Just a thought. Actually a couple
Quotes from one of my subscriptions services – food for thought. I hope so.
……meanwhile, people with real financial assets – stocks and bonds, mostly – have done very well. So have the people who monger these things. As Marc Faber points out, the 173,000 employees of New York’s leading financial houses made more money last year than the entire population of Vietnam, some 84 million people.
At the top end of the US financial pyramid, it is party time. The median price of a New York condo is over $1 million. Even that is peanuts in central London. There, houses have just seen their biggest increase since ’79 (more on that below). And, last year, a single art auction at Christie’s brought in $269 million – a new record. Christie’s chairman said he had never seen
anything like it.
Stopping for two cups of tea and two muffins near Waterloo station in London last weekend, and I spent just over £10. The price seemed reasonable; the little coffee-shop was full. But we wondered; how many of the world’s people can afford to live like this?
But therein hangs a tale…and lies a problem. Most people are not getting rich. Most people are barely making ends meet. Because the great boom is a fraud. It does not lift up all boats; it lifts up only the luxury yachts. Why is that? Because it is an asset-price boom, not an economic boom.
Faber quotes Bank Credit Analyst:
“Increases in asset prices do nothing to create new resources for investment as the gains can only be realized by selling the asset to someone else, who must come up with the money from somewhere. The exception is if domestic investors sell their assets to foreigners (as the US has been doing.)” lenders who package the loans and sell them to investors worldwide. As assets rise, the 1% of the population in the financial industry or with significant financial assets gets rich. New wealth is not being created; it is merely being redistributed.
Never have so few done so little and made so much doing it.
Richard Smith
0845 226 9106