50% is impossible. Consider these 2 facts:

1) A typical annual inflation rate is in the single digits 1-10%.

Source:

http://inflationdata.com/inflation/inflation_rate/historicalinflation.aspx,

2)

Source:

From http://en.wikipedia.org/wiki/Wealth_in_the_United_States
So consider the logic of 50% return on investment. Given a conservative 10% inflation every year, there would be a 40% increase in real wealth. Your 40% above the inflation means you would have a 40% larger stake in the nations wealth.

That would mean in 2008, the 1% would own 48.4%. In 2009 it would be 67.8%, then in 2010, 94.9%, and in 2011, 132.9%. This is obviously impossible.

I am sorry but I don't believe that your model is correct. You are assuming the top 1% of the population would, as a whole, net 40% gain year after year and that the other 99% stays flat or just grows at the rate of inflation. That is not what is being proposed here.

Someone is suggesting that Scio's building account grew at a net rate of 50% minus inflation. Inflation is typically in the 2% to 3% range in the US but that is not really relevant here.

There is a rule of thumb that to find out how long it will take money to double at a certain rate, using compound interest, you divide your interest rate by into 72. This gives a close estimate. Money invested at 6% will double in 12 years, at 10% it will double in 7.2 years, at 24% in 3 years and at 50% it would double in about 1.5 years.

Let's say that Scio's reserve account is $20,000 and is invested at 50%. First of all, nothing pays 50% interest on a regular basis so it would have to be invested in something speculative such as the stock market or real estate. However, for conversations sake, lets say it's guaranteed at 50% interest. In about 1.5 years it would grow to $40,000, in 3 years it would grow to $80k, in 4.5 years to $160k, in 6 years to $160k, in 10 years, it would grow to $640k. This is an amazing rate of growth to be guaranteed 50% and it is not going to happen.

My point is that even if it did happen, after 10 years, $20k would grow to $640K. $640 k is still tiny in an economy counting in the $trillions. Nothing about the economy in general, the top 1%, the other 99% etc. would have any effect whatsoever on how this investment grew. Of course, if you carried it our long enough, the growth would have to slow down. For example, once the money got up to say $1 billion, nobody, and I mean nobody, is going to pay 50% interest guaranteed on an investment of $1billion.

Hubbard's policy forbid Org money to be invested with banks. Investing in real estate is the current rage with Scio management. In real estate, growth is speculative but up until 2008, the trend was strongly up. Huge amounts could be made in a year, if the money was leveraged. Hubbard never allowed leveraging, he insisted that everything be fully purchased with cash. 50% annually could never be guaranteed indefinitely in real estate. After 2008, we have seen that real estate can also lose in value.

Lakey