You're Not as Rich as You Think

The idea that the world is awash in savings -- one factor driving the theory of secular stagnation -- is, on the surface, a persuasive one. Too bad it may not be true.

Yes, the postwar generation is wealthier than any before it. But the ultimate value of any investment depends upon being able to convert it into cash and thus generate purchasing power. In fact, the world's accumulated wealth -- around $250 trillion, according to Credit Suisse’s Global Wealth Report -- is almost certainly incapable of realization at its paper value. The headline number thus vastly overstates the supposed savings glut.