World’s Rich Are Hoarding $10 Trillion in Cash (expecting deflation?)

[Phoenix]

http://blogs.wsj.com/wealth/2010/07/13/worlds-rich-are-hording-10-trillion-in-cash/?mod=yahoo_free


WSJ Blogs
The Wealth Report
Robert Frank looks at the lives and culture of the wealthy.

July 13, 2010, 10:27 AM ET

World’s Rich Are Hoarding $10 Trillion in Cash
By Robert Frank

How afraid are the wealthy right now?

According to a report from Scorpio Partnership, the world’s high-net-worth investors (with $1 million or more) have an extra $10 trillion lying around that they refuse to turn over to their wealth managers.

Granted, these investors have $16.5 trillion invested with private banks and wealth-management firms–up from $14.5 trillion at the end of 2008, largely reflecting market gains.

But Scorpio, a London consulting firm, says wealthy investors actually have more than $26 trillion that they could be giving the banks and wealth-management firms to manage. “This implies there is approximately $10 trillion of high-net-worth assets that could be advised by banks,” the firm says. “Capturing these assets is the real answer for industry recovery.”

That could take a while. The wealthy were burned so badly in the past three years from bad advice and bad investment decisions that they are unlikely to hand over their extra cash anytime soon. And can you blame them?

The banks surveyed in the Scorpio report won on average about $900 million each in new-client assets–a 60% drop from 2008. And that is despite the flood of millionaires created last year.

“Our global HNW data show there are strong signs of wealth creation even in these complex markets and yet new clients are still holding back from opening accounts with the industry,” said Sebastian Dovey, managing partner of Scorpio.

Not all of the blame goes to wealth-management firms. The world’s governments and volatile financial markets are probably the main causes of fear in the rich right now. Still, the industry hasn’t done itself any favors with its performance and lack of transparency.

What do you think is making the wealthy keep their $10 trillion under the mattress?

[EE_]

What do you think is making the wealthy keep their $10 trillion under the mattress?

The most despicable, vile form of criminals that want to steal it?

[Ponce]

Ten "trillion" in cash from what contry.........if other countries stop taking the dollar then all that cash will be for internal use and nothing more.

I mean, I also hold cash but do have ten grand in Canadian plus my silver, gold and the more important of them all..........my tp hahahahahahahah

[gunDriller]

Ten "trillion" in cash from what contry.........if other countries stop taking the dollar then all that cash will be for internal use and nothing more.

I mean, I also hold cash but do have ten grand in Canadian plus my silver, gold and the more important of them all..........my tp hahahahahahahah


you should probably be aware of the foreign bank account reporting (FBAR) laws. always in place, but enforcement started July 1, 2010. the deadline for reporting was June 30, 2010.

in the past, only 20% of foreign bank account holders reported the accounts. in many cases, because they didn't know there were any laws about it.

the US Treasury is on a witch-hunt - they claim the right to fine people $500K just for not reporting foreign bank accounts - even if they declared the interest on their tax return.
. that's right, even if you behaved lawfully, the US gov. claims the right to seize your life savings.

their Modus Operandi is "guilty until proven innocent" - first they seize, then they make you prove that it's all legit, to get anything back.

i have investigated this as much as i could without paying a tax attorney. now what i am hearing is that the Canadian banks are cooperating - they are turning over account-holders' names to the US gov.

the limit for this reporting is $10K.

if your account has $9999K Canadian, you don't have to report it - unless an interest deposit takes it to $10K+.


and i used to think we lived in a Democracy. i don't remember voting to give the US gov. these powers.

[Glass]

and i used to think we lived in a Democracy. i don't remember voting to give the US gov. these powers

That sentence gives them all the Authority they need. You live in a Republic NOT a democracy. I am assuming you are US.

In a democracy the state owns everything, just like socialism and communism. They also demand that no person have any rights and only privileges. On the other hand a Republic instills all the rights and ownership in the people and gives government only privileges.


But Scorpio, a London consulting firm, says wealthy investors actually have more than $26 trillion that they could be giving the banks and wealth-management firms to manage.

And I think this sentence says everything this article is about.

[Ash_Williams]

They didn't get rich by stupidly trusting people and not having a plan B.

[Twisted Titan]

There is approximately $10 trillion of high-net-worth assets that could be advised by banks,” the firm says. “Capturing these assets is the real answer for industry recovery.”

A few would beg to differ.

T

[Phoenix]

and i used to think we lived in a Democracy. i don't remember voting to give the US gov. these powers

That sentence gives them all the Authority they need. You live in a Republic NOT a democracy. I am assuming you are US.


We live in a Republic, where the "representatives" do as they wish "on our behalf"? Wow, I'm glad there's a difference! ::)

Actually, insisting we are a "republic" is what gives them the purported moral authority to act as they do. "You got to vote, didn't you, now we act on your behalf." Nothing about a Republic requires the "representatives" to follow the explicit wishes of the People.

In reality, America is an imperial, plutocratic tyranny. But if you vote, you consent.

[Phoenix]

They didn't get rich by stupidly trusting people and not having a plan B.


The rich get rich by making others stupidly trust them.