Submitted by Taps Coogan on the 19th of July 2016 to The Sounding Line.

Mark Twain famously quipped that ‘It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

As we discussed in the recent article ‘Concrete Signs of Trouble’ (link here), we live in a world where central banks and central governments believe that creating confidence (justified or not) in the economy and providing short term stimulus is more important than creating the actual conditions necessary for capitalism to work for the average person. As the Brexit vote testifies, the claims of great economic progress, full employment, surging markets and calls for further integration have fallen on deaf ears.

With the Hungarian referendum on immigration as well as the upcoming US, French, Austrian and German presidential/chancellor elections on the horizon this year and next, the ‘globalists’ struggle against the emerging and increasingly successful anti-establishment movements is just heating up. As with the Brexit vote, we at The Sounding Line, expect the results will continue to surprise, disappoint, and threaten the ‘establishment.’

Perhaps the simplest explanation for why we expect a continuation of the anti-establishment trend is that the average family in the US and the Eurozone hasn’t received a meaningful working/salary raise in nearly two decades.

Astonishingly, the US the inflation adjusted median household income has been trending lower for 18 years.

In the Euro area, inflation adjusted average household income is lower than in 2003 and real household disposable income has been declining since 2001.

As these charts depict, when accounting for inflation, an average American or Euro area family has seen declining real income for a very long time. What the charts don’t show is that at the same time that families have been struggling with lower real wages, their taxes, rent, healthcare, and education costs, have been rising far faster than the official rate of inflation. It is an inescapable fact that the average family experiencing runs counter to the daily media narrative of growing wealth and improved living standards. In poll after poll, the majority of people think that their children will have less opportunity than they had. Since a generation is generally considered to be about 20 years, it would appear that this depressed sentiment is coming true before our eyes.

If the average person is earning less in real terms, all of the ‘great’ GDP and employment numbers and new stock market highs only serve to illustrate to the average person the inequities of an economy run by central bankers. That, and it blinds the financial and political establishment to the economic and social realities outside their increasingly sheltered circles.