image by Geoff Brooks
I recently came across a very good video on YouTube put together by “belangp” titled “How Much Gold do you Need to Protect Your Wealth?”. I have included a link to the video below this article if you are interested.
The video basically explains how the world’s wealth is distributed among the world’s population. The analysis is based on the Credit Suisse global wealth report numbers published in June 2021. Global wealth is split into a pyramid of 4 categories:
Greater $1m
Between $100k and $1m
Between $10k and $100k
Less $10k
What is amazing is how much wealth is in the top category (45.8% - $191 trillion) and how few people there are in that category (1.1% of population or about 56m adults).
The top 2 categories combined, 12.2% of the global adult population (639m of 5.24b) control a staggering 84.9% of all the global wealth.
Here is a view of the pyramid:
So back to the title of our blog - How do the top 1% stay in the top 1%? The answer is -
“They manage risk better and they cover their bases. In other words they hedge themselves for different outcomes”
The second part of the video explains how the wealthiest people in the world calculate how much gold they would need to stay in the top 1% should fiat currency fail.
I’ll let you watch the video on your own, but based on the total global gold (approx 6 billion oz) it would require ~14oz to stay in the top 1%. At today’s prices (~1800/oz) that’s about $25200 which will be revalued to $1million should we go back to a gold like or sound money standard. The secret is, the top 1% have taken this hedge for themselves and their partners to ensure that should things change, they are perfectly positioned.
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