The Kobeissi Letter painted a bleak picture of wealth distribution in the US, arguging that the country is increasingly becoming an economy divided between asset owners and everyone else.
ByJordan Lyanchev
Own assets or be left behind — this is what the analysts at the Kobeissi Letter argued, highlighting the major discrepancy between those who do and those who stay on the sidelines.
Bitcoin fits surprisingly well into this distorted economy, but treating it as a cure for the destruction of the middle class would be a bit of an overstatement.
Own Assets or Get Left Behind
There are roughly 134.8 million households
There are roughly 134.8 million households in the States, according to the analysts. However, around 1.4 million of them, also known as the wealthiest 1%, control more than $60 trillion in net worth. Since 2020 alone, their wealth has grown by more than $30 trillion. The bottom 50%, or 67.4 million households, collectively hold a fraction of that amount.
The reason isn’t simply that rich households earn larger salaries; the bigger divide is asset ownership, the Kobeissi Letter said. Total US household wealth has exploded from roughly $101 trillion six years ago to $185 trillion today, but that massive increase has been distributed very unevenly.
Americans who already owned stocks, businesses, property, and other appreciating assets benefited disproportionately as their prices rose. Meanwhile, inflation steadily eroded the value of income and cash savings. The analysts separately calculated that the greenback has lost roughly 23% of its purchasing power since 2020.
In other words, someone whose savings or assets
In other words, someone whose savings or assets increased by 30% over that period has made only a relatively modest actual gain after accounting for the decline in purchasing power. Inflation has also remained well above the Fed’s 2% target for 60 consecutive months.
Food, housing, transportation, and other necessities have become more expensive, while the assets needed to escape that erosion, mostly homes and stocks, can also become harder to afford. The analysts added that borrowing has offered little relief, as mortgage rates recently climbed toward the mid-7% range. At the same time, Treasury yields surged, raising the barrier to homeownership even further.
