This speaks to the “financialization” of the modern economy we referenced in a post yesterday. In a fiat currency world the banks truly, and almost totally run the show. The central banks particularly. And the American Federal Reserve most of all. If one is riding the financial asset train one is likely better off than one was in 2000. If however one is not on that train, if one lives in the real economy as most middle class Americans do, one may very well be worse off in real terms since 2000. (In the West.) Most people don’t have financial assets to inflate. The rich do.
So we see a dip in overall global wealth, the first dip since the Crash. It’s not a huge deal. This trough largely reflects the trouble in China and other emerging markets. It doesn’t mean the chasm is about to open up again, right now. But it is a warning that it could open up again, soon.
Just one in a series of warnings we’ve seen lately.
Total wealth has doubled since 2000, with a fivefold rise in China and lower, but still rapid, growth in India according to the research.
“Wealth inequality changes slowly over time, so it is difficult to identify the drivers of these trends. However, the value of financial assets – especially company securities – is likely to be an important factor because wealthier individuals hold a disproportionate share of their assets in financial form,” the report found.
Total global wealth decreased by $12.4 trillion to $250.1 trillion, with the strength of the U.S. dollar weighing on the overall global wealth picture, as when valued in U.S. dollars, net worth fell in every region except China and North America.