The Riddle of the Nile

Americans are getting poorer. They don’t realize it. No newspaper tells them. No politician dares even to whisper the truth. No Fed economist proposes a remedy. Still, real wages are less today than they were a year ago…and no higher than they were at the bottom of the recession in November 2001. Worse, unmentioned in the “real” calculation is the cost of housing. Depending on where you live a house today could cost twice as much as it did in November of 2001. This, of course, is taken as good news to most people. But it is only good news if you are ready to leave the country or die. Otherwise, you are going to need some place to live. And it will cost you a lot more than it did a few years ago.
GDP figures are not bad. Inflation is under control. Consumers keep spending. Unemployment is low. And stocks are high. But beyond the fog of numbers, the stars put the U.S. economy at a completely different latitude. Each day, Americans spend 5% more than they make. That is the implication of a $600 billion current account deficit in a $12 trillion economy. And every day that passes, workers in India, China, Indonesia and many other countries become more skilled – readier to compete with Americans for the world’s resources. Oil goes up. Copper soars. Soon it will be meat.

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Howe Street