Americans saw $1.3 trillion of wealth vaporize in the first quarter of 2009, as the stock market and home values continued to decline, according to a government report released Thursday.
Household net worth fell to $50.4 trillion, according to the flow of funds report by the Federal Reserve. Americans' stock holdings plunged 5.8% to $5.2 trillion and mutual funds holdings slid 4.1% to $3.3 trillion, while their home value dropped 2.4% to $17.9 trillio
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Gary North / LewRockwell.com | June 10, 2009
"In the long run, we are all dead but our children will be left to pick up the tab." ~ Thomas Hoenig, Federal Reserve Bank of Kansas City
Thomas Hoenig is the president of the Federal Reserve Bank of Kansas City. In a recent speech, he laid out a scenario for what the Federal Reserve ought to do and what the U.S. government ought to do, and what will happen if they refuse. You can read it here.
Everyone from the Fed bank of San Francisco to Kiplinger’s is saying that we may have a "jobless recovery".
The meaning of the phrase jobless recovery itself is simple:
A jobless recovery or jobless growth is a phrase used by economists to describe the recovery from a recession which does not produce strong growth in employment. The phrase originated in the early 1990s in the United States, to describe the economic recovery at the end of President George H.W. Bush’s term; it came back into use during the early 2000s.
But what is the deeper meaning of a jobless recovery now?
The government has spent more than $12 trillion dollars responding to the financial crisis. But the overwhelming majority of that money has gone to big banks and big corporations.
Obama’s stimulus plan calls for $787 billion dollars in spending. That amounts to less than 7% of the government’s crisis spending.
The fact that much of the stimulus bill is really pork reduces that number still further. And while Obama might throw more stimulus money into the system, independent experts say that total government spending could rise to $20 trillion dollars, so the percentage might substantially decline.
What these figures show is that the government has given well over 90% of the taxpayers’ money to the richest companies and well under 10% for job-creation programs.
Therefore, the "jobless recovery" is really a massive redistribution of wealth from the little guy to the big boys (see this and this).
Via Infowars
The Federal Reserve appears to be increasingly nervous about the long term bond market. This is serious. How panicked are they? After leaking a story on Friday, they are back at it on Sunday.
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| The Fed can of course print money to buy up every Treasury bond in existence, but the inflationary ramifications would be Zimbabwe like, and crush the dollar on international currency markets. | |
The Federal Reserve leaked to CNBC’s Steve Liesman on Friday that they weren’t targeting long rates. Why such a leak? Probably because the Fed did not want to appear impotent in controlling the long rate. So they put out the word through Liesman that they weren’t targetting the long rate. Can you imagine what would happen to the markets if it sensed long rates were beyond the control of the Fed?
The Fed can of course print money to buy up every Treasury bond in existence, but the inflationary ramifications would be Zimbabwe like, and crush the dollar on international currency markets. Are we near the phase where all hell breaks loose? I have never even answered, maybe, to this question before. It’s always been, “no.” Now it’s maybe.
What really has me spooked is another article out this afternoon (on a Sunday) that Drudge has even picked up. It’s a Reuters story by Alister Bull. The headline: Federal Reserve puzzled by yield curve steepening.
Translation, the Fed doesn’t know what is going on, but they are really scared.
Here’s more from Bull:
The Federal Reserve is studying significant moves in the U.S. government bond market last week that could have big implications for the central bank’s strategy to combat the country’s recession.
But the Fed is not really sure what is driving the sharp rise in long-dated bond yields, and especially a widening gap between short and long term yields.
Do rising U.S. Treasury yields and a steepening yield curve suggest an economic recovery is more certain, meaning less need for safe haven government bonds and a healthy demand for credit? If so, there might be less need for the Fed to expand the money supply by buying more U.S. Treasuries.
