2014 - 14:39 | 4827563 IronShield
IronShield's picture

Here comes the boom...  Because the majority are always right.

Do I really need a /s?

Thu, 06/05/2014 - 14:41 | 4827568 Flakmeister
Flakmeister's picture

R > G, Bitchez....

Thu, 06/05/2014 - 14:58 | 4827624 machineh
machineh's picture

... except after C [crash].

Thu, 06/05/2014 - 18:13 | 4828234 Flakmeister
Flakmeister's picture

Not that it matters then as the next real crash will likely be the last...

Thu, 06/05/2014 - 14:42 | 4827573 i_call_you_my_base
i_call_you_my_base's picture

The oligarchy implements policies that benefit themselves. Big surprise.

Thu, 06/05/2014 - 14:45 | 4827580 Itchy and Scratchy
Itchy and Scratchy's picture

Mo' money ...mo' problems. - Biggie Smalls

Thu, 06/05/2014 - 14:55 | 4827615 krispkritter
krispkritter's picture

I got 99 problems and being rich ain't one...

Thu, 06/05/2014 - 15:56 | 4827829 Itchy and Scratchy
Itchy and Scratchy's picture

Just think tho ... no income tax audit! :)

Thu, 06/05/2014 - 16:07 | 4827879 BrosephStiglitz
BrosephStiglitz's picture

Tune. I miss the '90s.

Thu, 06/05/2014 - 14:51 | 4827588 Sudden Debt
Sudden Debt's picture

People think that war creates wealth because a lot needs to be rebuild.
But this is wrong.
The reason war creates wealth is because the old wealth from the top of society is destroyed and equality is created.
Everybdy get's a new shot in rebuilding.
But when there's a rich elite on top... forget about it.
They have it already all cornered and there's no way normal people who aren't rich can make it anymore. The control he industry, housing and politics. Just like they do now.

So in order to create the economy we had in the 60/70's where everybody got a shot. We must first destroy the top layers.
And for some that will be painfull and they will defend it by any means. But as long as they control everything, we'll all keep sliding down.

In the 1900, the top 5% controlled 95% of all assets. After 1945, 90% of the population controlled 90% of all wealth and everybody increased their wealth. So forget about working harder and shit because that's BS.
The poor where also looked at as lazy and stupid in the 1900's.

So higher real estate prices, lower wages, inflation that's higher than income increases, lowering education standards, higher debtlevels... it all happened before and we're not at the top yet. But the top of supreme wealth on top is nasty for the rest of all of us. You're very rich or you're poor.

Thu, 06/05/2014 - 14:51 | 4827606 ParkAveFlasher
ParkAveFlasher's picture

Everyboy didn't get a shot in 60s/70s.  Everybody got shot in the 60s/70s.  Minor quibble.  BTW your icon is my kids' favorite, who is it?  yes I do read ZH with the kids on the lap.

Thu, 06/05/2014 - 15:00 | 4827623 TBT or not TBT
TBT or not TBT's picture

In Cambodia, yes. Pol Pot was big on the whole income inequality thing.

Thu, 06/05/2014 - 19:43 | 4828502 I need Another Beer
I need Another Beer's picture

Yep, the K'mer Rouge had targets. Same here

Thu, 06/05/2014 - 15:09 | 4827657 Suisse
Suisse's picture

His avatar is domo-kun.

http://en.wikipedia.org/wiki/Domo_(NHK)

Thu, 06/05/2014 - 16:13 | 4827904 BrosephStiglitz
BrosephStiglitz's picture

After World War 2 was the greatest narrowing (lowest variability) of wealth distribution in Europe.  Mostly because everyone was bankrupt.

But vested interests remain.  Unless you go full blown Mafia and snuff out the politically powerful and their families, the well connected tend to get a supreme first mover advantage when capital is accumulated once more.

Thu, 06/05/2014 - 14:49 | 4827595 Landotfree
Landotfree's picture

Bunga Bunga

All debt in the system = all credit in the system.

How can all debt be paid back... it can't... as you have create more debt to pay for he prior.

Thu, 06/05/2014 - 14:49 | 4827596 IronShield
IronShield's picture

Oh, and of course they won't be impacted by bail-ins; coming soon...

Another /s?  NOT.

Thu, 06/05/2014 - 14:58 | 4827628 sessinpo
sessinpo's picture

IronShield    Oh, and of course they won't be impacted by bail-ins; coming soon...

