Who says quantitative easing and the global central bank put isn’t working. Well, lately it is pretty much everyone including former central bankers and investing legends (which coincides with what we said in 2009 but it took the mainstream about 5 years to figure it out) except central planners, of course, and those who still manage money for a living. However global QE certainly is working for one group of people: those who in the aftermath of Piketty’s release of Kapital 2.0 have fallen under the microscope: the world’s wealthiest.
What is amusing is that many are still confused how it is that as the middle class is collapsing around the world, and certainly in the US, the wealthiest continue to collect more wealth. Hopefully the recently released 2014 edition of CapGemini’s World Wealth Report will shed some light on just where this wealth is not only coming from, but where it is going.
Here is the punchline: according to the latest wealth report the number of high net worth individuals increased by nearly 1.8 million in the past year, the second biggest surge since 2000, which also happened to be the crazy days of the first tech bubble (not to be confused with the current tech bubble). In other words, the epic, unprecedented stock bubble reflated by the world’s coordinated central banks, has succeeded. Succeeded, that is, if its goal was to make the world’s richest people wealthy beyond their wildest dreams. As for everyone else, just over 7 billion people, better luck next time.
What is perhaps just as amusing in considering the unintended (or perfectly intended) consequences of the Fed’s attempts to “stimulate the economy” is that being a mere millionaire is no longer enough. Which is why CapGemini makes the following distinction: “For the purpose of our analysis, we separate HNWIs into three discrete wealth bands: those with US$1 million to US$5 million in investable wealth (millionaires next door); those with US$5 million to US$30 million (mid-tier millionaires) and those with US$30 million or more (ultra-HNWIs).”
