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The Sensitivity Race to the Bottom »
Saturday
May212016

How much money is in the world?

Assuming you're talking about US Money, this question is impossible to accurately answer. The scary truth is that no one really knows.

Every US dollar is borrowed into existence. The US Treasury prints bonds (Treasury Bills), then sells them to the Federal Reserve Bank. The "Fed" then credits the Treasury with computer money (money that exists only on computer ledgers). This total is exactly equal to our national dept - about $17.8 trillion.

Unfortunately, that not the end of the story. As that $17.8 trillion is spent by the US Government, and then stored in banks, those banks can hold that sum as a "fractional reserve", loaning out as much as 90%. This has the effect of expanding the money supply (inflating) even more.

In order to accurately calculate the amount of dollars in existence, you would have to count all the loans made by all the banks in the world (that hold US Dollars as their reserve), then add that to that the amount those banks actually hold in reserve - a Herculean task.

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