Arthur J. Villasanta – Fourth Estate Contributor
Zurich, Switzerland (4E) – Credit Suisse Group AG, Switzerland’s second largest bank, reports that aggregate global wealth rose by $14 trillion to $317 trillion in mid-2018 compared to the 12 months since the bank’s last report.
This represents a growth of some 4.6 percent, according to the Global Wealth Report 2018 published by Credit Suisse’s Research Institute. This growth rate is lower than last year, but higher than the average growth rate in the post-2008 Great Recession era.
As for the United States, its household wealth is continuing to see an “unbroken spell of wealth gains.”
“The United States continued its unbroken spell of wealth gains since the global financial crisis, adding another $6 trillion to the stock of global wealth,” said the report. It ssaid rising household wealth in the U.S. was “seemingly relentless.”
“Total wealth and wealth per adult in the U.S. have grown every year since 2008, even when total global wealth suffered a reversal in 2014 and 2015. The U.S. has accounted for 40 percent of all increments to world wealth since 2008, and 58 percent of the rise since 2013,” according to the report.
The report found that global wealth continued to grow at a moderate pace and the rise partly reflecs a continued rise in equity markets. Rising wealth was also due to increases in non-financial assets owned by the middle-class.
“Financial assets … continue to make a substantial contribution to growth of household wealth, accounting for 41 percent of the increase in gross wealth worldwide, and more than two-thirds of the rise in North America,” said the report.
“However, non-financial assets have grown faster in recent years. Over the past 12 months, they have provided the main impetus to overall growth in all regions except North America, accounting for more than 75 percent of the rise in China and Europe, and all of the rise in India.”
The unbroken spell of rising wealth in the U.S. will come to an end, however.
“While not wishing to cast doubt on the ‘Trump Effect’ on financial markets, it seems inevitable that the uninterrupted spell of increasing wealth in the U.S. will come to an end at some time. Fortunately, there are signs that wealth inequality is no longer rising, which should mitigate the impact of any setback on the middle classes,” the report said.
This year’s wealth report saw the rise of China to second place in terms of world wealth rankings. “The main outcome of the new wealth valuations is confirmation of what many observers already suspected – that China is now clearly established in second place in the world wealth hierarchy.”
“The country overtook Japan with respect to the number of ultra-high net worth (UHNW) individuals in 2009, total wealth in 2011 and the number of millionaires in 2014. Nevertheless, the data shows that mean wealth per adult in China ($47,810 in mid-2018) remains far below the level in Japan ($227,240) and median wealth lags even further behind Japan ($16,330 versus $103,860).
The general trend is one of rising household wealth.
“We are seeing wealth increase, we are seeing that the distribution, regionally, is also moving along so it was made as a comment that China is now emerging as the second holder of total wealth,” Nannette Hechler Fayd’herbe, global head of Investment Strategy & Research at Credit Suisse.
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