Daily Digest

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Daily Digest 11/16 - Extreme Wealth Is Bad For Everyone, Who’s Feeding China’s Gold Hunger?

Sunday, November 16, 2014, 11:02 AM

Economy

Extreme Wealth Is Bad for Everyone—Especially the Wealthy (jdargis)

Drawing on the work of Thomas Piketty and Emmanuel Saez, West notes that the concentration of wealth in the top 1 percent of American citizens has returned to levels not seen in a century. One percent of the population controls a third of its wealth, and the problem is only getting worse: from 1979 to 2009 after-tax income for the top 1 percent rose by 155 percent while not changing all that much for everyone else. By another measure of inequality, which compares the income controlled by the top 10 percent with that of the bottom 40 percent, the United States is judged to come forty-fourth out of the eighty-six nations in the race, and last among developed nations.

China Bad Loans Jump Most Since 2005 as Economy Cools (jdargis)

While new lending was “solid,” banks are cautious and demand for credit is “frail” because of a property downturn, UBS economists including Donna Kwok and Wang Tao said in a note dated Nov. 14. They see economic weakness triggering cuts in benchmark interest rates from early next year.

Party leaders have discussed lowering the 2015 growth target from this year’s 7.5 percent goal, the person with knowledge of their talks said last week. Gross domestic product will rise 7.4 percent this year, according to analysts’ median estimate in a Bloomberg News survey.

China, The New Indispensable Nation? (jdargis)

For decades, the United States — regardless of which party or president has been in power — has tried to channel China into the safe, bland, bureaucratic uniformity of existing international institutions: the World Bank, the International Monetary Fund, the World Trade Organization and the U.N. Security Council.

Who’s Feeding China’s Gold Hunger? (Adam)

China’s shift in import policy has been made possible as China developed it’s refining capacity significantly in recent years, hence not all gold across the globe that is headed for the Chinese market has to go through Switzerland. Additionally the Shanghai Free Trade Zone will take over Hong Kong’s transit point. The result being, this year it’s harder to track gold import into China as all countries around the world can ship directly to the mainland.

The Most Important Election You Never Heard Of (nimsdf)

Backed once again by physical gold, the Swiss public may be the first to finally say “enough” to the ongoing manipulation of the currency markets. No longer would governments be able to create limitless amounts of debt-backed currency without recourse. In response to the constant worldwide manipulations, Russia and China have been aggressively increasing their gold reserves over the last decade. Just recently, even ISIS decided that this is a smart choice as well.

Tracking Fishy Behavior, From Space (jdargis)

The program is based on the Automatic Identification System (AIS), originally a voluntary collision-avoidance system for ships that relies on VHS transmitters aboard vessels that transmit their position, identity and speed continuously to other ships and to satellites. “Global Fishing Watch enables the user to see the global fishing fleet in both space and time, and in any part of the world,” said David Manthos of SkyTruth.

New world record claimed for organic solar cell efficiency (Chris M.)

The technology also performed well in low light and high temperatures of up to 80 degrees Celsius. The results at low light showed that the OPV cell’s efficiency not only remained constant, but actually increased. The efficiency was 15% higher at an irradiation of 100 W/m², compared with the efficiency measured at 1000 W/m². The tests also found that when efficiency was measured at high temperatures it remained constant.

These measurements are surprising when compared to inorganic solar cells, which lose 15 to 20 percent efficiency when exposed to elevated temperatures.

Oil Dispute Takes a Page From Congo’s Bloody Past (jdargis)

But development is far more than just a buzzword here. The people in the Democratic Republic of Congo, Tanzania, northern Kenya, Uganda and Mozambique — all places of recent hydrocarbon finds — are among the poorest in the world, many without electricity or clean water, their children often facing relentless illness and few prospects.

Gold & Silver

Click to read the PM Daily Market Commentary: 11/14/14

Provided daily by the Peak Prosperity Gold & Silver Group

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3 Comments

KennethPollinger's picture
KennethPollinger
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 653
Extreme wealth, considered again

In light of the first entry, I felt the need to REpost my last post yesterday--just in case many missed it.

I do believe it is worthwhile as we are "supposedly" a Middle Class nation.

 
0
Lower Class America, Plus The 1/100 Top Folks
Comments by Ken:  I republish my own created Income-Wealth Chart for your review.  Do you disagree?
Is the Lower Class really 72% of the population???
 
And please see how the Super Rich have benefited over the Very Rich since 2002.  There are 16,000 Super Rich
families (having at least $111,000,000). See NYTimes article below: Isn't Unregulated capitalism just great?

 

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Another Widening Gap: The Haves vs. the Have-Mores

By ROBERT FRANKNOV. 15, 2014

 
Photo
 
 

A selection of yachts at the recent Fort Lauderdale International Boat Show, held at various sites in the Florida city. CreditAndrew Innerarity for The New York Times

 

Philip Rushton has been selling private jets to the global rich for more than three decades. In just about every economic cycle, sales of small jets and big jets tended to move together — rising and falling with financial markets and fortunes of the wealthy.

Now, however, the jet market is splitting in two. Sales of the largest, most expensive private jets — including private jumbo jets — are soaring, with higher prices and long waiting lists. Smaller, cheaper jets, however, are piling up on the nation’s private-jet tarmacs with big discounts and few buyers.

