THE wealth of the world’s billionaires now stands at $7.3 trillion, an increase of 12pc from last year, according to a new report released September 18 by Wealth-X and UBS. There are a record 2,325 billionaires in the world, up from 2,170 in 2013 and 1,360 in 2009, the first year following the financial collapse.

The stock market and finance capital are the driving forces behind the wealth of the world’s billionaires. The top industry for billionaires, according to Wealth-X, is ‘finance, banking and investment,’ which accounts for close to 20pc of the total billionaire population, followed by industrial conglomerates at 12pct and real estate at 7pc. More than one in six billionaires resides in one of the world’s major financial capitals — New York, Moscow, Hong Kong or London.

The corporate and financial aristocracy has benefited from a massive redistribution of wealth, aided and abetted by the major governments and central banks.

Since 2008, under the direction of the Obama administration, the resources of both the US Treasury and the Federal Reserve have been opened up to Wall Street, which has engaged in an unprecedented orgy of speculation. Bank bailouts, near-zero interest rates and ‘quantitative easing’ in the US have been paralleled by similar measures elsewhere, particularly in Europe.

Six years later, stock markets continue to post record highs The latest surge came after Federal Reserve Chairman Janet Yellen said the central bank would keep interest rates at near-zero (i.e., provide banks with essentially free cash) for a ‘considerable period.’

As a result, American billionaires have seen their number grow by 57 over the past year. The country is home to the largest number of billionaires in the world (571), nearly 25pc of the total global billionaire population and three times more than any other country.

At the same time, incomes for the majority of the population have continued to decline. Between 2010 and 2013, the period of Obama’s ‘recovery,’ average income for the bottom fifth of the population fell 8pc, while the income of the top tenth of the population increased 10pc, with the extremely wealthy reaping the bulk of these gains. The cash paid out to the banks is to be covered by the destruction of social programmes.

Not only are Wall Street investors simply buying up stocks, but corporations themselves are funneling record cash hoards back into the market, rather than increasing production. In the first half of this year, US companies bought back $338 billion of their own shares, more than any six-month period since 2007.

There is an unending stream of cash run by a financial aristocracy addicted to speculation; and headed toward another and even greater collapse.

Courtesy:WSWS

Published in Dawn, Economic & Business, September 29th, 2014