Stock Preacher

Household wealth in the USA increased by US$2R in the Q-2 Y 2009, ending the biggest slump on record. Net worth for households and non-profit groups climbed to US$53.1T from US$51.1T in Q-1, marking the first gain since Q-3 Y 2007, according to the Federal Reserve’s Flow of Funds report yesterday in Washington, DC. The government began keeping quarterly records in 1952. The advance reflected the biggest quarterly jump in stock prices since 1998 and the first increase in home values in more than two years. Together with increased savings and less debt, the gain in wealth is part of the mending process consumers will undergo in coming years before spending can gain speed. Supplemented by federal stimulus measures such as the cash- for-clunkers program, tax credits and extended jobless benefits, consumer spending this quarter has started to improve following the biggest slump since 1980. Read more

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In China the Government owns the Banks; the bankers do not own the Government. China’s stimulus plan is working better than in the US and the UK because the government is using the banks for public ends, rather than allowing the banks to use the government for private ends. In the USA, the banks are the most powerful lobby on Capitol Hill; they own the Government.

The USA is spending trillions of greenbacks to bail out its banking system, leaving its economy to languish, as China, now called a “miracle economy,” decoupled from the rest of the world, is maintaining a phenomenal 8% annual growth rate. That, by the way, is being questioned by lots of Pols, commentators, economists and other talking heads, as they ask how that growth is possible, when other countries relying heavily on exports have suffered major downturns and remain in the doldrums. Read more

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