How Much Money is There in the World?

byviyee

6.4K followers

8 years ago

How Much Money is There in the World?

Well, if all the money in the world were shared out, we would all have about $US55,000.

Perhaps calculating the income would be of more use?

The difficulty is that there are large amounts of virtual money in the world. Virtual money exists as digital money which is simply computer calculations.

The virtual money is probably more than the real money.

Derivatives.

It gets boring now as we look at derivatives which we give a value to whilst they actually do not exist in real terms. An example is Futures. Futures began when farmers needed “seed” money in the spring and had to borrow money to buy the seed. The banks lent the money against the security of the future harvest.

Yikes! This is getting heavy. Bear with me since we are nearly there.

The value of that future harvest changed according to the weather during the growing season.

The Real Derivative.

Here is the crazy part: the bank could sell the future harvest “mortgage” to another bank. (Just a minute, there is no harvest yet to sell.)

The Real Money

With companies and banks selling and buying things which do not yet exist, we have difficulty calculating the real amount of money in the world.

The Real Point.

There is plenty of money, both real and virtual, in the world. You cannot affect the balance of the world economies by making a million or two yourself.

You and I can make a lot of money without disturbing the balance of the world’s economy or making someone else poorer.

There is plenty to go round.