The Rich Could Lose Half Their Wealth in Downturn, Says Faber

Posted: 03 Apr 2012 08:47 AM PDT

Economist Marc Faber is often gloomy and almost always contrarian. Yet his latest prediction on the world's wealthy may be among his most frightening yet.

: Bloomberg News; Marc Faber in 2009

In an interview on CNBC and in his latest “Gloom, Boom & Doom Report,” Faber says that the diverging fortunes of the rich and the rest has become unsustainable. He says that while asset inflation and Fed stimulus of the past 30 years has benefited a lucky few – basically “those with assets” – continued money printing could lead to sudden and violent wealth destruction.

“Somewhere down the line we will have a massive wealth destruction that usually happens either through very high inflation or through social unrest or through war or a credit market collapse,” he told CNBC. “Maybe all of it will happen, but at different times.”

When asked on CNBC how much money the wealthy could lose in such a scenario, Faber didn't hesitate: “People may lose up to 50% of their total wealth. They will still be well-do-to. Instead of having a billion dollars they will have five hundred million.”

Faber admits he doesn't know the exact timing of all of this. And he writes that assets and inequality will likely rise before falling. Yet he says that for the wealthy, safety will likely continue to be primary goal when it comes to investing.

“Questions about which assets will decline less than others will become more important and replace the current search for asets that are likely to appreciate the most,” he writes.

He recommends farmland, entire islands, real-estate in New Zealand, Canada and Australia, foreign stocks, precious metals held in custody outside the U.S. diamonds, stamps art and defense stocks.

He says the wealthy should support policies that would reduce inequality. Yet he says that's unlikely, since “people of privilege tend to prefer to risk their own destruction than surrender any of their advantages.”

Do you think Faber prediction of a 50% wealth loss by the rich could come true?

Wealthy Smartphone Users Like Angry Birds and Facebook

Posted: 03 Apr 2012 07:45 AM PDT

Millionaires don't get to be millionaires by playing games on their phones right?

: Bloomberg News

Wrong. According a new study from the Luxury Institute, 73% affluent smartphone users (with an average net worth of $2.8 million) used smartphone apps every day. The most frequently downloaded apps for millionaires included Angry Birds, Facebook and Words with Friends.

Of luxury consumers with smartphones, 28% of them own an iPhone, 22% own an Android, 16% own a BlackBerry and 2% own another smartphone, the study said.

The wealthy also buy a lot of stuff on their phones, with an average purchase price of $628, according to the study.

Yet the Luxury Institute said the luxury world needs to understand the true marketing power of Angry Birds and Words with Friends. While they may look like primitive and frivolous time-waster apps, they’re actually “prime spots for luxury mobile marketing.”

The Institute doesn't offer any specific guidance. But consider the possible synergies. The Millionaire's version of Angry Birds could feature chickens launching in G550s, soaring headlong into the Italianate mansions protecting the pigs.

Or, instead of bombs, the birds could get giant bags of cash that they could drop on sponsored retailers like Bergdorf, Tiffany's and Louis Vuitton.

Do you think the wealthy play games on their phones?