How much money and wealth is there in the world? Who owns it? Where does it come from and how is calculated for the differing markets? All of that is explored here.
“When the last tree has been cut down, the last fish caught, the last river poisoned, only then will we realize that one cannot eat money” Indian Proverb
World Wide Wealth
In 2020 the "Money" in form of investments, derivatives, and cryptocurrencies exceeds $1.3 quadrillion. According to the central banks, there is approximately US$ 40-93 trillion in circulation: this includes all the physical money and the money deposited in savings and checking accounts. However, this number is hard to predict based on many factors shared below. Global debt hit record highs that haven't been seen since the second world war in late 2020, reaching close to 300 trillion dollars.
The intention of this in-depth review of the world's balance sheet is to provide a snapshot of "money", 'wealth distribution" and the disparity between the two ends of humanity. Leaving you with one final question. Can we do it better, together?
Global Wealth Balance Sheet
Total Wealth (431T) - Total Debt (292T) = 139 Trillion +
Today, 2020 in a pandemic, the world’s Wealth Hits Half A Quadrillion Dollars
The world's total net wealth has hit $431 trillion, nearly half a quadrillion dollars, and over a quarter of it is controlled by millionaires.
Of that, there are approximately US$ 40 trillion U.S dollars in circulation, both physically and digitally. This includes all the physical money and the money deposited in savings and checking accounts.
When all things 'Money" is considered. Money supply (40-93 trillion), derivatives (1 quadrillion in contracts), and cryptocurrencies (Digital currencies 2-3 trillion), Investments (the rest) may exceed $1.3 - 2 quadrillion U.S dollars. However, the derivative market cap value is something that is up for debate, as is the value of money itself. I will explain this further in the post.
Quick Breakdown of this Global wealth "431 Trillion"
- Just 10% of people own 85% of this global wealth
- 90% of the global population lives on less than $10 per day.
- Global Money supply - 40 - 93 trillion (M0, M1, M2, M3)
- 8% is Physical Money Supply (M0): 2.1 trillion banknotes and coins
- 92% is Digital Money Supply (M2,3,4): 37+ trillion in savings, checking accounts, etc.
- Side note: ~1 quadrillion dollars is held in derivatives (contracts), not included in the number above. It would take global wealth over $1.5-2 quadrillion dollars with all things considered.
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.
How is this 431 trillion in global wealth distributed? Well, Over 85% of the world's global wealth is controlled by less than 10% of people, whereas is 50% of global wealth is controlled and owned by less than 1% (see billionaires club); specifically speaking, 10 billionaires and 10 families. Where 90% lives on less than $10 a day. an interesting contrast, right?
Simply speaking Over 50% of global wealth is held by just 1% of people.
The distribution of wealth and resources needs to be decentralized. Any system that enables the few to win at the expense of the many, is not a well-designed or fair system. What about we all win and thrive together as one. At least have the resources to meet all our basic human needs.
ONE MESSAGE - Global Wealth Distribution
The Harsh Reality of a pandemic is that 10% of the population owns 85% or more of global wealth, money, and assets. Where 90% live on less than $10 a day.
Are you ok with this distribution?
Philosophers have asserted that true character is defined under pressure. If we are ok seeing 500 billionaires added to the exclusive club of 2500 individuals, whilst 150 million get pushed into extreme poverty at the same time.
Then perhaps apathy is the war we fight and we aren't the smartest species after all.
Perhaps we are a parasite worse than the "virus", driven by ego, self-gratification, and self-gain at the expense of each other and the natural world. At least the virus allows 99.95% of people to thrive. We have destroyed over 90% of wildlife in just 50 years since 1970, putting us on the verge of the 6th global mass extinction. Creating a world where 1 billion human beings go to bed hungry each night, in a world where 40% of food is wasted globally each year. What a paradox.
I didn't want to make this contrast, but I need to hit your heart, not your head. Let's come back to compassion and empathy as you read this mind-blowing review of global wealth and its distribution to the few, at the expense of the many.
