The Fed's quarterly Z.1 Flow of Funds report is is a very interesting report that among other things provides a 'snapshot' of the Household (B.100) and non-Financial Corporate (B.102)Sectors balance sheets.
Here is a link to the Balance Sheet reports from September 30, 2008, just before the Great Financial Crash, and here is a link to the most recent report from 30 March, 2010.
I suggest that you open each of these reports in separate browser tabs and you can just click back and forth between them and compare the balance sheet assets and the composition of both of the above mentioned sectors from back then until currently.
We always hear from the mainstream about how the Government is "borrowing money" from the "private sector" to fund its "spending". Over the time span between the publication of these 2 reports we are told to believe that the Government has "borrowed" almost 3 Trillion dollars!
Cue 'The Prospector': They're borrowin' from our grandchildren! Spendin'!
Well if this is so, how could both of these sectors have increased their bank account balances over this time of supposed record "borrowing" by the Treasury?
Sector:...........................2008 Bank Accounts..................2010 Bank Accounts
Household
B.100 Line 9...................................$7,598.........................................$7,651
NF-Corporate
B.102 Lines 8,9,10..........................$1,250........................................$1,445
The Fed here shows how the bank account balances of both the Household and non-Financial Corporate Sectors has grown by a combined $298B since the Government has supposedly gone on a mad "borrowing" spree. If this is so, who did they "borrow" the money from? Who took the $3 Trillion out of their bank accounts and "loaned" it to them? (And don't tell me "the banks"! LOL!) BTW, both sectors total holdings of Financial Assets have also net increased over the same time period, you can see.
As Tom Cruise's "Jerry Maguire" character famously shouted: 'Shoooow meee the moneeey!'
When I grew up in the 70's nobody complained about the deficit run up in the war(s) in 40's and 50's.
ReplyDeleteWe all basked in freedom of the assets created, we did not knock off our grandparents.
Similarly young adults today knocking off the 80's due to the massive, MASSIVE spending of Reagan?
No, basking in the freedom to buy Chinese plastic crap at Walmart or expensive variants of the opposite.
Goog,
ReplyDeleteWell said!
"Surely, you must be joking Mr Feynman"
ReplyDelete