July 27, 2017 – Fort Russ News –
The authorities can play with the stock market indicators, bond yields, they can manipulate various economic data, but in a reality the economic situation in the US is very different.
This is particularly true for the main drivers of the economy, (taking into account inflation) real household incomes and real disposable household income, that is, the income left after servicing debt, renting, co-financing health care and insurance, and other significant expenses, are not what they appear to be.
If one would like to predict the future of the US economy, take a look at the real income of households.
If real income is experiencing stagnation or falls, households cannot afford to take on more debts or additional costs.
The masters of economics have replaced incomes lost during inflation and economic stagnation, debt over the past 17 years. They managed to do this by lowering interest rates (and thereby reducing interest payments), allowing households to take on more debts (and therefore buy more) with the same monthly payments for debts, Zerohedge.com writes with reference to the American economist and popular writer Charles Hugh Smith.
But this little financial fraud eventually tightens the noose around the neck: in the end, the rise in the cost of living absorbs that amount of household income that the household cannot legally afford additional debts even at almost zero interest rates.
For this reason, the real income of the household will dictate the future of the economy. If household incomes remain at the same level or fall, large-scale economic success is impossible.
The masters of economics played another financial game to disguise the fall in real incomes: they inflated asset bubbles to enhance the illusion of wealth. This is a form of financial witchcraft called the “wealth effect”: households that see their shares and bond funds inflating by 50% or 100% for several years begin to feel that this phantom “wealth” is permanent and therefore it can be spent freely in the present.
The problem is that only 5% of the population owns enough of their own assets to fully experience the full benefits of asset bubbles. This is one of the reasons why 5% of the population with the highest income level is separated from the remaining 95% of the population – a trend that is evident from the data of this schedule compiled by the astute Doug Short.