Wealth

Wealth is the stock of valuable assets a person or society owns, net of liabilities, as distinct from income, which is a flow. Measured globally it is vast: UBS's Global Wealth Report has estimated total household net worth in the vicinity of 450 trillion dollars, spread across real estate, equities, bonds, cash, and hard assets.

Why it matters

The composition of wealth determines its vulnerabilities. Wealth held in nominal claims, cash, deposits, and bonds, is exposed to inflation and to the solvency of its issuers, while wealth in property and equities is exposed to markets, taxation, and legal title. The entire store of value question is really a question about wealth: what form lets accumulated work travel through time, and occasionally across borders, with the least loss.

History supplies hard cases, from hyperinflations to confiscations, in which the legal and physical form of wealth mattered more than its paper amount.

In the gold vs bitcoin debate

Gold has stored wealth for millennia and central banks still hold roughly 35,000 tonnes of it, an endorsement no other non-sovereign asset enjoys. Bitcoin's claim is that wealth can now be held in a form no government can dilute and no border can stop, at the price of volatility and a short track record. Most portfolios treat the two as competing, or complementary, answers to the same question.