Part 7/9:
The current economic environment points to inflated asset prices, with home and stock prices at historical highs. The US stock market's value now stands at 191% of GDP, and the housing market is similarly overvalued at 165% of GDP, leading to an aggregate ratio of 315%. These figures reflect significant asset bubbles, much of which can be traced back to the Federal Reserve's policies of low interest rates and aggressive money printing over the past two decades.
Moreover, consumer savings rates have plummeted to just 3.8%, marking one of the lowest levels in history. This alarmingly low savings rate indicates that many Americans are living paycheck to paycheck, further constraining consumer spending and contributing to a cyclic downturn.