Household Net Worth

[agman]

For the readers. Agman

Debt Be Not Proud?
Actually, when compared with household net worth, it's of little concern.

By Jerry Bowyer

Would you judge the status of someone's personal finances without even looking at his assets? Probably not. But that hasn't stopped the mainstream media from obsessing over the level of debt of the average American family, which they only look at in a vacuum, completely ignoring the growth of family net worth.

According to the Federal Reserve's "Flow of Funds" report, released last month, the net worth of the American household (measured as assets minus liabilities) stands at a robust $51 trillion — yes, that's trillion with a "T." This isn't just higher than last year (or the year before that; or the year before that). It's almost twice what it was in 1995 and over 27 percent higher than it was in 1998 — right in the middle of Clinton's "economic miracle."

In other words, American households may be borrowing more today, but they're acquiring even more assets. And thanks to low interest rates they're borrowing in an environment that is particularly friendly to borrowing.

The result of all this is the highest level of household wealth in our nation's history

I'll take Buffett and Greenspan over him, too.

It's leveraged. They own their assets on margin. That cuts both ways. Make more gain in inflationary times. More risk if things go bad.

Well if they own those assets on margin they must not be leveraged very much as NET ASSETS are $51 Trillion plus. Do you understand "NET". It is the difference between total assets values minus debt equals net assets.

 

[agman]

Agman, this is a joke.....RIGHT????????????? :???: :? :???:

Surely there are still memories of the 1990s stock market asset bubble that went POP!!!!!!!!

The 1980 land asset bubble that went POP!!!!!!!!!

Sorry Econ, not old enough to remember the 1929 crash. :lol:

The total amount of a debt is owed regardless of the value of the assets that were borrowed against. Asset values are largely a fictitious value until they are sold for cold hard cash. It's like holding $7.50 beans waiting on $10.00 and selling for $5.00!

If Americans are so wealthy, why aren't they buying more beef?????
Why are daily kill numbers flirting with going below 100,000?

No it is not a joke RM. It is a fact just as during the mid eighties farm crisis 50% of farmers had no debt at all. Unfortunately positive news seldom if ever makes the news. The few who could not manage their business made the headlines with their whining.

The strength of this great economy is that its diversity lends itself to rolling recessions. The most recent was the IT bubble and prolonged recession in that industry. To suggest the present is anything remotely close to 1929 is the JOKE. There is never a shortage of doomsayers who are always wrong.

Why aren't Americans buying more beef? Because there are cheaper substitutes that represent better value to them-that is why. That represents opportunity for the beef industry in my view or you can stick your head in the sand, join R-Calf, and complain which accomplishes nothing. Also remember that consumption by itself does not measure demand. Beef demand is up substantilly since 1998.

 

[Econ101]

Agman, this is a joke.....RIGHT????????????? :???: :? :???:

Surely there are still memories of the 1990s stock market asset bubble that went POP!!!!!!!!

The 1980 land asset bubble that went POP!!!!!!!!!

Sorry Econ, not old enough to remember the 1929 crash. :lol:

The total amount of a debt is owed regardless of the value of the assets that were borrowed against. Asset values are largely a fictitious value until they are sold for cold hard cash. It's like holding $7.50 beans waiting on $10.00 and selling for $5.00!

If Americans are so wealthy, why aren't they buying more beef?????
Why are daily kill numbers flirting with going below 100,000?

No it is not a joke RM. It is a fact just as during the mid eighties farm crisis 50% of farmers had no debt at all. Unfortunately positive news seldom if ever makes the news. The few who could not manage their business made the headlines with their whining.

The strength of this great economy is that its diversity lends itself to rolling recessions. The most recent was the IT bubble and prolonged recession in that industry. To suggest the present is anything remotely close to 1929 is the JOKE. There is never a shortage of doomsayers who are always wrong.

Why aren't Americans buying more beef? Because there are cheaper substitutes that represent better value to them-that is why. That represents opportunity for the beef industry in my view or you can stick your head in the sand, join R-Calf, and complain which accomplishes nothing. Also remember that consumption by itself does not measure demand. Beef demand is up substantilly since 1998.

Is it over chicken, Agman?

The comparison with 1929 was in the irrational exhuberance and leverage, both of which you seem to be full of. There is nothing remote about the comparison.

Today we have a government that has continually borrowed from the social security trust fund to fund the govt.. They don't even count that borrowing when talking about the deficit anymore.

Tell me this, Agman, would it be better off for our country if our social security surplus had been borrowed by industry instead of the government? (Don't tell me the legal requirement, I already know it) Right now we have a situation where the social security surplus was borrowed by the fed. govt. (which leaves unfunded liabilities for baby boomers). On top of that, the fed. govt. has borrowed from the rest of the world to fund the aforementioned deficit. All of that is money that has to be paid back. Are we better off going into the baby boomer's ss liability with that money already gone?

Telling the truth is not fear mongering. It allows you to do something about reality instead of ignoring it.