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Top 1% Gains More Wealth Than GDPs Of Japan, Germany, UK, France, India, & Italy Combined; Bottom 50% – You Get Nothing

Top 1% Gains More Wealth Than GDPs Of Japan, Germany, UK, France, India, & Italy Combined; Bottom 50% – You Get Nothing

Authored by Charles…

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This article was originally published by Zero Hedge

Top 1% Gains More Wealth Than GDPs Of Japan, Germany, UK, France, India, & Italy Combined; Bottom 50% – You Get Nothing

Authored by Charles Hugh Smith via OfTwoMinds blog,

Given that political power in America is a pay-to-play auction in which the highest bidder wins, how this incomprehensibly lopsided ownership of wealth plays out is an open question.

Wealth inequality easily falls into an abstraction unless we contextualize it in meaningful ways. I’ve annotated two St. Louis Federal Reserve (FRED) charts–the net worth of America’s top 1% and the net worth of America’s bottom 50% of households, roughly 66 million households–to show their net worth and their share of all household net worth, and put this in the context of inflation and GDP (gross domestic product) of the U.S. and other nations.

These charts may look complicated but the idea is actually pretty simple: I’ve noted how each group (the top 1% and the bottom 50%) did at the top and bottom of each bubble: the dot-com bubble in 2000, the stock/housing bubble that topped in 2007, and the current bubble, noting the pre-pandemic data at the end of 2019 and the most recent totals (2nd quarter 2021).

Next, I pose a simple question: if the net worth of each group had tracked the growth of America’s GDP (i.e. its real economy), where would its net worth be now? All else being equal, the assumption that net worth would rise more or less in lockstep with the expansion of the entire economy makes sense.

I note both the dollar amount of each group’s net worth and their share of total household wealth to track their slice of wealth relative to the entire pie of wealth and to each other’s slice. In other words, as the net worth pie expands, does each group expand its share of the pie or not?

What we find is a stunning asymmetry: if the top 1%’s net worth has risen along with GDP since 2000, it would now be about $21 trillion. Instead, it’s now over $43 trillion, a $22 trillion gain above where it would be had it tracked GDP growth.

For context, this is larger than the GDP of the U.S. ($21 trillion) and the combined GDPs of the six largest economies behind the U.S. and China: Japan, Germany, UK, France, India and Italy which total about $20 trillion. It’s more than the nominal GDPs of China and Japan.

In other words, the $22 trillion gained by America’s top 1% as a result of Federal Reserve bubble-blowing is literally beyond comprehension: s sum larger than entire economies, a sum totally disconnected from America’s real-world economic expansion.

Note that the top 1%’s share of total wealth has increased with every bubble: even as the pie of wealth expanded, the top 1%’s share has increased to roughly one-third of all wealth, which includes vehicles, homes, financial assets, etc. (The top 1% owns the majority of all financial assets.)

In comparison, the bottom 50%, despite recent gains resulting from the housing bubble, has only tracked GDP: where the top 1% more than doubled its wealth above where it would have been had it risen along with GDP, the bottom 50% have barely kept up with GDP’s expansion. If it wasn’t for the current housing bubble, the bottom 50%’s wealth wouldn’t even have kept up with GDP.

The bottom 50% has lost ground in terms of its share of total household net worth: its already-marginal 3.3% of total wealth in 2000 has slipped to an inconsequential (i.e. signal-noise) 2.3%.

If the bottom 50% had maintained its meager 3.3% share, its net worth would be higher by $1.6 trillion–1% of the total net worth of U.S. households ($160 trillion). That’s 50% higher than its current net worth of $3 trillion.

Note how the housing bubble bursting in 2008-09 basically destroyed the wealth of the bottom 50% whose primary asset (if any) is a home. Net worth of the bottom 50%–over 60 million households– fell to a near-zero $185 billion in 2011 at the nadir of the housing market.

The top 1%’s fortunes have climbed in a series of higher lows and much higher highs: each spot of bother (collapse of the bubble du jour) dented the net worth of the top 1%, but their wealth never even declined to previous troughs. At the bottom of the oh-so horrendous market drop in 2020, the top 1%’s wealth was still double what it had been at the trough in 2009, $30 trillion vs. $15 trillion.

All of this upward shift of wealth accelerates as we approach the apex of wealth-power: a handful of billionaires own more than the bottom 50% (by some measures, the asymmetry is even worse than depicted by FRED data.)

Given that political power in America is a pay-to-play auction in which the highest bidder wins, how this incomprehensibly lopsided ownership of wealth plays out is an open question. The pendulum of wealth-power concentration has reached an extreme, and when it swings back, it will reach an equally extreme position at the other end of the spectrum.

*  *  *

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My recent books:

A Hacker’s Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World (Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

Tyler Durden
Thu, 11/18/2021 – 16:20



Author: Tyler Durden

Economics

Inflation Never Mattered Much For Crypto… Until About A Year Ago

Inflation Never Mattered Much For Crypto… Until About A Year Ago

Inflation never mattered much for crypto… until about a year ago.

As…

Inflation Never Mattered Much For Crypto… Until About A Year Ago

Inflation never mattered much for crypto… until about a year ago.

As UBS notes in its latest Crypto Keys note last week, forward-looking measures of US consumer prices today rank among the most prominent correlations for digital assets…

…. something we first pointed out a month ago.

Sensitivity to actual data prints is also mounting accordingly…

… and as UBS notes, BTC, ETH and a range of more established tokens screen statistically on par with traditional instruments that are considered classic inflation winners or losers.

Co-movement is weaker for newer coins like BNB as well as ADA, SOL, DOT and AVAX, which have strongly outperformed in 2021, along with meme plays like DOGE. But to UBS that seems encouraging rather than surprising when idiosyncratic factors have clearly been driving their price action.

