How much money is there in the world

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Today the value of money se define por la confianza de las persons en él, esto se debe a que una gran cantidad del dinero que circula en la sociedad no ha sido emitida por los gobiernos nacionales ni está respaldada por las reservas de los países, sino que aproximadamente el 90% del dinero que está circulando en el mundo es dinero que commercial private banks They have been invented and only the 10% is money in coins and bills that governments officially omit.

Cash in the world

To be able to know how much money is there in the worldIt would not be enough to take into account the different coins and bills that exist. Total money is the result of different products, one of which is the case of cash. The money that circulates together with the physical money that is deposited in the safes of the banks is known as the monetary base. The monetary base is the total amount of cash that exists in the world.

Different types of money

To know and know the total money in the worldIt is also important to consider the money we have in our savings or checking accounts, checks or deposits made, in other words, the money that is immediately available. This type of money is known as Tight money and this category also includes cash, another name by which it is known is M1.

If we add to M1 the money with availability in the short or medium term, such as term deposits, the result would be a considerably higher amount, which is known as M2. If to this is added the temporary money transfers, securities other than shares, participations in money market funds, from this part, there are different typologies that include those previously mentioned and can be differentiated according to the function of their availability, as well as the virtuality of the money of which it is that is spoken, in this way we can find it in M6 and even in an M7.

Sum of bank products

After mentioning all this, it is more clearly understood how complicated it is calculate all the money in the world, pero se pueden hacer estimaciones. Se aproxima que existen más de sesenta mil billones de dólares, de los cuales solo el 1% son papeles o monedas, por esta razón podemos imaginar la relevance que disponen los productos y financial entities that control the threads of the world economy.

In these times in which the demand is evident anywhere, specifically in the macroeconomics sphereEstas fórmulas de crédito se suelen considerar por dinero y en estas áreas esa palabra es aplicable a muchas otras sustancias y entelequías. Entonces, el problema en el análisis no es tanto la gran cantidad de ceros que se agregan a medida que la definición se expande y se torna mucho más abstracta, sino el contents y los parámetros de la definición.

We must also assimilate the silver market counts que es alrededor de 14 mil millones. Lo primero que hay que saber es que, a diferencia del oro, la plata tiene unas 10.000 aplicaciones en la industria médica, electrónica, etc. Al mismo tiempo, comprenda su uso como dinero real. Consiste en comprender que el costo de los metales preciosos, ya be oro o plata, ha sido muy reprimido durante décadas por los bancos centrales, exactamente debido a que la historia ha demostrado que son el único dinero que verdaderamente vale, y es por esto que son parámetros. contra el cual sus invenciones de moneda disponen que cotizar, como el euro, dólar, yen, libra, peso, yuan, etc.

According to the value of the company capitalization more coveted than the New York Stock Exchange, Apple. With $ 616 billion, we can seriously zero out what equates to trillions of dollars.

The world debt has taken an important step, because this is due to sovereign debt in the form of national bonds, the total of this is $ 199 AT that were acquired and created out of thin air after the 2008 crisis. This means that, In a span of 8 years, the world incurred additional debt equal to 94 times the market value of Apple.

The quantum leap

This is when the world financial accounting takes a somersault, as it rises to the most exaggerated altitudes, which are derivative instruments. They are so important due to their incredible number of 1.2 trillion. Which is equivalent to almost 2000 apples.

These derivatives are said to have been created as a remedy against financial risk, but according to many analysts the opposite effect has been achieved, which is to increase risk. In reality, the financial weapons of mass destruction are the proof of this and, although it is true that they make up a compilation that adds up to zero, the tragedies that they must eventually cause among individual players, when they explode, among formal players. losers are unimaginable. and disappointed winners, whom their counterparts could not pay. In the end, everyone ends up being losers.

A simple way to do the explanation would be that in the Bank System that each country has, there are people and companies that have money that they plan to deposit in banks, in the form of checking accounts, time deposits, savings banks, etc. When a person has deposited money in a bank, this money will not be permanently stored in a vault, hoping that the person will withdraw it one day.

On the contrary, what happens is that the bank will use that money to lend it to other people who come to apply for loans. No obstante, debe retener o mantener un cierto porcentaje de ese dinero en reserva, en caso de que el client desee retirarlo en alguna vez. El porcentaje puede variar de un país a otro, y se ha establecido por el banco central de cada país que los bancos privados disponen una obligación que consiste en mantener como reserva el 10% de los depósitos, dicho de otra forma, cuando una persona deposita 10 mil dólares en un banco, este banco debe guardar mil dólares en billetes dentro de sus bóvedas y el resto se puede usar para prestarlo a otros en forma de crédito.

This system has worked this way because of the likelihood that all customers want withdraw your money at the same time, it is quite low, so if a bank has 100 clients with an average of $ 2,000 deposited each, it would have a total of $ 200,000 deposited, so the bank will have the obligation to reserve the 10 percent, equivalent to $ 20,000, while the remainder, which is $ 180,000, can be used for other purposes, such as lending to other people.

As an example, suppose that a the customer deposits a million dollars in the bank, the aforementioned bank may use up to 90% of the client's deposits to be loaned to other users, in this case it would be 900 thousand dollars. Now suppose someone else requires a loan of $ 200,000 to buy a house, another customer requires $ 300,000 to open a new commercial business, and another person requests a loan of $ 400,000 for the entire purchase of a house. Since the bank only has $ 900 of the first customer's deposits, you can give that total to all three people.

But, the bank is not going to give the 900 thousand dollars in cash to its clients, but to the add to your bank accountThis means that money is basically invented from scratch, it is just a number in the bank account database. For this reason, the million dollars that was initially deposited will remain intact in cash, only with its fractional reserve system, the bank will have the right to invent the amount up to 90 percent of the total that is kept in cash. From this dynamic, the 900 thousand dollars will have been added to the financial system.