Another /s?  NOT.

----

You have an issue with the sarc tag.  The question is whether people think you are stupid and aren't sarcastic or some readers do not understand your sarcasm. Get over it.

Thu, 06/05/2014 - 17:02 | 4828052 IronShield
IronShield's picture

Uh, and you apparently have an issue with making stupid comments.  There's something in yo po and it's called yo head.  Try pulling it out and make sure there's a popping sound; dip shit.

Thu, 06/05/2014 - 14:59 | 4827629 savedeposit
savedeposit's picture

How rich are you with a bullet in your head, or bungeling on a rope attached to a pole or tree

Not sustainable !!

Thu, 06/05/2014 - 15:02 | 4827637 sessinpo
sessinpo's picture

savedeposit   How rich are you with a bullet in your head, or bungeling on a rope attached to a pole or tree

Not sustainable !!

---

Bought into class warfare have you? Those with less then you are thinking just what you posted. Now you have a target on your back  (or head).

Thu, 06/05/2014 - 15:08 | 4827650 savedeposit
savedeposit's picture

Well mister, its not a threat only an obeservation.

When rich get richer and poor get poorer, in the end it always ends this way sooner or later

Like I said NOT sustainable !!

Thu, 06/05/2014 - 15:17 | 4827679 sessinpo
sessinpo's picture

savedeposit    Well mister, its not a threat only an obeservation.

When rich get richer and poor get poorer, in the end it always ends this way sooner or later

Like I said NOT sustainable !!

---

Well mister, then maybe you should understand simple mathematics.

If I have 100 million in assets that earn me 100k annually. I am pretty much set.  I can continue to increase my asset holdings and wealth.

This is something the poor does not understand, and thus why they remain poor. Is that the fault of the rich? And keep in mind that their is always someone poorer then you, thus they view you as evil.

And I never said your post is a threat. That is an emotional leftist tactic. It's an observation, as you say.

Thu, 06/05/2014 - 15:30 | 4827724 savedeposit
savedeposit's picture

Wow respect, thats a lot, good for you

I am not saying it is your fault, if I where in your position I probably would say the same.

You know what, you are right, the poor don't understand thats why they are poor right !

Good luck with your world view.

We will see how this all will end one day

Thu, 06/05/2014 - 17:08 | 4828070 IronShield
IronShield's picture

"If I have 100 million in assets that earn me 100k annually."

Yep, another stupid comment and apparently no grasp for investing/economics (which is probably why you're here making stoopid comments).  If making 100k annually on 100 million you have got to be the dumbest fuker on the farm.  Try thinking before you type your stoopid shi-ite.

Thu, 06/05/2014 - 18:17 | 4828251 Flakmeister
Flakmeister's picture

You are well aware that the idiot in question has an excellent track record of being obtuse...

Thu, 06/05/2014 - 15:00 | 4827633 Its_the_economy...
Its_the_economy_stupid's picture

When the paper all burns, the rich will get pretty darn poor too.

Thu, 06/05/2014 - 15:08 | 4827655 sessinpo
sessinpo's picture

Its_the_economy...    When the paper all burns, the rich will get pretty darn poor too.

----

That's odd. Historically, the rich remain rich compared to the rest of us. In the Great Depression, there were very few rich in the bread lines. No, instead, the rich had economic mobility. They were moved their assets to safer places while the rest of us had no choices.

When the SHTF, it is always the main poplace that bears the brunt of it. And if I were super rich with, let's say 100 million, and I lost 90% so I only had 10 million. Compare that to a person that has 100K and loses 90% and now only has 10k. The rich person is still doing alright comparatively. Get the point?

Thu, 06/05/2014 - 15:19 | 4827656 Chuck Knoblauch
Chuck Knoblauch's picture

It's so typical to focus on one side of the balance sheet, the assets, without considering the debt.

The assets are paper gains, most illiquid, sitting in a pension account or a house.

CNBC says - Take out a home equity loan!

Bloomerg says - Borrow against your pension!

The markets are going up forever!

You sad, pathetic fools.

I wish I knew what amount of debt will trigger the collapse.

If I did, I'd short every major index ASAP!

Leaving millions without a chair when the music stops.

The paper gains will go away, but the debt always remains.

 

 

 

 

 

Thu, 06/05/2014 - 15:51 | 4827795 financialrealist
financialrealist's picture

absolutley...everything is hinged on the same artificial assets...pensions beneficaires have the worst...all those promised benefits are toast...

