![]() These total private "household net worth" figures are reported in the Fed's Flow of Funds report, page 2 and Table B.101 it stands now, Q2 of 2021, at $140.668 trillion. What is happening? The ratio wealth/GDP is at an all-time high. Output is 20, savings per year grows by 10. The average GDP (economic output) for 5 years was $20.193 trillion. Between 2016 to 2021 total “household net worth” in the US increased from $87 trillion to $140 trillion, a $53 trillion increase about $10 trillion per year. ![]() ![]() $53 trillion in new wealth was created in 5 years between 20. Then growth would accelerate while inflation would fall. Once it fades, so, too, will the supply bottlenecks, provided that new virulent variants do not emerge. According to this view, the recent stagflationary episode is driven largely by the impact of the Delta variant. Wall Street analysts and most policymakers anticipate a “Goldilocks” scenario of stronger growth alongside moderating inflation in line with central banks’ 2% target. The four scenarios depend on whether growth accelerates or decelerates, and on whether inflation remains persistently higher or slows down. Bond yields have fallen in the last few months and the recent equity-market correction has been modest so far, perhaps reflecting hopes that the mild stagflation will prove temporary. ![]() The recovery in the first half of 2021 has given way recently to sharply slower growth and a surge of inflation well above the 2% target of central banks, owing to the effects of the Delta variant, supply bottlenecks in both goods and labor markets, and shortages of some commodities, intermediate inputs, final goods, and labor. NEW YORK – How will the global economy and markets evolve over the next year? There are four scenarios that could follow the “ mild stagflation” of the last few months. ![]()
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