Broad Oak: your emotional support animal

Sunday, July 18, 2010

Massive inequality

See this series of slides for some eye-openers about the distribution of income and wealth, e.g.:

  1. In the US, the top 10% have 81.5% of all the wealth, and 90.4% of financial wealth such as stocks, bonds and mutual funds.
  2. Of OECD countries, the UK has the 3rd most unequal income distribution, after the US and (can we perhaps ignore it?) Luxembourg.
The first point may be significant for market speculators, since the top 10% are so wealthy that they are unlikely to be forced into dumping investments simply to make ends meet. But one wonders what they might be doing on the quiet - moving into land and commodities? That's if they anticipate inflation. On the other hand, Charles Hugh Smith thinks they'll be happy to see a deflationary economy as long as they hold Treasury bonds.

It's getting very "us and Them" these days, rather worrying if you're not able to sit it out like Cicero on his country estate at Arpinum, 70 miles from Rome. But even he could not hide forever, and Antony's thug Herennius found him at Formiae.

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1 comment:

Nigel Sedgwick said...

One of the interesting things about inheritance tax is that it perpetuates and amplifies the inequality of which you complain.

Avoidance of inheritance tax is more difficult (absolutely and as a proportion of wealth) for those whose wealth and living is limited to one country. Also for those for whom legitimate tax avoidance procedures are less effective: let us summarise that as equally costly, but with a more modest return because of more modest wealth.

Thus at least part of the problem, in the UK, is down to government taxation.

Best regards