Fooled? Naw... I fully realize that a lot of it is "fake", but there's also a lot of "real" wealth sloshing around. I say "real" because much of it is still imaginary. It's all basically a product of QE and low interest rates, but wealth is what wealth does.But I really think @KaeJS and @nathan79 are being fooled by the loans. Many people are very deep in debt; or didn't you see all the headlines about Canadian debt ratios? We have some of the craziest personal debt numbers in the entire world.
It's all loans. Mortgages, car loans, lines of credit, HELOCs, payday loans, credit cards.
The first time I heard the headlines 10 years ago I was shocked: "Half of Canadians just $200 away from insolvency!". Wow, I thought, this thing is going to blow up! Then they start repeating the same headline every few months for years and years, but somehow nothing ever happens. The reckoning is always right around the corner. Just like the real estate crash that's been brewing since 2005.
That's when you begin to understand that the government is basically supporting this whole mess. If this housing/debt bubble ever bursts, it's going to be Armageddon. I'm sure they'll introduce interest-free government loans, bring back 40 year mortgages, and whatever else it takes.
Let's also make a distinction between types of debt. The wealthy (asset owners) acquire debt to increase their assets, generally at very favourable interest rates. Everyone else (the people without assets), acquire debt to increase their liabilities by purchasing vehicles and other depreciable consumer goods. Even if they wanted to invest in assets, no one is going to loan them money at a favourable interest rate.