 |
The wealth gap between America’s upper and middle classes just hit an all-time high…
CNNMoney reports median net worth for middle-class households stagnated at $96,500 from 2010 to 2013. Upper-class households’ median net worth increased to $639,400 from $595,300 over the same time. The average upper-class family now has 6.6 times more wealth than the average middle-class family. That’s up from 4.1 times in 1998 and 3.4 times in 1983. It’s also a new record of 69 times the wealth of the lower class.
If you’re ready to blame the tax code for the growing disparity, think again. The leading cause of the gap is the United States’ central bank, the Federal Reserve (the Fed). The Fed has followed an unprecedented program of “quantitative easing” (banker talk for money printing) since the financial crisis hit in 2008.
That’s driven a massive boom in the stock and bond markets… assets held most often by the wealthiest Americans households. Most middle-class wealth is held in real estate (i.e., their own houses)… which has witnessed a “splotchy” recovery across various markets throughout the U.S.
Bottom line: Expect U.S. wealth inequality to increase until U.S. monetary policy changes. The Federal Reserve perpetuates the “boom and bust” cycle through its inflationary policies. This benefits the richest (whose asset prices rise) at the expense of middle-class savers and the poor (whose disposable income drops). For more information on this mother of all wealth stealers, read Mark’s essay “Clever Ways Banks Filch Your Money.”