Chart Of The Day: Global Household Assets

Shortly after posting the latest "balance sheet" of the US consumer we received requests to show how this looks in a global context, in other words, what do the balance sheets of the global households outside of the US look like. We show what this look like below, courtesy of the Bank of Japan, which presents the distribution of household financial assets in context then (5 years ago) and now. It also shows why whereas to Joe Sixpack the level of the S&P is the most important, with 32% of total assets in stocks, in Japan and in Europe, the average person could not care less where the stock market is, with just 6.5% and 14.7% of assets held in equities. The US E-Trade baby: keeping the Ponzi dream alive.

As a bonus, here is what the consolidated balance sheets of financial intermediaries in Japan, US and Europe look like. Here, once again, one can see the monster role that deposit-free shadow banking has played in the US as opposed to Europe and Japan, where deposits are orders of magnitude greater than in the US, and where, as a result, the threat of inflation is always much greater should the local central banks go "too far" with monetary easing (unlike in the US where the deleveraging of the deposit-free shadow bank system merely picks up the slack for the Fed's releveraging). For much more on shadow banking see here.


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