How is that wealth distributed? See for yourself here.
The data in this graph was put together back in 2012 using an approach suggested by Branko Milanovic, at the time lead economist in the World Bank’s research department, and author of The Haves and the Have-Nots. Incidentally, Milanovic went on to achieve mainstream fame for the so-called ‘elephant graph’.
For the bottom, 80% of the income distribution, they used World Bank figures from their database ‘PovcalNet’. As this data set was not considered reliable for the top 20% of the income distribution, we substituted them with figures from Branko Milanovic’s own work compiling national household surveys.
* The figures below have been gathered from multiple sources, both direct from the federal reserve, central banks, and independent reviews.
13 GLOBAL MARKETS that I will cover below.
Global Wealth Balance Sheet
- Global wealth - 431 Trillion (10% own 85%)
- Global Contracts 'Derivatives"~$1 Quadrillion
- Global Money - 40-93 trillion
- Global Debt - 292 Trillion +
Non-Tangible Assets (Largely Digital, Tech-based)
- Stock Market Cap - 122 trillion
- Fortune 500 Market Cap - 22.6 Trillion
- Cryptocurrency Market Cap - 2-3 trillion
Tangible Assets (Physical "can touch" assets)
- Property Market Cap - 9-11 trillion
- Gold Market Cap - 11.431 Trillion
- Silver Market Cap - 1.286 Trillion
- Federal Reserve Balance Sheet - 7 trillion +
- Military Spending - 1.98 trillion
- US budget deficit - 2.8 Trillion
The future seems to be clear. It's digital, technology-based, and flows in virtual reality. No longer in the physical reality.
- 92% of the money is digital, 8% is physical money.
- 90% of assets are not tangible real-world assets (virtual), 10% are tangible.
1. GLOBAL WEALTH- 431 Trillion (10% own 85%)
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.
85% of the "world's money" is owned by 10% of the global population. Where Just 10 people own 85-323 Billion each and just 10 families own 41-215 billion each.
Here is a list of the world's billionaires in 2020, according to Forbes.
- 50% owned by just 2665 billionaires
- 25% owned by Millionaires
- 15% owned bt 60,000 ultras (100 million +)
- 15% owned by 90% of the global population. Yep, now you see it.
71 percent of the world’s population live on an income below $10 a day & About 9.2% of the world, or 689 million people, live in extreme poverty on less than $1.90 a day, according to the World Bank.
Just a hypothetical question. But, how much money does one person or family need to live a happy, healthy, and connected life?
Depending on the cost of living to meet basic human needs such as food, water, shelter, safety, etc. It can vary from $5-10,000 USD per year in "developing countries to $70,000 USD per year in "developed countries.
The irony of the pandemic crisis. In the same time period 2020-2021, over 150 million people were pushed into extreme poverty (less than $2 a day) whilst the billionaires club welcomed 500 new people to the celebrity list. Increasing the disparity between the top and bottom. Where 10% own 90% of all money, and just 10 people and 10 families own most of that 90%. Centralized finances are clearly geared to favor the few, not the many. Providing you are a US citizen or corporation as it seems.
2. DERIVATIVES MARKET CAP ~ $1 QUADRILLION
The derivatives market is, in a word, gigantic—often estimated at over $1 quadrillion on the high end.
How can it be a quadrillion-dollar market?
- Largely because there are numerous derivatives in existence, available on virtually every possible type of investment asset, including equities, commodities, bonds, and currency.
- Some market analysts even place the size of the market at more than 10 times that of the total world gross domestic product (GDP).
- However, there is a large difference in the notional value and actual value of derivatives—$640 trillion versus $12 trillion—as of the first half of 2019.
The larger estimates come from adding up the notional value of all available derivatives contracts.
But some analysts argue that such a calculation doesn't reflect reality
That the notional value of a derivative contract's underlying assets, the financial instruments the derivative is pegged to, does not accurately represent the actual market value of derivative contracts based on those assets.
