OMG Are The US, UK, & Canada Plutonomies? Citi Analysts Examine The Super Rich!
What exactly is a plutonomy?…I wonder if your editor managed to get a copy of the so called “Plutonomy Reports”? (See Below) I do recommend reading the reports, the inflation figures on luxury goods are astounding!
Gillian Tett of the FT reports :
“Global equity strategists do not often star in Hollywood films. Right now, however, that fate has befallen Ajay Kapur, an analyst who formerly worked for Citi.
Five long years ago, Mr Kapur and some of his Citi colleagues penned a dense research note on the issue of “plutonomy” – a word they invented to describe economies powered (and controlled) by a rich elite, such as the US and UK.
At the time – in 2004 and 2005 – Mr Kapur’s group had a challenge getting their ideas accepted by their bosses. “The thesis was considered too out of the box,” he recalls. But last month he discovered that Michael Moore, the US film-maker, had somehow read his note – and depicted him as one of the “bad guys” in his latest film, Capitalism: A Love Story.
For while Mr Kapur had analysed “plutonomies” in order to help investors select stocks (investors should invest in companies selling luxury goods to rich people, such as Louis Vuitton), Mr Moore took a moralistic view.
The essential thesis is that plutonomies arise when there are factors such as “disruptive productivity gains, financial innovation, capitalist-friendly governments, overseas conquests and dopamine-heavy immigrants, the rule of law, patent protection and great complexity exploited by the wealthy of the time”.
This description has applied to countries such as the US, UK, Canada and Australia recently: in the US, for example, the top 1 per cent control almost a quarter of the wealth. And that has big implications for consumer spending or global financial flows.
Here are Two Issues of The Plutonomy Report:
Citigroup Oct 16, 2005 Plutonomy Report Part 1
