America’s Everything Bubble

In 1Q 2017, U.S. household net worth rose to a new all-time high of $94.835 trillion, equal to a record 498.41% of GDP. The U.S. household net worth/GDP ratio is now 3 standard deviations above the long-term average of 377.77%.

Current U.S. GDP of $19.028 trillion is a record $6.076 trillion below the level needed to support current U.S. stock market and housing values.

Over the last eight years, nominal U.S. GDP has averaged a year-over-year growth rate of only 3%.

If nominal U.S. GDP growth remains at only 3%, it will take the U.S. economy 9.37 years to grow into current asset values. This is a new record high and 3 1/2 standard deviations above the long-term average. At the top of the 2007 Real Estate Bubble, the U.S. economy only needed 4.26 years to grow into then asset values. At the top of the 2000 Dot-Com Bubble, the U.S. economy only needed 2.75 years to grow into then asset values.