As an example, what is the value of money, now that it is no longer pegged to an underlying asset like gold or silver since 1971? Many experts assert that it holds zero tangible value.
Today's fiat money is backed entirely by social agreement and faith in the issuer. If you don't believe it, see the complete history of money
A Derivative Defined
Financial security with a value that is reliant on, or derived from, an underlying asset or group of assets. The underlying asset can be a stock, an index, or a commodity. Derivatives allow the investor to manage the risk associated with an underlying asset with no modification of the position in that asset.
A Derivative Contract Defined
Derivatives & CCPs A future exchange compromise to be executed on a specific date (expiration date or maturity), and in its investment is not necessary the payment of the “principal” (this is named the “leverage effect”). This “leverage effect” means that these derivative products are instruments useful for risk management
3. GLOBAL MONEY SUPPLY ~ 40 Trillion +
Accounting for it all. the 92% of Money that Doesn't physically exist and the 8% of physical tangible money.
There is approximately US$ 40 trillion in circulation. Digitally and physically. This includes all the physical money and the money deposited in savings and checking accounts. Where just 2.1 trillion (8%) is Physical Money in the form of coins and notes. The other 37+ trillion (92%) is Digital Money.
- Physical money (M0): Accounting for just 8% of physical money. There is roughly $2.1 trillion U.S. worth of notes and coins floating around the globe [source: Federal Reserve].
- Digital money (M1, M2, M3): This means that the other 92% of digital money sitting in savings and checking accounts equates to roughly 37.9 Trillion U.S. dollars. M1 Money - 18.7 Trillion, M2 money - 19.9 trillion. M3 ? unknown.
Back 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!
There are 4 types of money. Typically, different types of money are classified as “M”s. They range from M0 (narrowest) to M3 (broadest), depending on the policy formulation of the country’s central bank.
The digital 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.)
- M0: All physical currency in circulation, including coins, notes, and bills, is called M0 money.
- M1: includes all of the currency in the M0 money supply, plus all of the money held in demand deposits, traveler's checks, other checkable deposits, and negotiable order of withdrawal. Basically, M1 money contains currency and assets that can be rapidly converted into cash.
- M2: includes all elements of M1, plus saving deposits, mutual funds, money market securities, and other time deposits. Usually, these assets are used as an exchange medium and are less liquid than M1.
- M3: is M2 plus large certificates of deposits, institutional money market funds, and short-term repurchase agreements. These assets are less liquid than other elements of the money supply.
Mo represents all physical currency in circulation
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].
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.
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.
4. GLOBAL DEBT - 296 Trillion
Policymakers must strike the right balance in the face of high debt and rising inflation.
In 2020, we observed the largest one-year debt surge since World War II, with global debt rising to $226 trillion as the world was hit by a global health crisis and a deep recession.
When 2020 dawned, the global economy had just notched its 10th straight year of uninterrupted growth, a streak most economists and government finance officials expected to persist for years ahead in a 21st Century version of the “Roaring ‘20s.”
But within two months, a "mysterious new virus" first detected in China in December 2019 - the novel coronavirus - was spreading rapidly worldwide, shattering those expectations and triggering the steepest global recession in generations. End result was this...
The International Monetary Fund estimates the global economy to have shrunk by 4.4% this year compared with a contraction of just 0.1% in 2009 when the world last faced a financial crisis.
Household Debt to GDP ratios skyrocketed, unemployment hit historic 16% all-time highs in the USA. Only to recover instantly, as if by magic. (see below)
The increase was led by households that added $1.5 trillion of debt during the first half of the year, driven by the U.S., China, and Brazil, with home buyers tapping into low-interest rates and stepping up spending as countries emerged from lockdowns.
Meantime, government and corporate debts increased by $1.3 trillion and $1.2 trillion, respectively, over the six-month period.
