Bloomberg reports, “for the wealthiest people on the planet, 2021 was a year of enormous gains, extreme losses, and unprecedented scrutiny.” Rising valuations of everything from mansions to crypto to commodities boosted the collective fortune of the world’s 500 richest people by more than $1 trillion as the rest of the world struggled with the second year of the COVID pandemic. See the top 10 Billionaires in the world today below.
For the first time on record, the top 10 fortunes were all in excess of $100 billion. In fact, more than 200 are above $10 billion in their fortunes. Musk has now surpassed the level of riches (adjusted for inflation) achieved by modern history’s previous wealthiest person. Combined, the net worth of the 500 billionaires now exceeds $8.4 trillion, greater than the GDP of all countries except the US and China.
The world’s richest 1% had earned more than $30 trillion combined. The wealthiest 0.1% own as many assets as the bottom 90%. See in the chart below that the trend is clear – the rich are getting richer, and the poor are getting poorer. During the past Covid time period, while Billionaires were raking in the riches, the rest of us were in Covid locked downs getting poorer and waiting for our government stimulus checks.
Some may look at these charts and say, “OMG, we need to tax the rich – it’s unfair.” But can one tax our way to prosperity? Yes, extreme wealth inequality can be problematic as it can sow the seeds of envy politics and drive governments to socialistic policies. The reality is, when you become that rich, you know how to hide your wealth all around the world, leaving the tax bill to the rest. If you tax businesses, the businesses merely pass the cost onto their customers.
What are the solutions? The solution lies in understanding how they got rich in the first place. There is nothing wrong with those that genuinely work hard or smarter should receive more compensation. Unfortunately, this has not always been the case. Government manipulation of our economy has favored the rich over the poor. How?
This has been mostly achieved via government monetary and fiscal policies that debase the currency allowing many of these folks to leverage their past success into the future. Those who do not have, or very little assets, can not. There are other reasons as well – trade policy, regulations, and tax heavens to name a few.
A sound monetary policy will reduce extreme wealth inequality via natural market forces. Learn more here on how fiat currency debasement creates wealth inequality mathematically.
All roads lead to the Fed.
See more #chartoftheday posts.
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