I’m not exaggerating so much, this is pretty concise / complete:
The key lesson is that the ultra-rich are different from you and me: They have much higher savings rates regardless of their age. No matter how expensive your taste is, there is a limit to how much you can consume, which means that any income above that threshold must be saved. The ultra-rich therefore spend relatively small proportions of their income on goods and services that directly provide jobs and income for others, rather than amassing stocks, bonds, art, trophy properties, and other assets.
The ultra-rich do not need encouragement to refrain from buying goods and services, so any increase in income concentration should put interest rates under pressure. Another view is that an increase in income concentration will drive demand for financial assets, which should drive prices up and yields depressed.
This is from Matthew Klein’s excellent The Overshoot Substack, which addresses the driving force behind virtually everything that’s happening in business and markets right now.
He looks at some recent research linking demographic change (we’re moving towards a world with 30% fewer children by 2100), falling interest rates, and wealth inequality. This is fascinating stuff, and Matthew is a really good explainer.
He posted this for free, I highly recommend you read it:
Inequality, Interest Rates, Aging, and the Role of Central Banks (The Overshoot)