I just got done reading the following by Reuters’ Jason Lange about household wealth in America:
The net wealth of U.S. households rose in the third quarter to its highest since late 2007, providing a hopeful sign for future consumer spending.
Net financial wealth grew $1.72 trillion to $64.77 trillion, the Federal Reserve said on Thursday.
That left household wealth $1.2 trillion short of where it stood in the fourth quarter of 2007, just as the economy was sinking into a severe recession. Wealth peaked at $67.3 trillion in the third quarter of that year.
Rising home prices helped drive the increase in the latest quarter. The value of real estate owned by households rose about $300 billion, the Fed said. Stock holdings climbed by about $520 billion.
Increases in wealth could make consumers feel more comfortable spending their money. Many economists think consumers spend a few cents of every dollar they gain in wealth.
(Editor’s note: Italics added for emphasis)
Seeing this reminded me of something “crash prophet” Peter Schiff said back in September about the Fed trying to re-inflate the housing bubble through QE3 in an attempt to revive the floundering U.S. economy. I wrote on September 18:
In his September 14 entry on the The Schiff Report YouTube video blog, Schiff, who correctly-predicted the bursting of the U.S. housing bubble and 2008 global economic crisis, explained to viewers what QE3 was really about:
This is the plan that Ben Bernanke has. Ben Bernanke’s plan to revive the U.S. economy, and create jobs, is to inflate another housing bubble. That’s it. That’s what the Fed’s got. That’s what it came up with. As if the last housing bubble worked out so well for the economy, that the Fed wants an encore…
How is another housing bubble going to solve anything. Now one thing that Ben Bernanke hasn’t figured out yet- it ain’t gonna work. No matter how much he tries, no matter how much air he blows in to that housing market, he’s not going to reflate that bubble. There are simply too many holes in it, and there is no precedent for relating a busted bubble. More likely, all that cheap money is going to go someplace else…
The housing Pollyannas are definitely back, as you’ll read about in a Friday post.
But is housing back?
Lange, Jason. “U.S. household wealth rises to near 2007 high.” Reuters. 6 Dec. 2012. (http://news.yahoo.com/household-wealth-increases-64-77-trillion-172821521–sector.html). 6 Dec. 2012.
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