by Tyler Durden at ZeroHedge
Citing estimates from JPMorgan, over the weekend Bloomberg wrote that courtesy of a Biden administration terrified of what soaring inflation will mean for the Democrats in the midterms, and a Fed that is determine to do anything – even crash the market and spark a recession – to do Joe Biden’s “kill inflation” bidding, the US faces a new scary threat: a plunge in wealth which JPM estimates at least $5 trillion, and could reach $9 trillion by year-end.
In short, the world’s richest nation is waking up to an unpleasant and unfamiliar sensation: It’s getting poorer… and worst of all, it’s getting poorer at the behest of its own leaders.
Since the start of the year, the S&P 500 Index is down 18%, the Nasdaq 100 has lost 27% and a Bloomberg index of cryptocurrencies has plunged 48%. That all amounts to “a wealth shock that is set to drag on growth in the coming year,” JPMorgan economists led by Michael Feroli wrote in a note Friday.
Of course, this is not news to regular readers who have known about this one unpleasant side-effect of Biden’s phobia for higher prices: we pointed out as much almost two weeks ago.
$20 trillion in household net worth wiped out in 2022
— zerohedge (@zerohedge) May 11, 2022
We do however disagree with JPMorgan that “only” $5 trillion has been lost so far: as the following chart shows, US household net worth – which consists almost entirely of financial assets (and a smattering of real estate) – tracks the S&P with an almost 1.000 correlation. Well, that means that with the S&P briefly entering a bear market on Friday and sliding approximately 20% from its all time high, reached just a few days into 2022 when US net worth hit $150 trillion, it means that US households have seen about $20 trillion in net worth disappear in 2022 under Joe Biden, a loss far greater than under any other US president in history…
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