Thu, 06/05/2014 - 18:14 | 4828235 Chuck Knoblauch
Chuck Knoblauch's picture

They know the risks.

I will have no sympathy for their losses.

Neither will the bank when it's time to pay your bill.

Thu, 06/05/2014 - 16:24 | 4827940 BrosephStiglitz
BrosephStiglitz's picture

There is even a bias against debt in economics models and textbooks.  To me it is fundamental to political predictions, to most economists it isn't even a consideration.

There is a huge risk bias in financial and academic literature.  Everything is yield, yield, yield and opportunity cost being the cost of poor portfolio allocation.  Don't build a rickety house on the edge of a swamp though.  First you pick firm ground, excavate, lay a solid foundation and from there you can build an enduring structure.  In a similar manner investment should focus upon a solid base of cleverly managed capital.  Then you build the investments on top.

Thu, 06/05/2014 - 15:11 | 4827663 ejmoosa
ejmoosa's picture

It's all relative.  The rich have appeared to be getting richer because the poor are getting poorer even faster.

 

This economy was engineered for this purpose.

 

Obama has implied it many times.  You cannot have a socialist revolution with a content middle class.

Thu, 06/05/2014 - 15:26 | 4827709 Chuck Knoblauch
Chuck Knoblauch's picture

This supposed new wealth is an illusion because it's not liquid.

Unless you borrow against it.

I wouldn't suggest doing that.

Maybe it's worth taking the 10% penalty, and paying tax on the entire distribution.

Convert the cash to Rubles.

Move to South America.

Thu, 06/05/2014 - 15:20 | 4827696 youngman
youngman's picture

I feel stupid....I am not in this market...I just dont believe it....but it keeps going up and up and up...I had no idea the central banks could push it this far...but I think it goes even higher now...as they are all in it now...all central banks are pushing it higher...the only way it stops is when other countries no longer want our paper....and trades without us

Thu, 06/05/2014 - 15:37 | 4827715 Chuck Knoblauch
Chuck Knoblauch's picture

You wont feel stupid after the November elections.

If there is no law in the country, I'd be more concerned about government confiscation.

Agenda 21 calls for more bankruptcies, more forced selling to destroy private property rights in America.

So, a major correction is inevitable.

The Globalists have a plan for America.

It's called Agenda 21.

 

Thu, 06/05/2014 - 15:46 | 4827740 financialrealist
financialrealist's picture

I have missed it too...but am confident I will have the opportunity to buy at a 50% discount at a minimum.  financial assets (the majority of the net worth) is an illusion...its all made up.  This too will end...

Thu, 06/05/2014 - 15:51 | 4827807 NOTaREALmerican
NOTaREALmerican's picture

Survival of the fittest, Bitchezzzz!!!! 

Thu, 06/05/2014 - 15:52 | 4827811 Chuck Knoblauch
Chuck Knoblauch's picture

Gamble your college money!

Place it all on Netflix for the win.

Thu, 06/05/2014 - 16:06 | 4827873 I Write Code
I Write Code's picture

Right, they announce "household wealth hits new record high!" when, if you subtract off the 1%, the other 99% is hitting a new *low*.

Thu, 06/05/2014 - 16:11 | 4827899 NOTaREALmerican
NOTaREALmerican's picture

No, the top 10% are doing really great too.    The Loser Class are those below (about) 70%, but their kids are definitely above average so they'll make-up for it in the long run; as long as they stay patriotic.  

Thu, 06/05/2014 - 19:07 | 4828400 I Write Code
I Write Code's picture

I'd have to see some numbers on that, I'd think that in reality you could peel off just the top 0.01% and the rest would go negative.  It's probably a curve - top 2% might still be doing better (if only on real estate), get to 5% and already they'd just be holding steady, and at 9% already be falling slightly.  But you have to break them out at this very fine level, or else lumping in that top 0.01% biases all the results.

Thu, 06/05/2014 - 18:47 | 4828340 Chuck Knoblauch
Chuck Knoblauch's picture

ASSETS - LIABILITIES = NET WORTH

Paper gains are not assets, only wishful thinking.

Paper debts are very real indeed.

Thu, 06/05/2014 - 22:24 | 4828866 RaceToTheBottom
RaceToTheBottom's picture

It is, perhaps, unfair to not give the Greenspam any credit for the mess we find ourselves.  He laid the groundwork.

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