US Household Wealth Hits Record $130 Trillion As "Top 1%" Have Never Been Richer While Poor Drown In Debt

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The Fed's latest Flow of Funds report released at noon today showed the latest snapshot of the US "household" sector as of Dec 31 2020, which confirmed that not long after the biggest drop in household net worth on record when $8 trillion was wiped out in Q1, 2020, in the 4th quarter of 2020, the net worth of US households soared by $6.93 trillion - the second biggest quarterly increase in history - to a record $130.2 trillion.

The bottom line is that (especially if one ignores the debt - which clearly will be monetized or hyperinflated by the Fed before it all comes crashing down) the US economy has never been stronger. And while it would be great news if wealth across all of America had indeed risen as much as the Fed claims, the reality is that there is a big catch: as shown previously, virtually all of the net worth, and associated increase thereof, has only benefited a handful of the wealthiest Americans.

According to a record Census Bureau report, over the past decade, during an economic expansion that benefited most Americans, the richest made out the best. In fact, the CB found that the top 5% of households - those making $451,122 on average last year - have seen their inflation-adjusted incomes jump 28% since 2009.

The gain - which helped push inequality to the widest in decades - compares with a mere 11% rise for the bottom 20%, whose income rose to about $15,290 from roughly $13,800 a decade ago. Those in the middle groups - who made between $40,600 and $111,100 last year - saw their incomes rise between 16% to 18%, the data show.

And there - as we say quarter after quarter- is your "recovery": the wealthy have never been wealthier, while half of America, some 50% of households, own just 1% of the country's wealth, down from 3% in 1989. And finally, America's poor have never been more in debt.