Well, we’ve recently on the average lost the last decade’s growth of personal assets.
Household Net Worth, according to the Fed, is down $14 trillion from its peak in 2007, and as the chart above illustrates, is down to levels very much like those of the 1990s when we were just beginning to emerge from a painful recession.
All over the country, current bad times have forced families to dip into savings, to sell equities at drastically reduced values, and to liquidate real estate in a very unfavorable market.
The impact of Barack Obama’s spending binge, of course, and the new regime of government regulation, intrusion, and control over the economy is really still yet to be felt.
Arthur Laffer, in the Wall Street Journal, contemplates what government has done so far, and shudders at the consequences yet to come.
It’s difficult to estimate the magnitude of the inflationary and interest-rate consequences of the Fed’s actions because, frankly, we haven’t ever seen anything like this in the U.S. To date what’s happened is potentially far more inflationary than were the monetary policies of the 1970s, when the prime interest rate peaked at 21.5% and inflation peaked in the low double digits. Gold prices went from $35 per ounce to $850 per ounce, and the dollar collapsed on the foreign exchanges. It wasn’t a pretty picture.