Show Me the Money!

Note: Estimates below are from 2015.

For purists, who believe “money” refers only to physical “narrow money” (bank notes, coins, and money deposited in savings or checking accounts), the total is somewhere around $36.8 trillion. If you’re looking at “broad money,” which isn’t just physical money and includes any money held in easily accessible accounts, the number is about $90.4 trillion.

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World real estate is worth around $220 trillion and the world’s stock markets are valued around $75 trillion.

Nominal “investment” in derivatives can be valued above $1 quadrillion, and we recently learned that the belt and inner system asteroids can be valued in the $hundreds of quadrillions quintillions. A graphic look at terrestrial “money” is given below:

US GDP is around $20 trillion, and predicted to double to $40 trillion in ten years according to a number of banks and banking organisations. Chinese GDP is around $12 trillion, predicted to more than quadruple by 2030 according to the same banks and banking groups. A lot can happen in ten years to such predictions, which are easy enough to make but rarely prove true as predicted.

Meanwhile, global investment is flowing to the US which is raising the relative value of the dollar, putting pressure on the US Federal Reserve Bank to ease interest rates.

Chinese markets are in turmoil, as the global trade war is making Chinese Communist Party leaders see a recession in their future unless things change.

The entirety of global money and financial markets is too complex for any person or group of persons to comprehend in detail. Any conceivable superhuman artificial intelligence would be challenged by the global financial and economic systems today. But it is a topic worth considering, and worth reading about. You may discover that your intuition on the subject can provide some useful insights.

A good place to start reading is with the history of money, trade, and debt. Start simple and add more complex ideas gradually. The world of Star Trek was a world without money, but we are likely a long way yet from such a world.

Video playlist with some interesting videos on the history of money:

Note: The infographic at the top is an updated version of a previously published infographic of “all the money in the world.” It helps to provide a sense of perspective when balancing your checkbook. Remember that several named asteroids in our solar system are “valued” in the $quintillions, thousands of times more than the value of all derivatives and millions of times more than the largest government budgets or debts.

The image below provides many of the same comparisons in an inverted pyramid:

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1 Response to Show Me the Money!

  1. Improbus says:

    “Chinese GDP is around $12 trillion, predicted to more than quadruple by 2030 according to the same banks and banking groups.”

    How is this going to happen with China’s demographics? Their GDP will go from $12 trillion to $48+ trillion in 10 years? Bull shit. It sounds like those bankers are high.

    The rest of the article is spot on.

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