One year ago, I tried to explain how much money is in the world and came up with a slightly idiotic answer. Today, upon seeing a video entitled "Money as Debt" shared to me via a friend on Google+, I decided to once again, try to explain to myself this very complex matter.
Quick answers to the question of how much money is in the world:
- If you see "money as debt", then as of October 14, 2011, the total money in the world is $40,432,610,158,058. Source: Global Debt Clock.
- If you see money as a unit of value, and GDP as the best unit of measurement - then the answer is $58.26 Trillion Dollars. Source: Based on Global GDP information 2009 (See below)
- If what you're really after is the amount of money in circulation only in the United States, then the answer could be given by Mr. Wolfram Alpha - $1.039 Trillion Dollars. Link to Dynamic Page
Short answer: If money is debt, then the entire money in the world is the total debt. Take a look at the video below.
Video answer: "Money as Debt": 47 minutes
Money as Debt
You May Download the Transcript: Money as Debt by Paul Grignon
The Path to the Answer
I don't know who this guy Paul Grignon is or his motivations, but I do know Salman Khan. If you don't know him, then I suggest that you head out to his khanacademy.org. The way Sal explains the Fractional Reserve System is pretty straightforward and does not have the political bent that often accompanies discussions. Later on, I've included a video which has a political bent to it for some perspective.
Part of the answer will most likely lie in banking, so I pieced together some of the Khan Academy's videos on banking to try to arrive at clues.
1. Banking Basics
2. Fractional Reserve Banking. Here Sal actually asked the question, "How much money is there in the system or in the economy?" in 9:25. By which his answer is
"It all depends on how you define money."
Money as GDP
Supposing that we were to define money as value and the best measure for value as the GDP (Gross Domestic Product), then another path to the answer we are looking for is the total GDP of the world. Hence, the question could be rephrased as "How much money is in the world in terms of the market value of all finished products and services for a specified period of time?"
Fortunately, Google has this information for us.
This is a Wendy's Double Baconator. I haven't eaten something like this for years!
So anyway, a Google search told me that a Double Baconator is about $5.00 to $7.00. Slap me around if that's wrong.
If we're going to compute money as the GDP ($58,260,000,000,000) then that would be enough to buy
- 11 Trillion 652 Billion Baconators
Now, if we're going to compute money as debt ($ 40,432,610,158,058) then that would be enough to buy:
- 8 Trillion 86 Billion Baconators