AMERICA’S NET WORTH COULD SEE ANOTHER FINANCIAL CRISIS
…This man is once again, not telling
Americans the truth
The U.S. has had had the worst drop in its
net worth since the 2008 financial crisis.
We all know that our president lies on a
daily basis. But one lie that he keeps
spouting is about how good the US economy is doing.
Well, if you know anything about economics,
you know that a critical financial issue is a nation’s net worth. National net worth, is the total sum of the
value of a nation's assets minus its liabilities
As of last year, the United States net worth
had the worst drop in its net worth since the 2008 financial crisis.
Here are the years and the percentages of the
largest drops in our nation’s net worth in the last two decades:
- Q4 – 2008 a loss of 6%
- Q3 – 2011 a loss of 3.4%
- Q4 – 2018 a loss of 3.5%
That net worth loss in December of 2018, had
a dollar value of $3.73 Trillion
The United States has the highest net worth
in the world and it holds 30.96% of the world’s net worth. The whole of Europe’s net worth (EU) has the 2nd
place percentage at 26.93% of the world’s net worth. China is in 3rd place with 16.36%
of the world’s net worth. To put things
in perspective, Russia’s net worth in 2018 was in 17th place with
less than 3% of the world’s net worth.
These percentages refer to the total value of
net worth possessed by all of the citizens of a nation. This figure is an important indicator of a
nation's ability to take on debt and sustain spending and is
influenced not only by real estate prices, equity market prices, financial
exchange rates, and the financial liabilities of the adult population. But it also includes human resources and
technological advancements.
National net worth can fluctuate, as
evidenced in the United States data following the 2008 financial
crisis and subsequent economic recovery.
As stated, the 2018 per capita wealth of the Americans' net worth
fell at the worst level in the fourth quarter of 2018, since that 2008
financial crisis. This occurred, as
sliding stock market prices ate into the household balance sheet.
Net worth dropped to $104.3 trillion as 2018
came to an end. That’s a decrease of $3.73 trillion from the third quarter
of 2018. This is according to figures
released by the US Federal Reserve. The fall amounted to a drop of 3.5%.
Much of the slide came due to Wall Street's woes, as the stock market
suffered a decline that started in October 2018, and that briefly reached Bear Market status. Equities skidded as investors began to fear
that the Fed would keep raising interest rates as economic conditions began to
deteriorate.
By the time the market drop ended in late
December, households saw $4.6 Trillion
worth of equity value totally disappear.
However, the decline was somewhat offset by a $300 billion increase in US real estate value. The overall move was
the second-highest quarterly dollar drop since the Fed began tracking this statistic.
After suffering their worst Christmas Eve in history, US stocks
staged a turnaround. For March, 2019,
the Dow Jones Industrial Average is today off about 1.6%.
The fall in net worth came during a quarter
when GDP rose only 2.6%. That was part of a year that saw
national growth of 3%, despite a
lackluster period for the financial markets.
Economists largely expect 2019 to have very little growth in the economy, as the Fed sees GDP up just 0.5%.
So, why am I getting into all this economic
data?
This is to show that the US economy is no
where near what our president keeps saying it is, and that we could easily slip
into another Great Recession if
things continue as they are today.
Nuff said.
Copyright G. Ater 2019
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