{"id":65848,"date":"2014-12-30T04:13:37","date_gmt":"2014-12-30T09:13:37","guid":{"rendered":"http:\/\/countingpips.com\/?p=65848"},"modified":"2014-12-30T04:55:03","modified_gmt":"2014-12-30T09:55:03","slug":"wealth-gap-in-america-widest-ever-recorded","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/12\/wealth-gap-in-america-widest-ever-recorded\/","title":{"rendered":"Wealth Gap in America Widest Ever Recorded"},"content":{"rendered":"
December 30, 2014<\/div>
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By WallStreetDaily.com<\/span><\/a> \"Wealth<\/p>\n

By Chris Worthington<\/a>, Editor-in-Chief of Income<\/em><\/p>\n

It\u2019s a good time to be part of the proverbial 1%, that\u2019s for sure.<\/p>\n

A Pew Research Center report shows that the wealth gap between America\u2019s middle- and upper-income families is the widest ever recorded.<\/em><\/p>\n

In fact, the median wealth of America\u2019s most affluent families is nearly seven times that of their middle-income countrymen.<\/p>\n

Here\u2019s a look at the shocking statistics that outline the death of the middle class\u2026<\/p>

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The chart below shows the wealth gap between upper- and middle-income households over the last 30 years:<\/p>\n

\"Wealth<\/p>\n

As if that\u2019s not bad enough, America\u2019s upper-income families have a median net worth that\u2019s 70 times<\/em> greater than lower-income families.<\/p>\n

Meanwhile, net income has remained dismal for years now. It\u2019s no surprise that most Americans aren\u2019t feeling the effects of the economic recovery\u2026 after all, median income is still 8% lower than in 2007, just before the recession.<\/p>\n

On top of that, 81% of counties across the country saw median income peak all the way back in 1999, and for many, inflation-adjusted median income was higher even in 1989<\/em> than it is today.<\/p>\n

A closer look reveals a large disparity between low- and high-income earners, as well. While the bottom fifth of earners have seen their income drop 16% since 1999, the richest fifth have only suffered a 2% decline.<\/p>\n

The Fed Is Partly Responsible<\/h2>\n

It\u2019s hard to pinpoint exactly why wealth inequality has been growing. However, we do know that the Fed has something to do with it.<\/p>\n

First, large-scale bailouts like the Troubled Asset Relief Program (TARP) encourage senseless risk-taking and create moral hazard. Why wouldn\u2019t banks go all in if they knew that, in the worst-case scenario, the American taxpayer would prop them up?<\/p>\n

Yet TARP was just the beginning.<\/p>\n

In recent years, the Fed\u2019s zero-interest-rate policy (ZIRP) and quantitative easing (QE) have transferred a large portion of wealth from average Americans to the upper class.<\/p>\n

Both ZIRP and QE work to push up financial asset prices while facilitating the buildup of leverage (debt) and speculation. While that\u2019s great for wealthy investors, a 2013 Fed survey on consumer finances found that only 48.8% of American families are invested in the stock market (including <\/em>through retirement accounts).<\/p>\n

Therefore, the so-called \u201cwealth effect\u201d of rising stock prices doesn\u2019t help the majority of Americans. Put simply, the rich own stocks and bonds. The poor have debt, including the $1.2 trillion in student loan debt outstanding (a number that\u2019s rising at an astounding rate).<\/p>\n

It\u2019s abundantly clear that tomorrow\u2019s debt slaves will have scant hope of attaining middle-class status. Instead, they\u2019ll be relegated to paying off debt burdens well into their adult lives.<\/p>\n

Guiding the Way<\/h2>\n

Furthermore, the central bank is helping to inflate dangerous bubbles, which eventually become substantial roadblocks to both a comfortable retirement and, ultimately, upper-class wealth.<\/p>\n

Every time a bubble bursts \u2013 just think tech<\/a> and housing <\/a>\u2013 many Americans see their dreams of financial independence evaporate. Only the wealthiest Americans maintain what they\u2019ve accumulated during the bubble.<\/p>\n

That\u2019s a big problem for the average investor, who has likely not recovered from the housing bust and Great Recession, yet is already staring down today\u2019s global high-yield debt bubble.<\/p>\n

Sooner or later, every bubble must burst. Of course, we\u2019ve warned you about reaching for yield<\/a> already, as high-yield bond prices are at record lows and are completely out of whack with their underlying risks. This is turning out to be a prescient call.<\/p>\n

Going forward, we\u2019ll do everything we can to help guide you through this treacherous environment and make sure you\u2019re positioned to come out ahead in 2015.<\/p>\n

Good investing,<\/p>\n

Chris Worthington<\/p>\n

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The post Wealth Gap in America Widest Ever Recorded<\/a> appeared first on Wall Street Daily<\/a>.<\/p>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

By WallStreetDaily.com By Chris Worthington, Editor-in-Chief of Income It\u2019s a good time to be part of the proverbial 1%, that\u2019s for sure. A Pew Research Center report shows that the wealth gap between America\u2019s middle- and upper-income families is the widest ever recorded. In fact, the median wealth of America\u2019s most affluent families is nearly […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-65848","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/65848","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=65848"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/65848\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=65848"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=65848"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=65848"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}