Sunday, October 26, 2014

http://money.cnn.com/2014/10/21/news/economy/wealth-income-growth-ratio/index.html?iid=SF_E_River

Wealth is growing faster than income and recently broke a record for the growing gap. The current wealth to income ration is 6.5. For the past 100 years its been between 4 and 5.  Economists say this could be a foreshadowing of another recession.

Economist Tim Yeager explains that an "asset bubble" can be created because people become over optimistic about the stock market and pour their money in, causing a bubble in the market. He goes on to say that this has been happening more frequently and is causing financial instability.

It safe to say, however, that the increase in job growth could bring in an increase in wages. If this happens, which has already started in some States and cities across the US, then I wouldn't expect to see another recession.

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