Table of Contents

92% of Money Doesn't physically exist. It's in the form of investments, derivatives, and cryptocurrencies exceeding $1.3 quadrillion.

World’s Wealth Hits Half A Quadrillion Dollars. The world's total net wealth has hit $431 trillion, nearly half a quadrillion dollars, and over a quarter of it is controlled by millionaires.

ONE KEY MESSAGE

It's time to build longer tables, not just higher fences.

STORY - Show me the money!

Have you ever wondered how much physical 'money' is in the world?

Well, here it is.

  1. 92% of Money Doesn't physically exist. It's in the form of investments, derivatives, and cryptocurrencies exceeding $1.3 quadrillion.
  2. 8% of physical tangible money. There is approximately US$ 40 trillion in circulation. This includes all the physical money and the money deposited in savings and checking accounts.
  3. 85% owned by 10% of the global population
  4. 2665 billionaires own 50%
  5. 60,000 ultras (100 million +) own 15%
  6. Millionaires own 25%
  7. Which leaves ~15% owned by 90% of the global population.

1. 92-93% OF MONEY IS ALREADY DIGITAL

This means that most of the money you earn, transact with, use to buy goods/services and so on exists only on computers and hard drives. Only an estimated 8 percent of currency globally is physical money.

Digital money (or digital currency) refers to any means of payment that exists in a purely electronic form. Digital money is not physically tangible like a dollar bill or a coin. It is accounted for and transferred using online systems.

We all use digital money right now with our fiat currencies, such as dollars or euros. We use digital money and exchange it using technologies such as smartphones, credit cards, and online cryptocurrency exchanges. In some cases, it can be converted into physical cash through the use of an ATM.

This also means that you are all ready for a new virtual and digital economy. Considering you have always been using one!

KEY TAKEAWAYS

  • Digital money is money in purely digital form. It is not a physically tangible asset like cash or other commodities like gold or oil.
  • Digital money can streamline the current financial infrastructure, making it cheaper and faster to conduct monetary transactions. It can also ease monetary policy implementation by central banks.
  • Examples of types of digital money are cryptocurrencies, central bank digital currencies, and stablecoins.
  • Digital money is susceptible to hacks and can compromise user privacy.

2. ONLY 8% OF MONEY CAN BE HELD PHYSICALLY

In 2013 there were about $1.2 trillion dollars of U.S. currency in circulation. Today, According to the Federal Reserve, there was $5.8 trillion in the m0netary supply stream as of March 2021, the most recent data available.

That's a 4-5x increase in printed money in the last 10 years alone!

This money supply stream is in bank accounts of various types, and the Federal Reserve has tracked these funds in three different values known as the M1, M2, and M3 money supplies. (M3 has since been dropped. More on that below.)

M1 represents all the currency outside the U.S. Treasury, Federal Reserve banks, and the vaults of depository institutions.

It also includes demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, foreign banks, and official institutions), the Federal Reserve float, and other liquid deposits.

In March 2021, the M1 money supply for U.S. dollars equaled about $18.7 trillion [source: Federal Reserve].

M2 is the M1 supply, plus small-denomination time deposits (less than $100,000).

In March 2021, the M2 money supply was about $19.9 trillion [source: Federal Reserve].

M3 is M2 plus larger CDs. As of March 2006, the Fed stopped tracking the M3 money stock as an economic indicator because it felt it did not add any information on economic activity that was not already available from M2 [sources: Federal Reserve].

M3 money supply, unknown.

in May 2021 could expect to find approximately $19.9 trillion in existence, using the M2 money supply definition.

If you just want to count the value of notes and coins, there are about the U.S. $2.1 trillion worth of notes and coins floating around the globe [source: Federal Reserve].

In simple terms....

According to the U.S. Census, there were 332,290,964 people alive in the U.S. in May 2021. If you took all the cash and divided it up equally, each person should have about $17,454 in cash on them (or stuffed under the mattress). Obviously, there's some money missing (Pablo Escobar burying it somewhere), but there's an easy explanation for that:

The Federal Reserve says that at any given time, between one-half and two-thirds of the M0 money stock of U.S. dollars is held overseas.

3. Next question, Who holds the world's wealth?

Out of 7.9 billion people, the top 10% of adults hold 85% of the world's wealth.
  • 85% owned by 10% of the global population
  • 2665 billionaires own 50%
  • 60,000 ultras (100 million +) own 15%
  • Millionaires own 25%
  • Which leaves ~15% owned by 90% of the global population.

The disparity is real. The centralized system is geared in the favor of the minority, not the majority. I can see why people are seeking change and equality in finances, value, distribution, and what money represents. Especially when considering that the 90% live in debt and scarcity to the systems that the 10% create and leverage.

It's time to build longer tables, not just higher fences.

