Secondary Sources: Wealth-Building, Dollar, Gold - Real Time ...

By Phil Izzo

A roundup of economic news from around the Web.

?Wealth: Annie Lowrey notes the younger generation lags in wealth building. ?A new study from the Urban Institute finds that Ms. Brady and her peers up to roughly age 40 have accrued less wealth than their parents did at the same age, even as the average wealth of Americans has doubled over the last quarter-century. Because wealth compounds over long periods of time ? a dollar saved 10 years ago is worth much more than a dollar saved today ? young adults probably face less secure futures for decades down the road, and even shakier retirements.?

?Dollar: Dean Baker says that the value of the dollar doesn?t say anything about the strength of the U.S. economy. ?Fans of arithmetic and believers in accounting identities know that an over-valued dollar is at the root of our current economic problems. While believers in the Confidence Fairy think that investment will reach new highs as a share of GDP, and/or consumers will spend even when they have little wealth, those of us who follow data know that the only way to make up the demand shortfall created by trade deficit is with a large budget deficit. However, the Serious People say that we can?t have a large budget deficit, so that means we get high unemployment.?

?Gold: Izabella Kaminska quotes BNY Mellon?s Neil Mellor on the changes in the gold market. ?For a decade long uptrend that is still intact, hasty conclusions should be avoided; but startling projections aside, there can be no doubting that certain elements within the equation guiding gold prices are in a state of flux. Perhaps the first thing to note is that without the active buying of central banks, there would be no question in many a mind that a new era had arrived. The World Gold Council reports that central banks raised purchases by 17% to 534.6 tons last year ? the most since 1964 ? and the WGC believes that this is a trend which is set to continue (notably, Russia and Kazakhstan increased their holdings for a fourth consecutive month in January.)?

Compiled by Phil Izzo

Source: http://blogs.wsj.com/economics/2013/03/15/secondary-sources-wealth-building-dollar-gold/

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