The world’s richest have lost $400 billion in the Ukraine crisis
Earlier in the year, news that the world’s 10 richest men had seen their global wealth double to $1.5 billion since the start of the pandemic while a further 163 million people had been driven under poverty line caused widespread consternation and outcry. International charity organization Oxfam went ballistic and urged governments to impose a one-time 99% wealth tax on windfall Covid-19 gains, arguing that the the super-rich profited unfairly stimulus provided by governments.
Well, no nation has yet answered Oxfam’s call, although Colombia, France, Norway, Spain and Switzerland received income from personal net worth taxes in 2020. However, the disparity in wealth trends served as further evidence that the aphorism that the rich keep getting richer while the poor keep getting poorer still rings true.
Well, sort of.
It has been exactly six weeks since Russia invaded Ukraine and unleashed the world’s deadliest security crisis since World War II. The war is seen as the biggest risk for Europe due to its heavy reliance on Russian energy products, while the World Bank has warned it could cause lasting damage for low- and middle-income countries.
At the individual level, however, the conflict turns out to be a mixed bag for the world’s super-rich. On the one hand, the American energy barons have seen a 10% increase in wartime wealth thanks to a spike in oil and gas prices since Russia began its assault on Ukraine. Harold Hamm, Jeffrey Hildebrand, Richard Kinder, George Bruce Kaiser and Dannine Avara have all seen their fortunes jump by double digit percentages in the past six weeks alone thanks to their stakes in major oil and gas companies.
But the majority of tycoons in the world are taking their shots these days.
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According to Bloomberg Billionaires Index, the total wealth of the world’s billionaires has fallen from a record high last year of $13.1 billion to $12.7 billion amid falling global stock markets since the invasion of Ukraine by Russia. The lion’s share of the $400 billion drop can be attributed to Russia after the country’s billionaires saw their collective wealth plummet by $260 billion thanks to widespread sanctions against Russian oligarchs.
While the drop in terms of the percentage of wealth of the world’s richest has not been significant, the sheer number of people who have been struck off the ultra-rich list tells a more terrible story.
According to the annual Forbes magazine ranking of the richest people in the world, the world now has 2,668 billionaires, down 329 from a year ago, including 34 fewer Russian billionaires. The decline in the total number of billionaires was the largest since the 2009 financial crisis and marks a stark contrast to an increase of more than 600 in 2021, when the global stock rebounded from pandemic lows.
A good 169 newcomers to the list in 2021, including an exercise bike company Interactive Platoon(NASDAQ:PTON) John Foley and the dating app Bumble Inc..’s (NASDAQ:BMBL) Whitney Wolfe Herd has already fallen. PTON stock is down 31% year-to-date while BMBL is down 24%.
Some 236 people have joined the billionaires club for the first time, including the pop star Rihanna, Lord of the Rings director Peter Jackson and venture capitalist Joshua Kushner.
Meanwhile, Elon Musk, the eccentric boss of Tesla Inc.(NASDAQ: TSLA) and SpaceX, was named the world’s richest man for the first time with a fortune of $219 billion, up $68 billion from a year earlier, largely thanks to the meteoric rise in stocks TSLA. TSLA is down 14% since the start of the year, but is still +51% over the past 12 months, giving the company a valuation of $1.13 trillion, by far the highest ever. a car manufacturer.
Musk jumped Amazon Inc..’s (NASDAQ:AMZN) Jeff Bezos on AMZN’s 7% year-to-date decline as well as $1.5 billion donated to charity. Bezos’ $171 billion fortune makes him the second richest person on the planet.
By Josh Owens via Safehaven.com
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