The US Is Officially A Banana Republic: The Top 1% Now Own More Wealth Than The Entire Middle Class

In some ways, we sympathize with Neel Kashkari's fake "Concern" about the unprecedented wealth inequality that has emerged in the US in recent years and which has resulted in a slow, methodical and relentless destruction of the US middle class ... or rather make that precedented because there was another time when the top 0.1% had amassed as much wealth and it was just before the Great Depression.

We find Kashkari's "Jaw-dropping" virtue signalling proposal to grant the Fed wealth redistribution power not only laughable but absolutely terrifying: after all it was the Fed's ZIRP and QE that was behind the greatest wealth redistribution in the past decade.... ... a redistribution that started almost 50 years ago, when Nixon decided to end the Fed's biggest nemesis - the US gold standard - launching an unprecedented increase in income growth for the "Top 1%", even as the income of the "Bottom 90%" has remained unchanged ever since 1971.

As we showed back in November 2019, it may already be too late to fix the US: as the following stunning chart shows, the US is already effectively a banana republic if one defines such a nation as one which has a small but ultrapowerful and unaccountable kleptocracy which gets richer year after year by stealing from the rapidly shrinking middle class.

What is just as stunning: according to the OECD, more than half of the countries in question have a more vibrant middle class than the US. Alas, since November 2019 it has only gotten worse... much worse because as a result of the unprecedented wealth redistribution unleashed by the covid pandemic, America's has truly cemented its banana republic status as the wealth of the top 1% exploded as a direct result of the Fed pumping trillions into the stock market and levitating asset values, while the lower and middle classes stagnated.

Two weeks ago, when discussing the latest US record household net worth number, which hit an all time high of $142 trillion or up $31 trillion since Covid, we showed that it would be great if this wealth increase was spread evenly across most Americans, but unfortunately, most Americans have not benefited from recent gains in wealth.

All of which brings us to the latest update from the Fed on Household Wealth distribution published on Friday and covering the second quarter of 2021, and which revealed yet another jawdropping fact about America's full transformation into a banana republic.

According to the Fed data, which breaks down the distribution of wealth according to income quintile with a special carve out for the top 1%, the middle 60% of US households by income - a measure economists use as a definition of the middle class - saw their combined assets drop from 26.7% to 26.6% of national wealth as of June, the lowest in Federal Reserve data, while for the first time the super rich had a bigger share, at 27%. While especially true for the top 1%, it is all the rich that have benefited at the expense of the extinction of the US middle class - as the next chart shows, over the past 30 years, 10 percentage points of American wealth has shifted to the top 20% of earners, who now hold 70% of the total.

https://www.zerohedge.com/markets/us-officially-banana-republic-top-1-now-own-more-wealth-entire-middle-class