The annual McKinsey wealth report has just been released, titled The Global Balance Sheet 2026: Imbalance and Divergence. The report confirmed what many of us already knew: the global economy is one great big giant ponzi scheme. One in which ‘paper wealth’ has now far outpaced the ability for the system to provide genuine prosperity.
The headline number is that “global wealth” has skyrocketed to $1.8 quadrillion. Now, that is a big number—one that is almost impossible to grasp without some kind of reference point. So, let’s deal with a single quadrillion rather than the nearly two quadrillion dollars the global asset base is supposedly worth.
In digits, a quadrillion looks like this:
1,000,000,000,000,000.
To better conceptualize what that means, imagine you’re about to drive one quadrillion meters of road. If you were driving at 100 km/h, nonstop, day and night, it would take roughly 1.14 million years to cover the distance. And that’s just one quadrillion.
But perhaps a visual reference is easier:
So, let’s break down the $1.8 quadrillion figure.
The report explains that real assets—including factories, land, machinery, gold and silver, forests, commodities, real estate, intellectual property, and so forth—accounted for just $620 trillion of the total sum. Layered on top of that productive base was an almost equally large pool of financial assets held by households, governments, and non-financial companies.
The financial sector—including banks, insurers, pension funds, and other institutions—held a further $550 trillion in assets, equivalent to roughly 90 percent of the entire real-asset base. Yet once the corresponding debts and liabilities were deducted, net global wealth amounted to only around $600 trillion. What is important to note, is the rate of growth in the perceived value of the financial layer. Up 60% in a single year!
Essentially, what the recent McKinsey report shows is that while the collective value of “global wealth” continues to rise, most of that increase now comes from paper gains on pre-existing financial assets—not from an increase in real assets. Over the past 12 months, factories did not suddenly produce 60 percent more goods. We did not build 60 percent more roads or infrastructure, and the housing stock did not expand by 60 percent.
What changed was the price assigned to a narrow group of AI companies—and the absurdity of those valuations only gets worse. Just recently I exposed the insanity of a $2.5 trillion market capitalization for the loss-making company SpaceX. A valuation so outrageous that it can only be compared with the worst excesses of the dot com mania, when non-existent companies dreamed up in mom’s basement were IPO’ing with multi billion dollar valuations.
That still did not stop Elon Musk from recently announcing that SpaceX might eventually become more valuable than Earth. There’s that good old Elon Musk ‘genius’ the propagandists keep talking about. Does anyone believe this slop? Really?
But this is what makes the McKinsey wealth report so important. Even though it’s mainstream publication, it actually puts hard numbers on the widening gulf between the wealth claimed by the financial system and the productive reality beneath it. Clearly the global economy has nothing close to the wealth it claims to possess. Even many of the collection of “real assets” are part of the hyperbubble, such real estate and commercial property—both of which sit a historic highs in terms of valuations vs salaries. Then we have the enormous and opaque private credit bubble to factor in.
The reality is that beneath the supposed $1.8 quadrillion in global assets may lie just $100 trillion—or less—of genuine, unleveraged wealth.
We can say this because combined value of the world’s entire gold stock is only around $29 trillion, 62 times smaller than the total valuation of global wealth. That means at present, only a tiny pool of real money is supporting this impossibly large mountain of notional value. I am betting this is going to reverse heavily in the coming years.
Obviously there are only two ways to balance the books on this front: gold must be revalued dramatically higher, or the perceived value of these ponzi assets must collapse. My view, is both will happen simultaneously until eventually a new equilibrium is found. One which recapitalizes the system, and enables the next epoch of capital accumulation to begin. In 2025, we got our first real taste of this rebalancing, but we have long way still to go.
So before leaving, a few key takeaways from the report:
In 2025:
US equity valuations reached an all-time high.
Their value relative to GDP was nearly double the historical average.
More than half of the increase in S&P 500 market capitaliztion between 2021 and 2025 came from the seven giant companies associated with the AI boom.
Of the wealth growth recorded in 2025:
Only 20% came from net new real investment.
Nearly 60% came from additional asset-price gains above inflation and deteriorating net-worth positions elsewhere.
Another 42% reflected prices rising broadly with inflation.
Net international lending and borrowing subtracted from the total.
In terms of the “divergence” discussed in the report’s title, this becomes apparent when you recognize that the epicenter of this paper wealth growth is the United States. Again, this is no surprise. Ultimately, the report shows us that we truly are at the peak of the greatest financial bubble the world has ever seen—and that we have no excuse for failing to see it.
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IS YOUR PORTFOLIO READY?—SUMMER STRATEGIZING CONSULTATIONS (20% discount for Members)
As we move into summer, the risk of a major market correction is rising. That brings danger, but also significant opportunity for those who are prepared. For that reason, I am offering a special members-only discount for my Summer Strategy Consultation.
This is a one-to-one consultation designed to help you assess your portfolio risk, discuss the opportunities I am preparing for heading into autumn in gold, silver, the miners and commodities.
The consultation can also be used to ask questions about the Great Taking, gold and silver miners, precious metals, or broader Plan B strategy.
This special discount is available for members during the first two weeks in July. Spaces are limited. To secure your spot please use the link below.
