The number of millionaire households in the world dropped from 11 million in 2007 to 9 million last year, a fall of almost 18%, according to The Boston Consulting Group. The figure was worse in North America where the drop was 22%.
The world’s wealthy are getting poorer and poorer at an alarming rate.
The study’s other important top-line statistic is that “Global wealth fell from $104.7 trillion in 2007, measured in assets under management, to $92.4 trillion in 2008—a decline of 11.7 percent. It was the first decline since 2001.”
The rich seem to have joined the middle class on the metaphorical bread line, which is not good news for developed economies that are counting on consumer spending to help drive GDP growth rebounds. The wealthy may buy different goods and services than the middle class do, but their share of overall purchasing power is tremendous. What has been described as a “jobless” recovery is becoming a “wealthless” recovery as well.
The erosion of personal wealth matches the erosion of wealthy pools of capital. Harvard and Yale announced that their endowments dropped by more than 25% during their fiscal years which ended June 30. These institutions are clearly no better at managing their money than people in the top tier of the economic scale are.
The economic suffering, if it can be called that, has reached the rich. BMW and Tiffany (TIF) beware.
Douglas A. McIntyre
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