Piketty phenomena – “Riding a Wave of Growth: Global Wealth 2014” (chart)

from Edward Fullbrook

The Boston Consulting Group (BCG) is a leading player in what is called “the global wealth-management industry” and which in effect is plutonomy’s tactical cavalry in financial markets. BCG have just “released” a report disclosing that in the year 2013 the wealth of the world’s people worth $100 million or more increased 19.7 percent.  That compares, they say, to 3.7 percent for the wealth of sub-millionaires.  Naturally they are overjoyed at this latest redistribution.

“Wealth” meaning what? Like most people and as also with the symbol “capital”, they use “wealth” to stand for two different things, and also like most people, economists especially, they often lose track of which referent they are trying to talk about.  But we can overlook that here because the 19.7 percent and 3.7 percent refer to financial wealth and, with exceptions, that is all plutonomists and their agents really care about.

The report documents how the upward redistribution of wealth to the 0.1 percent and especially to the 0.01 percent is accelerating, in other words, how the plutonomist programme (pre-Piketty it was never reported by mass media)  is now restructuring the world at an even faster rate.  Here is a taster of how they see the next five years. 

Wealth held by all segments above $1 million is projected to grow by at least 7.7 percent per year through 2018, compared with an average of 3.7 percent per year in segments below $1 million. Ultra-high-net-worth (UHNW) households, those with $100 million or more, held $8.4 trillion in wealth in 2013 (5.5 percent of the global total), an increase of 19.7 percent over 2012. At an expected CAGR [compounded average growth rate] of 9.1 percent over the next five years, UHNW households are projected to hold $13.0 trillion in wealth (6.5 percent of the total) by the end of 2018.

Wealth managers must develop winning client-acquisition strategies and differentiated, segment-specific value propositions in order to succeed with HNW and UHNW clients and meet their ever-increasing needs.

The industry’s top client nations are of course those with the most billionaires, and they list the top five as follows, the numbers to the right being the number of billionaire households in 2013

1. United States  4,754
2. United Kingdom  1,044
3. China  983
4. Germany  881
5. Russia  536

The report’s Exhibit 2 is especially interesting as it compares the growth rate of GDP and the growth rate of financial wealth. The numbers in (  ) refer to 2012, and the others to 2013.