Richest Americans Will Control 70% Of Country's Wealth By 2021, BCG Says

Tyler Durden's picture

Being rich is great. But being rich in America? That’s even better.

With US stock benchmarks trading just below record highs, and Treasury yields not too far from the all-time lows reached last summer, the gulf between the world’s wealthy elite – those 18 million households worldwide with more than $1 million in assets – and everybody else is rapidly widening.

According to a new study by Boston Consulting Group via Bloomberg, these households - with a total head count of roughly 70 million people, or about 1% of the world’s population - control 45 percent of the $166.5 trillion in wealth. By 2021, they will control more than half, suggesting that, while wealth inequality in the rest of the world is simply accelerating, in America, it’s gone into overdrive. Right now, 63 percent of America’s private wealth in the hands of U.S. millionaires and billionaires, BCG said. By 2021, their share of the nation’s wealth will rise to an estimated 70 percent.

“The share of income going to the top 1 percent in the U.S. has more than doubled in the last 35 years, after dropping in the decades after World War II (when the rich were taxed at high double-digit rates). The tide shifted in the 1980s under Republican President Ronald Reagan, a decade when “trickle-down economics” saw tax rates for the rich fall, union membership shrink, and stock markets spike.”

In its report, BCG puts the global rate of wealth creation in 2015 and 2016 at 5.3 percent, though the consulting firm expects it to accelerate to about 6 percent annually for the next five years. Those gains will accrue almost exclusively to the wealthiest Americans, while wealth held by everyone else is just barely growing.

Of course, there’s a caveat: In America, most of these gains exist only on paper. More than 70% of new wealth creation is derived from the rising value of rich investors’ portfolios. The rest is what BGC describes as “new wealth creation” aka real money earned by workers and entrepreneurs. Globally, the share derived from asset valuations falls to about 50%.

“In the U.S., the creation of “new” wealth is a minor factor, making up just 28 percent of the nation’s wealth increase last year. It’s even lower in Japan, at 21 percent. In the rest of the Asia Pacific region, meanwhile, two-thirds of the rise is driven by new wealth creation.”

The richest Americans could receive an additional bump if/when President Donald Trump pushes the fiscal agenda on which he campaigned through Congress – an agenda that includes tax cuts, deregulation and trillions of dollars’ worth of new infrastructure projects. However, since the exact details of these policies are not yet widely known, it’s difficult to predict their specific impact, BCG says.

“’No one knows’ what kind of tax changes will become law, said BCG senior partner Bruce Holley. However, “this could buoy the [growth in U.S. wealth] that we are predicting.”

America remains home to the highest concentration of millionaires and billionaires in the world, and their ranks are growing fast: Today, about 7 million Americans are worth more than $1 million. BCG expects that number to balloon to 10.4 million by 2021 - an annual growth rate of 8 percent, or about 670,000 new millionaires each year.

China has the second most millionaires and billionaires, at 2.1 million, though its population is four times the size of the US.

Within the US, glaring disparities exist from region to region. As Fortune reported back in 2015, roughly two-thirds of America’s millionaires and billionaires live in 12 metro areas, mostly wealthy enclaves along the coasts.

Meanwhile, according to the Federal Reserve’s latest survey of household economics and decisionmaking, a quarter of American adults can’t pay all their monthly bills, and 44% have less than $400 cash on hand in case of an emergency.

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junction's picture

And the Rothschilds will control 75% of the world's wealth by then.

Common_Law's picture

This is very easy to do when all our "progress" in tech. is  debilitating the population. And exponentially acceleratimg with the proliferation of EMF into every second of our lives.  (research consortium)  (EMFs produce widespread neuropsychiatric effects including depression) (documentary)  (logical conclusion)

espirit's picture

Richest Americans Will Control 70% Of Country's Coastline Wealth.

Not showing their underbelly are they?

AllOfGood's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do...

espirit's picture

That's nice for you, but I'm not really into child porn.

Stuck on Zero's picture

All it would take to put an end to the wealth madness is for everyone to withdraw their money from the system and buy gold. Sell stocks, cash in your IRAs, cash out bonds, withdraw your bank accounts, and buy physical metals. Within weeks paper would be dead and with it the paper wealth.

stacking12321's picture

not even everyone, just a few %

and if people were really going for the jugular, they'd buy silver, it's a much smaller market and more easily upended by sudden inflows. and when silver blows, gold will follow.

silverer's picture

You are right, for everything they do with money is somebody else's money. Stop borrowing and pay cash for everything you can. Find out who owns those companies and boycott them. Buy from medium to small size companies automatically helps correct the wealth imbalance. Vote out multiple term congressmen. Get them the f--k out.

lil dirtball's picture

> All it would take to put an end to the wealth madness is for everyone to withdraw their money from the system

It's even easier than that ... just stay home. For days. Don't go to work. Don't go shopping. Don't buy anything. Don't do anything but relax ... the whole shitshow would come to a grinding halt in a week or so.

