Stagnation Nation: Middle Class Wealth Is Locked Up in Housing and Retirement Funds

Jon Alternative Media, Banking, Crypto Currency, Economy, Government, Precious Metals, Real Estate

The majority of middle class wealth is locked up in unproductive assets or assets that only become available upon retirement or death.
One of my points in Why Governments Will Not Ban Bitcoin was to highlight how few families had the financial wherewithal to invest in bitcoin or an alternative hedge such as precious metals.
The limitation on middle class wealth isn’t just the total net worth of each family; it’s also how their wealth is allocated: the vast majority of most middle class family wealth is locked up in the family home or retirement funds. This chart provides key insights into the differences between middle class and upper-class wealth. The majority of the wealth held by the bottom 90% of households is in the family home, i.e. the principal residence. Other major assets held include life insurance policies, pension accounts and deposits (savings).
What characterizes the family home, insurance policies and pension/retirement accounts? The wealth is largely locked up in these asset classes.
Yes, the family can borrow against these assets, but then interest accrues and the wealth is siphoned off by the loans. Early withdrawals from retirement funds trigger punishing penalties.

This post was published at Charles Hugh Smith on TUESDAY, OCTOBER 24, 2017.