But while inflation clearly has be driving the top cryptocurrencies in the past year, the risk now according to UBS is that more powerful drivers will emerge to dislodge the status quo. Potential candidates could be things like stablecoin regulation, tighter exchange and account registration requirements reducing activity in CeFi and DeFi, and new restrictions on bank participation, all of which could be near-term negatives affecting market liquidity and activity but longer-term positives paving the way for institutional participation. While such things may sound crypto-specific, they mirror conditions that govern how conventional inflation hedging instruments behave. 

Tyler Durden
Sun, 11/28/2021 – 19:00

Author: Tyler Durden

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Economics

Hillary: “Americans Just Don’t Appreciate What Joe Has Done For Them”

Hillary: "Americans Just Don’t Appreciate What Joe Has Done For Them"

Via 21stCenturyWire.com,

This might be the longest-ever Thanksgiving…

Hillary: “Americans Just Don’t Appreciate What Joe Has Done For Them”

Via 21stCenturyWire.com,

This might be the longest-ever Thanksgiving weekend for Joe Biden. While he’s been enjoying a warm blanket and a hot cup of Ovaltine with his family in Nantucket, the President’s poll numbers have been in virtual free-fall. It seems that the nation is fast losing confidence in his ability to handle important issues like the economy, the border, foreign policy and crime running wild on America’s streets. In short, the majority of Americans, both Democrat and Republican, do not believe Joe is capable of fulfilling his duties as the chief executive of the world’s premier superpower.

At present, Biden’s average job approval rating stands at around 40%, a steep drop from the 55% percent average approval rating he enjoyed last May.

No one really knows just how low Joe will go.

Still, this hasn’t stopped his ardent allies from rushing to his defense, and blaming his flagging numbers on social media trolls (see deplorables).

Carlos Garcia from The Blaze writes…

Former presidential candidate Hillary Clinton tried to explain away President Joe Biden’s poor polling by accusing Americans of not appreciating what Biden has done for them, and blamed social media.

Clinton made the comments while a guest on Rachel Maddow’s MSNBC show Tuesday evening.

“You know, democracy is messy. You know, a lot of people got, oh I think, kind of frustrated looking at the messy process of legislation,” said Clinton.

“And they didn’t really appreciate that, within a year, the Biden administration has passed two major pieces of legislation through both the House and the Senate, they passed another major piece through the House that will be soon be in the Senate,” she continued.

“By any measure those are extraordinary accomplishments and they really will help many millions of Americans with healthcare and prescription drug prices, as well as climate change and so much else,” said Clinton.

“But because of the way we are getting our information today,” she concluded, “and because of the lack of gatekeepers and people who have a historic perspective who can help us understand what we are seeing, there is a real vulnerability in the electorate to the kind of demagoguery and disinformation that, unfortunately, the other side is really good at exploiting.”

Both Maddow and Clinton accused Republicans of undermining the results of fair elections and calling for violence as a political solution in the interview.

Biden’s poll numbers have suffered greatly after a cascade of damaging incidents plaguing his administration. Among the worst were the disastrous retreat from Afghanistan, the painful cost of high inflation, and the crisis of illegal immigration at the border.

One poll from October found that only 38% of Americans thought Biden deserved a positive job rating.

Watch Hillary’s clip here: 

Tyler Durden
Sun, 11/28/2021 – 17:30

Author: Tyler Durden

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Economics

Silver price under pressure despite the risk-off sentiment

Silver price extended the week’s losses in Friday’s session despite the risk-off market sentiment. In the coming week, focus will be on Fed policymakers’…

Silver price extended the week’s losses in Friday’s session despite the risk-off market sentiment. In the coming week, focus will be on Fed policymakers’ remarks and data related to its industrial and precious metal status.

Market mood

The fear & greed index shifted from a greed level of 64 to the fear end of the spectrum. On Friday, the index’s reading was at 31. Both the market volatility and safe-haven demand are exhibiting extreme fear. Usually, risk aversion boosts precious metals based on their safe-haven status.

However, a strengthening US dollar is exerting pressure on silver price. Concerns over the new wave of COVID-19, coupled with positive economic data from the US, boosted the dollar index to its highest level since July 2020. Besides, slowed growth of the Chinese economy has raised concerns over silver’s industrial demand.

In the new week, silver price will be reacting to manufacturing PMI from China and other economies. Besides, investors will be keen on Jerome Powell’s testimony as well as speeches from various Fed policymakers. The speeches come a few days after Fed meeting minutes that exuded a hawkish tone. The nonfarm payrolls data scheduled for Friday will further influence the metal’s price movements.

Silver price technical outlook

Silver price has been under pressure over the past week. The week’s losses defined a trend reversal after the precious metal hit a four-month high in the previous week. Since Monday, it has dropped by about 6.89%.

The precious metal ended the week at 23.17; down by 1.83%. On a four-hour chart, it is trading below the 25 and 50-day exponential moving averages. Besides, with an RSI of 26, it is in the overbought territory.

In the coming week, I expect silver price to remain under pressure amid the strengthening US dollar. However, it may begin the week on a corrective rebound as it finds support along the psychological level of 23.00.

It may bounce back to find resistance along the 25-day EMA at 23.72. Subsequently, it may trade within the formed horizontal channel with 23.16 and 23.72 as the lower and upper borders respectively. Above the aforementioned resistance level, the bulls will be eyeing the 50-day EMA at 24.03. On the flip side, a move below Friday’s low of 22.94 will likely place the support zone at 22.35.

silver price
silver price

The post Silver price under pressure despite the risk-off sentiment appeared first on Invezz.





Author: Faith Maina

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