“The real demand is at the very top,” said Mr. Rushton, the president of Aviatrade, a private-jet brokerage and advisory company. “The big guys, the billionaires, have plenty of money, and they’re buying. But the middle and lower end has been much slower to recover from the crisis.”

The wealthy now have a wealth gap of their own, as economic gains become more highly concentrated at the very top. As the top one-hundredth of the 1 percent pulls away from the rest of that group, the superrich are leaving the merely very rich behind. That has created two markets in the upper reaches of the economy: one for the haves and one for the have-mores.

Photo

 

Other forms of luxury transportation also abounded at the annual event — whether a Bentley or a helicopter perched atop one boat.CreditAndrew Innerarity for The New York Times

Whether the product is yachts, diamonds, art, wine or even handbags, the strongest growth and biggest profits are now coming from billionaires and nine-figure millionaires, rather than mere millionaires.

“The very wealthy are often the ones pulling the trigger right now, and they have a very big trigger,” said Jim Taylor, a wealth specialist and managing partner of YouGov, the marketing research and survey firm.

Of course, the lesser 1 percenters are still doing just fine. But a closer look at the divergence at the very top rungs of the ladder offers a more detailed view of the drivers of inequality today. And the divide is reshaping the luxury end of the consumer economy.

According to a recent paper by the economistsEmmanuel Saez of the University of California, Berkeley, and Gabriel Zucman of the London School of Economics, almost all of the increase in American inequality over the last 30 years is attributable to the “rise of the share of wealth owned by the 0.1 percent richest families.” And much of that rise is driven by the top 0.01 percent.

The wealth of the top 1 percent grew an average of 3.9 percent a year from 1986 to 2012, though the top one-hundredth of that 1 percent saw its wealth grow about twice as fast. The 16,000 families in that tiptop category — those with fortunes of at least $111 million — have seen their share of national wealth nearly double since 2002, to 11.2 percent.

“Wealth is getting more concentrated in the United States,” the authors wrote. “But this phenomenon largely owes to the spectacular dynamics of fortunes of dozens and hundreds of million dollars, and much less to the growth in fortunes of a few million dollars.”

Dr. Saez and Dr. Zucman wrote that a “snowballing effect” was creating extravagant wealth at the very top. Outsize incomes — fueled in part by stock — are put into savings and investments, which generate more income, which creates even more wealth.

Mr. Rushton, the jet broker, has seen that snowball up close. During the financial crisis in 2009, the market for virtually all private jets collapsed. Yet, in a contrast to earlier recoveries, the demand for new, large-cabin jets has staged a much stronger comeback while the supply of new and used smaller and midsize jets is piling up.

According a jet market report from Citi Private Bank, deliveries of new so-called light jets — the smaller, cheaper models — were down 17 percent last year from 2012 and 67 percent from their 2008 peak. But deliveries of the biggest new private jets jumped 18 percent last year.

Demand for billionaires’ most coveted jet, the $65 million G650 from Gulfstream, is so strong that some G650 owners are now flipping their planes for millions of dollars in profit just months after buying them. Bernie Ecclestone, the Formula One auto-racing promoter and billionaire, flipped his for about $72 million last fall — just weeks after he received it.

Sales of personal, V.I.P. jetliners are also strong. Boeing has received several orders from individuals for its 777-300ER (which normally carries 400 passengers) and its even bigger 747-800.

“The really top guys are insulated from fluctuations in the economy,” Mr. Rushton said. “They’ve always got money, and they have even more today.”

For decades, a rising tide lifted all yachts. Now, it is mainly lifting megayachts. Sales and orders of boats longer than 300 feet are at or near a record high, according to brokers and yacht builders. But prices for boats 100 to 150 feet long are down 30 to 50 percent from their peak.

Henk de Vries, chief executive of Feadship, the yacht builder, says the strongest market in yachting today is for boats more than 250 feet long. The company is about to deliver its largest boat — a 330-footer that sells for more than $250 million — and it recently expanded its shipyard to make ever-bigger hulls. (The largest yacht is now the 590-foot Azzam, owned by the president of the United Arab Emirates.)

Jonathan Beckett, the chief executive of Burgess, the yacht broker and advisory company, put it this way: “The folks at the top feel like they’ve come through the crisis intact.” He added, “They’re a fairly confident group, and they’re saying, ‘If I’m going to build a boat, I want to do it right.

 

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Breakaway Civilization.

You are describing the Breakaway Civilization Kenneth.

Can't get a job? Feeling irrelevant? That is because you are irrelevant, (to the economy). You just don't count. You are no longer an asset. You are a liability.

Take a look down the rabbit hole.

jonesb.mta's picture
jonesb.mta
Status: Silver Member (Offline)
Joined: Jun 11 2008
Posts: 126
Isn't Unregulated capitalism just great?

Exactly where do you see unregulated capitalism? The height of toilet seats is regulated as well as how much water it takes to flush, the taxpayers bail out corrupt Wall Street banksters, corporation are people, the government controls how many doctors can get into medical school, our justice system only prosecutes the mundanes and you call the USA unregulated capitalism. The USA is no more capitalistic than China, maybe less so. We're the most regulated country in the world.

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