In fact, there are more rich people on the planet today than before the credit crisis destroyed Lehman Brothers and Bear Stearns and nearly crippled the World's financial industry.
A study from Capgemini and Bank of America Merrill Lynch showed that the World's population of High Net Worth Individuals (HNWI) with $1 million or more in investable assets (read, extra cash) jumped 8.3% over the last year to a total of 10.9 million people. That number is up from the 2007 tally of 10.1 million tycoons.
Not only are there more rich running around the globe; but the rich are richer. The study estimates that financial wealth control by the HNWI population jumped 9.7% over the last year to $42.7 trillion. Meanwhile the U.S. GDP grew 1.9% in the first quarter of 2011, according to the U.S. Department of Commerce.
I'll be curious to see how this report will be used in Washington's current battle over the debt ceiling, and the debate on the millionaire tax. Many might initially point out (as I first did) that Obama's stimulus package isn't creating jobs, but for a lucky few, it is creating a ton of wealth.
But while the World's grown wealthier, the U.S. and European HNWI populations are still not up to the 2007 levels. Most of the growth has come from the red hot economies of China, India and Brazil. As Capgemini points out:
The financial crisis and economic downturn also have worsened fiscal deficits and public debt levels, especially in developed countries where economic activity has been slower to recover. Despite ongoing challenges, the world economy grew at an annual real rate of 3.9% in 2010, but developing economies were the real engines of expansion. At the end of 2010, the world’s population of high net worth individuals (HNWIs) was up 8.3% from end-2009 to 10.9 million and their wealth was up 9.7% to US$42.7 trillion. HNWI wealth in North America and Europe was still below the pre-crisis levels (end of 2007).
Another interesting caveat, as my colleague Jeremy Bogaisky suggested, is that the Capgemini study is based in U.S. dollars. The dollar has weakened against other currencies as the U.S. has kept interest rates low. This makes people who hold other currencies richer in dollar terms and gives foreigners a leg up in the current survey.By Steven Bertoni | Forbes