Ironic that "Richest Americans Will Control 70% Of Country's Wealth By 2021" and 70% of GDP is 'consumer' spending.

In other news:

The Scalise shooting "hits so close to home," Cramer said. "We've all been under this cloud for a while of aggressive social media and threat assessments and thinking about families and whatnot and just trying to determine ... is it even worth it" to continue to serve in Congress.

Answering his own question, Cramer said "of course it is,"

Of course it is, if you want to be a 70 percenter.

Endgame Napoleon's picture

Interestingly, it is the tech people who are actually calling attention to the issue of automation-based underemployment--the tech leaders and people like Charles Murray and other scholars who are not from the so-called party of labor.

Mr T's picture

This is not a religion unless the worship of mammon and molech is a religion. No.

It is an ideology. If you must spam us with you singleminded multiple personalities at least get your facts such as they are straight.

Paul Kersey's picture

Compared to the world's wealthiest individuals, the Rothschilds are ne'er do wells. Where does a Rothschild rank in the world's wealthiest 100 people list? He doesn't. The world's wealthiest 500 people list? He doesn't. The world's wealthiest 1,000 people list? He doesn't. So where do the wealthiest Rothschilds rank? Jeff Rothchild ranks #1011 and Benjamin de Rothschild ranks #1121.

Since 2004, when Nathan Mayer Rothschild left the precious metals business in London, and the Rothschilds no longer were in charge of the first Gold Price fix, their family's power has diminished dramatically.

Moustache Rides's picture

Most of their wealth is so far off the books and/or held by puppets for them that it is speculated that NO ONE but themselves, know how much they have.  It's, in a way, similar with the Bilderburg meetings.  The people that show up are front men.  You will never see the real men behind the curtain.  Never.

mrbyrite's picture

I did notice that when yukos' khodorkovsky got arressted in russia Jacob R. suddenly turned up to take over his stake or something.  

Endgame Napoleon's picture

It is not a conspiracy. It is just the natural human impulse to protect money for your own family, rather than investing it in riskier ventures that employ other humans in your own country.

It has reached a point where there is less creative destruction and more cushioning of money at the top to ensure 100 layers of security for a few aristocrats and their two high-earner couple civil servant class via safe betting on the global, slave-labor economy. This may change in form, anyway, as automation keeps eliminating jobs and drying up the pool of customers.

But for the foreseeable future, they have set up elaborate mechanisms to help people avoid taking the risk to invest in their own country. Trump addressed quite a bit of that with his elliptical statements during the campaign season, but contradicted a few things. He called for re-patriotizing capital held abroad by these big companies, giving them a one-time tax break.

Reality: due to self-protecting human nature, if they don't get something like that, they would have great trouble maintaining their shareholders. The same thing applies when asking them to invest in jobs here, creating billion-dollar factories here (in their own country, USA), rather than exploiting much cheaper labor in foreign countries.

That is why many Deplorables went along with the Trumpian corporate tax cut agenda, not because we think they need to rig the system even more, using the tax code even more than they already do to bolster the **unearned income** of rich families AND "working families" at the bottom of the economic spectrum, leaving all of the other citizens struggling to even afford rent, with zero quality of life.

lil dirtball's picture

> Where does a Rothschild rank in the world's wealthiest 100 people list? He doesn't.

Holy crap! Just look at this ZHombie!

Good God, man - it's 2017 and all the information in the world is at your fingertips ... which are apparently instead jammed up your nose and ass.

Mr T's picture





AlexCharting's picture

I just laugh when these kinds of statistics make "self-proclaimed" capitalists suggest we need socialist economic equality. Winner take all, is a natural and legitimate outcome of capitalism. 

AtATrESICI's picture

The Owners are only trying to do what is best for the plebs and the children (especially children that are pizza related).

consider me gone's picture

Not to mention, how much of that wealth is invested in productive assets that maintain and create jobs? 

Xena fobe's picture

Jobs are being created in Mexico and China.  Here, jobs for H1b, illegals, and government.  That's all.

Juggernaut x2's picture

Crony Capitalism is the system in place in the US- assholes like Buffet and Zuckerman and  Bezos and Gates- those closest to the Fed spigot of printed jewbucks- no real value or betterment of everyday lives is created. 

