By Tom Kando
My wife just passed on to me an article: “Where the World's Millionaires Live: The Top 10 Countries,” Written by Nikhil Hutheesing (June 10, 2010). You can Google it or use this link: www.dailyfinance.com/story/where-the-worlds-millionaires-live-the-top-10-countries/19510242/
The article is interesting, even though sloppy:
1. It starts out saying that “Global wealth increased in 2009 back to a total of $111.5 trillion.” But this amount only represents all the “assets under management” (AUM) in the world. I suppose this consists primarily of stocks, bonds, other investments, and bank accounts. It doesn't even include real estate and other tangible assets. So this is a poor definition of total global wealth, one myopically used by the Wall Street financial community.
2. The article contains blatant errors: It says that of the $111.5 trillion total amount of “wealth,” Europe still owns the largest chunk in 2009 - $37 trillion. Fine. But in another paragraph, we are told that in 2009, North America’s share of the world’s wealth “totaled $4.6 trillion.” This is obviously only the amount by which North American wealth grew. In fact, North America’s total (AUM) wealth is close to Europe’s - namely $31 trillion.
3. Although “millionaire” is hardly a sign of extreme wealth any more (why, I know several of them myself - haha), it is nevertheless interesting to compare the amount , the distribution and the trend of wealth (as measured by this inadequate yardstick) of different parts of the world:
The Amount of Wealth: As stated, the total is now $111.5 trillion. Of this, Europe owns $37 trillion, North America $31 trillion and the rest of the world $44 trillion.
The Distribution of Wealth: Bad: It used to be roughly correct to say that Europe, America, and the rest of the world each owned about one third of the world’s wealth. Now, Asia is slowly increasing its share.
The US has by far the largest absolute number of millionaires of any country, but on a percentage basis we are only number seven. 4% of us are millionaires. (11.2 million households).
Most of the very rich countries are tiny: The six countries ranked above the US are: #1, Singapore, #2, Hong Kong, #3 Switzerland, #4, Kuwait, #5, Qatar, #6, United Arab Emirates. Their percentages of millionaires range from 11.4% to 6.2%.
Millionaires make up much less than 1% of the world’s population, but they own 38% of the world’s wealth. On the other hand, the 83% of the world’s households who are the poorest, own only 13% of the wealth. The top 0.5% of households (those with $5 million or more) own 21%, or $23 trillion, of the world’s wealth.
Trend: Bad: The growth in the number of millionaires in 2009 was greatest in North America in absolute terms, and greatest in Asia in relative terms. Millionaires’ share of the world’s total wealth increased from 36% in 2008 to 38% a year later. The share of the top 0.5% of households (those with $5 million or more) grew from 19% in 2008 to 23% in 2009. The share of the world’s 83% poorest people declined from 14% to 13%.
Conclusion: Bad: So what else is new? The rich are getting richer and the poor are getting poorer.
The news is especially bad for the US: Inequality and its acceleration are greater here than in Europe and in Asia. While millionaires “only” own 38% of the world’s wealth, in the US they own over half of it. This puts us in the company of the Middle East, Latin America and Africa.
I find our country’s rightward drift puzzling, at a time of growing inequality. The electorate has become convinced that the solution to our economic problems lies in (1) electing millionaire businessmen (and businesswomen), in (2) dismantling the government and in (3) eliminating labor unions. Pogo said it long ago: We have met the enemy, and it is us. leave comment here
