it *must* be under the mattresses

from the federal reserve.






3 responses to “it *must* be under the mattresses”

  1. gimaha Avatar

    A little something from Robert J. Samuelson
    “Lower interest rates-mainly reflecting lower inflation-have driven up stocks and home prices. Stocks became more appealing next to interest-bearing deposits;lower mortgage rates made higher home prices more affordable. From 1985 to March of this year, Americans’ mutual funds and stocks rose from $1.3 trillion to $10 trillion;over the same period, real estate values jumped from $4.6 trillion to $17.7 trillion. Once you consider these value changes, most Americans don’t look so irresponsible…..Their net worth…contintues to grow.”
    While he goes on to warn that asset values may fall and rising debt burdens will have to be faced eventually, the picture may not be as ominous as your chart indicates.
    So, E, the money may not be under the mattress, it might be fueling that lovely rise in your apple stock!

  2. eric Avatar

    samulelson’s figures include the current bubble. until the correction occurs, they aren’t really meaningful. they also do not include the frictional costs of home ownership.

    when you look at other data, the picture that emerges is not necessarily one of burgeoning wealth, but of burgeoning debt and living month to month. americans are much more leveraged, and the collateral is in many cases the valuation of their homes. things already look shaky, if the housing market comes down, it will be much more so.

    reread this article

    the American consumer is overextended and, short of selling his soul, has few new avenues open to increase his spending ability. The average US family spends $1.22 for every dollar it earns, has 13 credit cards and $9,312 in credit card debt – twice as much as 10 years ago, according to CardWeb.

  3. gimaha Avatar

    Lots of people have credit cards, but that doesn’t mean that they are using them on a regular basis. The $9,312 credit card debt is another matter. Listen the swimming pool needs to be resurfaced……..Can I hit you up for a loan?

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