Paul Kersey's picture

"The richest Americans could receive an additional bump if/when President Donald Trump pushes the fiscal agenda on which he campaigned through Congress – an agenda that includes tax cuts, deregulation and trillions of dollars’ worth of new infrastructure projects."

"Winner take all, is a natural and legitimate outcome of capitalism."

"No, "winner take all" is the outcome of crony capitalism by the klepto-corporatist, wealth extracting parasites that control governments. It's basically the codification of fraud, under which the The ultimate outcomes are neo-feudalism and debt serfdom.

jadan's picture

Your head in a basket is an inevitable outcome.

AKKadian's picture

Good, we will know where to go to get it back. Storm the smaller airports, they will try to fly out, under the cover of darkness. First sign of national economic collapse watch all ports of exit, like the Nazis they will try to flee to other parts of the world. Millionaires and Billionaires are now on a watch list. Thanks ZHedge.!!!

AtATrESICI's picture

That deafening popping sound is not the economy, it's the Yellowstone Volcano. Everyone back to sleep.

espirit's picture

Meh. Suppressed weapons are definitely not deafening. 

SmackDaddy's picture

Yes, just like those evil nazis /sarc. Like the SS Charlemagne who defended Berlin from the commies practically to the last man.

"Capitalism and Bolshevism are the two sides of the same international Jewish coin." - Adolf Hitler

Chris88's picture

You and the rest of the Free Shit Army?

Mr. Augie's picture

I bet most wil head to Israel

BuddhistAescetic's picture

United States, relative Sodom and Gomorrah. 

HRH Feant2's picture

So WTF are you doing? Pissing and moaning and saying "life is suffering" too fucking bad? I studied Bhuddism. What a fucking cop out to say the world sucks so I am going to just stay stoned and not contribute. Fuck you.

espirit's picture

I just keep applyling for ATF Form 1's.

Just don't hurt.

stacking12321's picture

no, fuck YOU for responding to someone with a lie, putting words into their mouth that they didn't say.

and you may have pretended to study "Bhuddism", even though you can't spell it, but you clearly didn't learn anything from your study.

if you really think that real buddhism is about pissing and moaning, then you are a worthless student, and the time you put into your studies were a complete waste.

Faeriedust's picture

Ultimately, it was passive resistance -- citizens just not HELPING maintain the government -- that brought down Rome.  It took about three centuries, but it worked better than any of the attempts at armed rebellion.

lasvegaspersona's picture

...only if 'wealth' is defined as paper promises.

Those who hold real thing will still have those real things, those who own bonds and weak stocks...ask an older German friend....or your neighbor from Zimbabwe.

AtATrESICI's picture

My most PMs are Cu and Pb in a Venezuela moment.

Faeriedust's picture

Ummmmmm.  In both post WWII Germany and Zimbabwe, those who owned real things -- cars, gold, but especially land -- found that they were easily stolen.  Stocks, bonds, and cash balances in banks, however, can more easily be hidden and transfered out of the country.

It all depends on what the future is most likely to hold in store. Nothing, including your life, is safe from a determined gang of thieves unless you can call on the help of your own determined gang of protectors.

grasha87's picture

Jim Rickards has blamed the problems in the U.S. on free trade and comparative advantage in his new book, The Road to Ruin. Here's why he is wrong:

Xena fobe's picture

I just turned in a term paper too.  I tested the random walk theory of stock price movements.  Maybe I'll put it on wordpress and spam ZH with it. 

aloha_snakbar's picture

Not if we round them up and eat them, first...

espirit's picture

I'm peticular and tasteful.

Organics first.

aloha_snakbar's picture

Its all in the sauces and spices...

Five Star's picture

The wealth effect at work baby.

Let's reduce to zero interest rates on the savings held by 92% of Americans at the bank (the vast majority of which are held by people would need that interest income and would spend nearly all of it), so that you can boost stock returns 5% for the much smaller portion of Americans with large financial assets, people who spend a much smaller percentage of their income. Genius...

Juggernaut x2's picture

And then the Fed wonders why the velocity of money is moribund at the same time interest rates are- everybody is hoarding dollars.

Vilfredo Pareto's picture

I don't think they wonder.  They have known since Eccle's time.

Trucker Glock's picture

Land of the free.  You can be rich, too!  Long live the American Dream.  Hahahaha.  Dream is the perfect word.

Cabreado's picture

Does anybody remember the rule of law?

Perhaps forgetting enables corruption, er, concentration of control.