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Who Really Benefits From Inflation And Why You're Not Wealthier

The Federal Reserve Bank of St. Louis released an interesting report analyzing the underlying fundamentals of why America's economic growth level still remains quite anemic. The results won't surprise many people-most American households have rebuilt only a fraction of the wealth lost during the recent recession.

According to the Federal Reserve Bank of St. Louis, household net worth peaked at $67.4 trillion during the fourth quarter of 2007. Household net worth then sunk to a low of $51.4 trillion in 2009, and has since rebounded to $66.1 trillion. (Source: "Annual Report 2012," Federal Reserve Bank of St. Louis web site, May 2013, accessed June 6, 2013.)

While it appears that nominal net worth has recovered 91% of the losses, the St. Louis Federal Reserve notes that this is not an accurate representation of either household wealth or economic growth.

Since inflation was present during this time-for a total of two percent per year over the last five years-and the number of households increased by 3.8 million, the real recovery rate is only 45% of household wealth, according to the St. Louis Federal Reserve.

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