They call Obama a ‘socialist’ who’s taking from the rich and giving to the poor, but the facts show that instead he’s presided over the largest transfer of wealth from poor to rich in the history of the world.
GDP has been growing by around 4% for the last two quarters, while the lowest income people suffered through job loss and declining wage growth.
That means someone else got the increase in real wealth:
By Joseph A. Giannone
June 22 (Reuters) — The rich grew richer last year, even as the world endured the worst recession in decades.
A stock market rebound helped the world’s ranks of millionaires climb 17 percent to 10 million, while their collective wealth surged 19 percent to $39 trillion, nearly recouping losses from the financial crisis, according to the latest Merrill Lynch-Capgemini world wealth report.
Stock values rose by half, while hedge funds recovered most of their 2008 losses, in a year marked by government stimulus spending and central bank easing.
“We are already seeing distinct signs of recovery and, in some areas, a complete return to 2007 levels of wealth and growth,” Bank of America Corp wealth management chief Sallie Krawcheck said.
The fastest growth in wealth took place in India, China and Brazil, some of the hardest hit markets in 2008. Wealth in Latin America and the Asia-Pacific soared to record highs.
Asia’s millionaire ranks rose to 3 million, matching Europe for the first time, paced by a 4.5 percent economic expansion.
Asian millionaires’ combined wealth surged 31 percent to $9.7 trillion, surpassing Europe’s $9.5 trillion.
In North America, the ranks of the rich rose 17 percent and their wealth grew 18 percent to $10.7 trillion.
The United States was home to the most millionaires in 2009 — 2.87 million — followed by Japan with 1.65 million, Germany with 861,000, and China with 477,000.
Switzerland had the highest concentration of millionaires: nearly 35 for every 1,000 adults.
Yet as portfolios bounced back, investors remained wary after a collapse that erased a decade of stock gains, fueled a contraction in the global economy and sent unemployment soaring.
The report, based on surveys with more than 1,100 wealthy investors with 23 firms, found that the rich were well served by holding a broad range of investments, including commodities and real estate.
“The wealthy allocated, as opposed to concentrated, their investments,” Merrill Lynch head of U.S. wealth management Lyle LaMothe said in an interview.
Millionaires poured more of their money into fixed-income investments seeking predictable returns and cash flow. The challenge ahead for brokers is convincing clients to move off the sidelines and pursue riskier, more fruitful investments.
“There is still a hesitancy,” LaMothe said. “Liquidity is incredibly important and people need cash flow to preserve their lifestyle — but they want to replace that cash flow in a way that does not increase their risk profile.”
The report found that investor confidence in advisers and regulators remains shaken. The rich are actively managing their investments, seeking customized advice and demanding full disclosure about the securities they buy.
There were signs that investors were shaking off their concerns. Families that kept money closer to home during the crisis began shifting money to foreign markets, particularly the developing nations.
North American and European investors are expected to increase their exposure to Asian markets, which are projected to lead the world in economic expansion. Europe’s wealthy are seen increasing their U.S. and Canadian holdings.
More wealthy clients also are taking a harder look at large companies that pay healthy dividends, as an alternative to bonds and their razor-thin yields.
“Investors are open to areas they hadn’t thought about before as they try to preserve their ability to be philanthropic, to preserve their lifestyle,” LaMothe said. “To me, the report underscored clients are involved and they’re not inclined to stay in 1 percent savings accounts.”