While the Federal Reserve pumps in trillions of cheap money to keep the White Shoe Boys on the Street gambling, it’s a different game for the average American.
Americans are working longer hours, and with “real” wages trending between low and flat the debt burden gets heavier.
Adding to the debt load is transference of debt from previous car loans onto new car loans. This is negative equity: when car owners owe more than what the car is worth – similar to the housing bubble of ‘08 before it burst.
In the first three quarters of 2019, 33 percent of people trading in cars to buy new ones had negative equity, about $5,000 on average – up from $4,000, or 28 percent, five years ago.
When car owners start off with negative equity, their loans tend to have higher monthly payments and interest rates.
In fact, car dealerships make more money from loan financing and extended warranties than they earn on actual vehicles sales.
With student debt and skyrocketing housing prices, and with homelessness increasing, first-time home buyers’ median age is 33, the oldest in records since 1981.
The median age of all homebuyers hit 47, from a median of 31 in 1981.
Those who could find an affordable house in 2018 had a typical income of $93,200. The median household income in the U.S. is around $63,000.
TRENDPOST: America’s top 1 percent now holds almost as much wealth as its middle class. According to the Federal Reserve, the top 1 percent of U.S. households has been enriched by huge returns in the stock market over the past decade.
With $35.4 trillion in assets, the 1 percent is just shy of the $36.9 trillion held by the 50th to 90th percentile of Americans. The bottom 50 percent of households have 35.7 percent of liabilities and just 6.1 percent of assets.
Income inequality will remain not only a major issue in the 2020 Presidential Reality Show, as we have noted, but it is currently, and will continue to be, a major cause of revolts and revolutions sweeping the globe.