For 45 years – until Alan Greenspan in 1994 – the average wealth-to-income of American households had held steady around 4.9x – but as of Q4 2016, for the first time in US history, household wealth has reached a point where it is 6.5 times large than inflation-adjusted household disposable income in America.
As Bloomberg reports, the surge – driven by higher stock prices and property values, according to The Fed – pushed this measure of relative exuberance (think of it as the country's price-to-earnings ratio) above the housing boom peak of mid-2000s and well above the dot-com bubble driven highs of the last 1990s.
As Alliance Bernstein economist Joe Carson wrote in a note: "Economic and financial history do not always repeat, but sometimes they do."
So the question is – what happens next?
via http://ift.tt/2mu7CNU Tyler Durden