Death comes to us all. Life's but a walking shadow | I went back to the original Fred data to check just exactly what was what. I couldn't get the original FRED graphs to save so I had to download the two data sets & regraphed them but it's clear that whatever has been going on didn't just start this past year. Clearly incomes have been lagging behind debt since about 1986.
You have to wonder if debt is an indicator of the "value" of the assets perhaps the problem is more inflation of asset values than anything else. After all if farm land is only one of the latest asset categories to spike maybe what's going on is simply people paying too much for assets. As far as the dramatic decline seen since 2008 in the ratio of the change is simply the sharp correction in asset values (as represented by debt).
What I think is more troubling is the apparent decline in the efficiency of borrowed money. Up until 1984 a dollar of debt generated a dollar of income. Today a dollar of debt only generates 69 cents of income.
 (total debt & income-page-001.jpg)
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 total debt & income-page-001.jpg (106KB - 35 downloads)
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John, another look at where we have come to
