Once Bit, Rich Shy From Risk of Stocks

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After taking big risks and big losses in 2008, wealthy investors have become the Cassandras of the financial world, hunkering down with cash, gold, farmland and other haven investments. Their "fear portfolios" largely protected them from last week's market gyrations, when the Standard & Poor's 500-stock index spiked up and down more than four percent a day for four days straight.
Yet they are also imposing a national price. Recoveries are often led by the investing and risk-taking of the wealthy, and the rich have traditionally been more optimistic about the economy than everyday investors. Yet current surveys show the rich are among the most pessimistic about the economy. Rather than investing in stocks or companies that can create jobs, they are betting on continued volatility and slow growth by hoarding cash, gold and other safety assets.

There are two different worlds operating in this country. One world is a land of plenty: private schools, the best in health care, villas in Tuscany, multiple expensive automobiles, multiple $million homes, travel, entertainment, servants; in other words, the life of royalty.

The other world is one of desperation. The cost of living rose and required two incomes to support what one salary supported in the past. Schools are crumbling. Benefits diminished. Home values crashed. Homes were lost. Homelessness increased. Jobs disappeared with layoffs and no one hiring. Young people returned to homes already stressed by sandwiching between college age children and older parents.

Two different worlds. The republicans are content with the world they perceive as supported by their policies, the reign of the elite. Others on the edge of eliticism want to get there.

You have a way of getting to the meat of the issue.

Ann