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Ronald Reagan struck a nerve during his 1980 Presidential campaign against Jimmy Carter when he asked Americans: "Are you better off now than you were four years ago?" I was reminded of that political quote today when the Fed came out with their quarterly net worth report. Here's a portion of it: The net worth of U.S. households climbed to a record high in the final quarter of last year, boosted mostly by gains on stocks, the Federal Reserve reported Thursday. Net worth — the difference between households' total assets, such as houses and bank accounts, and their total liabilities, such as mortgages and credit card debt, totaled $55.6 trillion in the October-to-December quarter. Stocks gains helped fuel the increase in net worth, although real-estate gains played a role, too. For all of last year, households' net worth rose by 7.4 percent, a slower pace than the 7.9 percent increase registered in 2005. Household debt, meanwhile, grew by 8.6 percent in 2006, down f...

Sure. It's the holidays and you're feeling ebullient. You want to feel good and spend freely. You buy a lot of stuff you don't have money for and it's okay 'cause you got this loan at a really great rate. Of course you won't have the money to pay it off when it comes due--and there's no telling what the new interest rate will be, but that's far off in the future so why worry now? Let's spend! Does that sound like Christmas for a lot of people? Probably. Unfortunately it's also the relationship between the USA and China. We in the US are buying Chinese toys and durables in quantities that boggle the mind and this trade inbalance is funded by US consumers with the Chinese government using the profits to buy up US dept in the form of Treasury bonds. This keeps the ebullient feelings going by keeping interest rates low. However should China stop buying bonds, then the interest rates will quickly pop up to more realistic levels. Talk about coal in the...