A report released by the Federal Reserve today confirmed what many Americans already knew: that the Great Recession wiped out a significant amount of household wealth, and hit the middle class especially hard. Median net worth in the U.S.A. declined by 38% between 2007 and 2010. These declines in net worth have had a negative impact on consumer spending, which makes up about 70% of the American economy. This reduction in consumer spending, in turn, made the recession longer and deeper, and the recovery painfully slow. “What you see is an economy that’s really very, very stressed for the bottom 60 to 70 percent of the population that’s struggling just to make ends meet,” said Lance Roberts, CEO of Streettalk Advisors LLC.
Federal Reserve Bank of Chicago President Charles Evans made remarks on Bloomberg Television today in favor of more monetary stimulus and quantitative easing. Despite the fact that Evans has held a view that more stimulus is needed for quite some time, his remarks today added fuel to the rally in stock markets today. “This market seems to embrace the idea that flooding the system with money is going to somehow make things better. It’s almost Pavlovian; someone says more stimulus, and boom,” said Mike Shea, managing partner at Direct Access Partners.
At 4 p.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1,610.90, Up $14.10.
- Silver, $29.01, Up $0.31.
- Platinum, $1,455.50, Up $4.20.
- Palladium, $625.00, Down $0.10.