We can co-create a new world and system where everyone wins or at least has their basic human needs met as a starting point.

Over 50% of global wealth held by just 1% of people

  • Over half of the world's net wealth belongs to the top 1%,
  • 2665 people in the Billionaires club (see below)

The 85% held by the 10% of people

  • The top 10% of adults hold 85%,  
  • Where the 2665 billionaires own close to 50% of it.
  • The other 35% is owned by people with 1 million to 100 million dollars in net worth.  
  • 60,000 own the other 15% of global wealth "ultras": Currently, there are 60,000 ultras (net worth 100 million-plus) in the world, controlling about $22 trillion in wealth, or 15% of all financial wealth.
  • The other 25% of global wealth with millionaires (HNWI's): High net worth individuals (HNWIs), or people worth over $1 million, own a quarter of the total, approximately $126 trillion, according to the 2021 Global Wealth Report.

90% of people hold less than 15%

  • While the bottom 90% hold the remaining 15% of the world's total wealth,
  • The top 30% of adults hold 97% of the total wealth.

80% of the world lives on less than $10 per day

  • 700 million live on less than $2 a day (extreme poverty)

The rich will get richer, the poor will get poorer.

  • The amount of financial wealth in the world reached $250 trillion in 2020, having grown 8.3% despite the pandemic's worst effects.
  • Where 40% of financial wealth is with the millionaires: When it comes to financial wealth (which includes investable assets such as cash, equities, funds, and bonds), the share controlled by HNWIs is even larger at 40%.
  • At the top end of the high net worth segment, billionaires have seen their fortunes soar. Adding over 600 people to the billionaires club in the pandemic. Forbes annual billionaires list now includes 2,755 billionaires, who collectively grew their wealth from $8 trillion in 2020 to $13.1 trillion this year.

4. Global balance Sheet

All of the World’s Money and Markets in One Visualization (click here)
  • Global Wealth hits 1.34 Quadrillion US dollars in 2020. 92% of it is digital and only 8% can be physically held.
  • Global Debt is set to exceed $255 -300 trillion in 2022.
  • The federal reserve is the one controlling power of the centralized financial system since 1914-1944. Controlling most of the world's assets.
  • The USD is currently accepted as the world currency in 2020.
  • The top 1%, just 10 people control 85-323 Billion each.
  • The 10 WEALTHIEST FAMILIES control 41-215 billion each.
  • Just 5 companies alone hold over 5.5 trillion dollars and 24% of the fortune 500 wealth.

5. Global Wealth - 1.34 Quadrillion US dollars

Today, 2020 in a pandemic, the world’s Wealth Hits Half A Quadrillion Dollars

The world's total net wealth has hit $431 trillion, nearly half a quadrillion dollars, and over a quarter of it is controlled by millionaires. Where derivatives hold over 1 quadrillion (70-80%)of the global wealth.

That $431 trillion figure includes "the sum of financial wealth and real assets, net of liabilities," explains Anna Zakrzewski, author of a new report from Boston Consulting Group.  70 trillion more than previously calculated.

6. DERIVATIVES MARKET CAP- ~$1 QUADRILLION

The derivatives market is, in a word, gigantic—often estimated at over $1 quadrillion on the high end.

The derivatives market is said to be over $1 quadrillion dollars on the high end, but some analysts say the market is grossly overestimated. The higher end of the estimates includes the notional value of derivative contracts. There is a large difference in the notional value and actual value of derivatives—$640 trillion versus $12 trillion—as of the first half of 2019.

7. GOVERNMENTS & GOLD RESERVES

The current price of gold as of December 16, 2021, is $1,798.20 USD per ounce. Where we can estimate the total market value of gold today by 201 296 tonnes x 35,274 ounces per tonne x $1798.2 per ounce.  

Total market value of Gold = $12 768 146 260 012 USD  ($1.27 quadrillion US Dollar value)

If all of the above-ground gold were stacked beside each other, the resulting cube would only measure 22 meters on each side, which is a testament to the metal’s rarity. But where exactly is all of this mined gold?

India and China have been the largest markets for gold jewelry consumption, combining for more than 50% of global jewelry demand in 2020.

8. THE TOP 1% CONTROLLING GLOBAL WEALTH

Just 10 people own 85-323 Billion each.

The U.S. still has the most, with 724, followed by China (including Hong Kong and Macao) with 698. The number of billionaires on Forbes’ 35th annual list of the world’s wealthiest exploded to an unprecedented 2,755--660 more than a year ago.  Do you wonder how the top 1% can "explode" during a global pandemic and recession?

Here is a list of the world's billionaires in 2020, according to Forbes.

