Wealth and materialism are the cornerstones of our modern civilization. The world of today is not that far from wealth driving the world as you may relate to your honey, to refer to the true adage. The question that how much actual currency there exists in the world is a tough beast to tame and here we will dwell on statistics that are admittedly a bit out of date.
How much money is there on Earth?
As in principle, currency is nothing but an instrument that may be used in order to settle debts and its measures vary. In its narrowest or most restrictive sense, only the currency that is available for transactions immediately is taken into account while in broad terms it is also a store of value.
For the sake of simplicity and convenience, we will go by the measures recognized by the Federal Reserve in the United States. In economic nomenclature, these measures are M0 which is the narrowest followed by M1, M2, and finally M3. They are
- M0 is taken as the sum of all physical currency including the accounts at central banks that may be swapped for physical currency.
- M1 is taken to be the currency which is the total of M0 minus the M0 portions kept as reserve in addition to the amount in current, demand or checking accounts.
- M3 constitutes of M1 plus currency in saving accounts, money market, small deposits and accounts of certificate of deposit, abbreviated as CDs, under $100,000.
- M3 is simply M2 plus all other CDs, Eurodollar deposits and agreements of repurchase.
- In the United States, the M2 money supply about a decade back was $6.430 trillion.
- In the European Union it was in the range of $7.352 trillion.
- China had $3.1 trillion.
- Japan scored $6.677 trillion.
The estimates above should suffice as they form a large if not whole part of the wealth you can get in developed economies. This is evident from the fact that the US, EU, China and Japan has a combined GDP of roughly $27.555 trillion, about 50.65% of the world’s GDP. Assuming they have an equivalent combined money supply, the world would have $46.513 trillion in its pockets.
Who is Rich?
During the initial stages of the World Economic Forum held at Davos in Switzerland, Oxfam International released a damning report about the stark inequality that plagues the world appropriately called “Working for the Few”. The report made certain observations that bore out that fact.
- Only 1% of the population controls 50% of the World’s Wealth.
- The richest 1% have a combined wealth of $110 trillion. That is about sixty-five times the wealth of the bottom 50% of the population of the world who have the same wealth as the 85 richest.
- Economic Inequality has increased over the past thirty years in 70% of countries.
Even in the United States it is the wealthiest ten percent who were benefitted from financial growth the post-2009 recovery period while the bottom ninety percent only became poorer.