  • Elon Musk. $323 Billion (USA, Tesla, SpaceX etc)
  • Jeff Bezos. $200 Billion (USA, Amazon)
  • Bernard Arnault. $168 Billion. (French, 70 +brands including Louis Vuitton)
  • Larry Page. $131 Billion. (USA, Co-founder Google)
  • Bill Gates. $131 Billion. (USA, Microsoft)
  • Sergey Brin. $127 Billion. (USA, co-founder Google)
  • Mark Zuckerberg. $118 Billion. (USA, Facebook, meta etc)
  • Larry Ellison. $114 Billion. (USA, Oracle)

It's safe to see that the top 1% is populated by US citizens and corporations giants. Mainly in the fields of technology, finance, and investments.

9. 10 WEALTHIEST FAMILIES - 41-215 billion each.

At $215 billion, the Waltons are the richest family in the world thanks to their massive stake in Walmart, the world's largest company by revenue.

The fourth generation of the Mars family, the second-richest clan after the Waltons, currently runs the eponymously named Mars candy company.

Although estimated to be $95 billion, the exact wealth of the House of Saud is difficult to accurately assess due in large part to the size of the royal family.

The least wealthy family on this list is the Albrechts, who still have $41 billion in assets thanks to their highly popular grocery store chains.

By focusing solely on families, this list does not include the richest people on Earth, including Jeff Bezos, Elon Musk, and Bill Gates

A curious point to note is that while over 150 million people were pushed into extreme poverty (less than $2 a day) during the pandemic, the billionaires club welcomed 500 new people to the celebrity list. Increasing the disparity between the top and bottom.

So when it comes to investors in the federal reserve and the federal reserves direct link to US-based banks and corporations. It becomes simple to see who has invested interest in this private entity, that governs the world economies since the first world war.

It's the Central bank (federal reserve USA), Government reserve banks; Where the federal reserve is funded by private Investors (individual, families, corporations), which supports the US government and earns interest, USD is then the world currency, which drives/backs global economies, then everyday people.

10. TOP 5 FORTUNE 500 CORPORATIONS

5 companies alone hold over 5.5 trillion dollars. Coincidentally, all US-based businesses with direct links to the federal reserve banks.  

Out of the top fortune 500 companies. Just 5 corporations hold over 24% of the wealth; Microsoft, Apple, Amazon, Alphabet, Facebook, and Google wouldn't be far behind. If you read between the lines, investing in future technology seems to be a good place to start.

11. Global Debt - $255-300 trillion

With global debt rising to $226 trillion as the world was hit by a global health crisis and a deep recession. Debt was already elevated going into the crisis, but now governments must navigate a world of record-high public and private debt levels, new virus mutations, and rising inflation.

At over 322% of GDP, global debt is now 40 percentage points ($87 trillion) higher than at the onset of the 2008 financial crisis—a sobering realization as governments worldwide gear up to fight the pandemic.

Meanwhile, while the billionaires club welcomes 665 new people. The rest of the world experiences this.....

In 2020, we observed the largest one-year debt surge since World War II,
  • Global debt rose by 28 percentage points to 256 percent of GDP, in 2020, according to the latest update of the IMF’s Global Debt Database.
  • Global public debt has surpassed 60 trillion according to the world debt clock.
  • Borrowing by governments accounted for slightly more than half of the increase, as the global public debt ratio jumped to a record 99 percent of GDP.
  • Private debt from non-financial corporations and households also reached new highs.
  • The rise in debt levels was the sharpest among emerging markets, with total debt rising $3.5 trillion in the second quarter from the preceding three months to reach almost $92 trillion.

Although the central financial system has not made the shift from interest to balanced sheets policies in favor of interest rate policies. It has made way for blockchain and the balanced ledger for "good money.

See the previous article on the history of blockchain and cryptocurrency. Coincidently, this technology and its first currency Bitcoin was given to the world anonymously in 2008. A solution to the cyclical pain of financial crises.

Simply speaking. Governments, businesses, and the general public are all in debt.

WHO IS THE WORLD IN DEBT TO?

The ELEPHANT in the room question is ...to who are we in debt to; governments, corporations, people?

Who lends money with contracts and interest rates attached? Go back to the start of this section to connect the dots. Who is the world in debt to? Consider who runs and back the world's economies.

Total debt levels, which include government, household, and corporate and bank debt, rose $4.8 trillion to $296 trillion at the end of June, after a slight decline in the first quarter, to stand $36 trillion above pre-pandemic levels. Why? we are borrowing money we don't have and printing new money at record levels.

"If the borrowing continues at this pace, we expect global debt to exceed $300 trillion," said Emre Tiftik, IIF's director of sustainability research.

Some good news. Just recently in Q2 2021, the debt-to-GDP ratio declined for the first time since the start of the pandemic as economic growth rebounded, the Institute of International Finance (IIF).

Global debt across all sectors rose. Everyone in debt, but to who? The only people that are recording record profits are 1-10% of the world and the central banks who don't physically own any of the money they are lending you. Yet they are printing money to accumulate real-world assets and an unprecedented rate. Positioning themselves financially based on assets, rather than the 92% of the money that doesn't exist. Smart. It's almost as if they know something the rest of the world doesn't.

  • With the COVID-19 fiscal response in full swing, the global debt burden is set to rise dramatically in 2020/2021/2022; gross government debt issuance soared to a record high of over $2.1 trillion last month, more than double the 2017-19 average of $0.9 trillion.
  • FX debt in EMs now exceeds $5.3 trillion. Excluding China, FX debt makes up 20% of EM debt outside the financial sector.
  • Refinancing risk alert: Over $20 trillion of global bonds and loans come due through end-2020;  $4.3 trillion of that in EMs. Emerging markets will need to refinance $730 billion in FX debt through the end-2020.

The federal reserve holds the power to keep stability, or not. We simply have to trust that they will do the right thing

12. WHAT DOES THIS MEAN FOR THE AVERAGE HOUSEHOLD?

The COVID-19 crisis has brought into the spotlight the key role that wealth can play in cushioning income shocks. While many wealthier households could afford to wait for the dust to settle, and some may even have seen the value of their assets surge, those with little or no wealth were often forced to take up debt or increase their borrowing to make ends meet (OECD, 2021[1]; Credit Suisse, 2021[2]).

High debt and missing wealth buffers (liquid assets) are the two ingredients of financial insecurity of households.

In the average OECD country, the typical indebted lower-income household owns liquid financial assets worth 18% of their debt, with this value ranging from 1% in Greece to almost 80% in Austria.

Over the past decade, in about half of the countries with available information debt levels for the median indebted lower-income household has increased faster than its liquid assets implying a more precarious financial situation.

Already in 2018, in the average OECD country, more than 40% of lower-income individuals did not have access to sufficient savings they could draw upon to weather a fall in household income,

i.e. 40% of households globally had less than the equivalent of three weeks’ household disposable income put aside in the form of emergency savings. This means that in the absence of income, 4 in 10 people could only survive 3-4 weeks.

Many households tried to deleverage and pay off their debt, but their efforts have often been constrained by stagnating income, and many of them had to borrow anew.

This means that under the illusion of booming housing markets, homeowners started borrowing against their increased collateral to fund spending on consumer goods and services.

All in all, indebted lower-income households became overleveraged and extremely vulnerable to the risk of income shocks and drops in assets prices, risks that materialized with the financial crisis.

13. FUTURE PREDICTIONS: 2020- 2025

$65 Trillion Created Over The Next Five Years, where the rich get richer.

The total amount of financial wealth in the world is set to grow by $65 trillion between 2020 and 2025. Including real assets, the world's total net wealth will surpass $500 trillion sometime before 2025.

However, the share owned by individuals with more than $100 million will grow the fastest. Boston Consulting Group calls these people "ultras."

Currently, there are 60,000 ultras in the world, controlling about $22 trillion in wealth, or 15% of all financial wealth.

Between 2020 and 2025, these ultras will grow that figure by 6.7% year-on-year, a much faster rise than any other income group.

Most of this growth will happen within the top ten richest countries in the world: The U.S., China, Germany, Hong Kong, France, India, the U.K., Italy, Russia, and Canada. However, most will be from China.

Nation wise. By 2029, China will be home to $10.4 trillion in ultra assets, more than anywhere else in the world, predicts the Global Wealth Report.

SUMMARY

It has commonly been said that a "bad system' will beat a good person every day of the week. Also, that we as individuals and a collective society will rise and fall to the level of our systems.

In 2021 during a pandemic, we have seen something interesting happen. The rich have got richer. We welcomed 600 new billionaires to the top 1%. US corporations made record profits. The federal reserve accumulated more assets as they printed money out of thin air. Meanwhile, 40% of households couldn't survive longer than 3-4 weeks without work and external support.

We have also seen 150 million people pushed into extreme poverty during the same time period. Every day people and household have been forced to accumulate more debt, borrowing against any assets they have. Whilst seeing everyday goods at their local grocery store increase by 6-10% globally as inflation starts to kick in.

It seems like we are ready for a new, balanced, transparent, and positively geared ledger for decentralized finances.
It's time to build longer tables.

CALL TO ACTION

Share an experience.

How have you managed to surive the last 2 years of the pandemic, even in the absence of cash flow or work?

REFERENCES

Our reference guidelines HERE

With all our REFERENCES We have done our best to reference everyone’s expert opinions, peer-reviewed science, and original thoughts, HIGHLIGHTED IN THE TEXT.  So that you can go direct to the source as you read.

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