5. GOLD MARKET CAP - 11.431 Trillion
The Market Capitalization of Gold is currently around $11.431 Trillion
The amount of above-ground reserves for Gold is estimated to be around 197,500 metric tonnes according to the World Gold Council (End-2019). Note that the estimated above-ground Gold reserves can vary by up to 20% from one source to another: We will explore why that is below.
As a consequence, it is safe to say that the current Market Cap of Gold is between $9.144 T and $13.717 T.
If you google, who owns the world's gold. It will say that 'The United States holds the largest stockpile of gold reserves in the world by a considerable margin at over 8,100 tons. The U.S. government has almost as many reserves as the next three largest countries combined (Germany, Italy, and France).'
But do they really? With over 200,000 metric tonnes of gold that we "know" to have been mined legally. Is it possible that there is much more in circulation? Is it possible that governments do not actually hold this gold anymore either?
For anyone that has watched the "Heist" on Netflix, it is an interesting tale about stealing the Spanish gold reserves from their central bank. They managed to do it, replacing the gold bars in a central bank vault with brass coated in gold. When the public knew that the gold had been stolen, stock markets and other markets crashed in an instant realizing that their "money" was no longer backed by something tangible. When the gold returned that same day, the markets recorrected in an instant as if by magic. Even though the actual gold had been replaced by fools' gold. The public was none the wiser and as long as the Spanish government took the secret to their graves, no one would ever know that their money was an illusion, backed by nothing more than the idea of what was in the central bank vault.
The World Gold Council estimates
that miners have historically extracted a total of 201,296 tonnes of gold, leaving another 53,000 tonnes left in identified underground 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.
Nearly half of all the gold ever mined is held in the form of jewelry.
they shared that It's a common misconception that the federal reserve owns most of the world's gold.
It’s a common misconception that the world’s major central banks and monetary authorities own large quantities of gold bars. Most of them do not. Instead, this gold is owned by the sovereign states that have entrusted it to the respective nation’s central bank, and the central banks are merely acting as guardians of the gold.
Tracing the ownership question a step further, what are sovereign states? A sovereign state is an entity with a legal personality that is represented by one government. And with each government representing the people of that sovereign state, in essence, the large gold hordes managed by the central banks are in fact pools of gold owned by the state for the benefit of its citizens.
It’s well documented on this website and others that central banks are non-cooperative in disclosing important details about gold reserves which they hold and manage, details such as weight lists and auditing details. It has now been demonstrated that the majority of these central banks only ‘manage’ this gold on behalf of their respective sovereign states. The most common excuse of the central banks in their non-cooperation is confidential, with a close second being deflecting the question, and a common third being to ignore the question.
It is hard to believe that there is a large supply of mined and refined gold beyond the 170-200,000+ metric tons that can be identified in large disclosed holdings plus estimates of jewelry, dental, and other uses.
That accounting undoubtedly misses some gold, perhaps 10,000 metric tons, perhaps as much as 30,000. But I find it implausible that there are more than 200,000 metric tons.
We know of another 50,000 metric tons or so that could be mined with existing technology at a reasonable cost. Computers etc. Again there is certainly some undiscovered gold, and gold that could be extracted with new technologies or if the price of gold rose high enough to make it worthwhile.
But if you want to double the world gold supply or more, your best bet is probably asteroid mining. Especially considering Gold apparently appeared on earth millions of years ago after an asteroid collision.
United Kingdom: Under London's streets lies a hidden gold mine: vaults that stash one-fifth of all the gold held by the world's governments.
About one-fifth of all the gold held by the world’s governments is in London. In total, 6,256 tonnes of gold are stored in vaults in and around London – collectively worth about £172 billion ($248 billion).
China: No one knows for sure if China has 20,000 tons of gold in reserves. But if indeed it has that deep a gold reserve, Beijing can take on the US dollar by using gold for international trade. It would 3x the USA's 8-tonne holdings and flip the "money" game in an instant.
6. SILVER - 1.286 Trillion
The Market Capitalization of Silver is currently around $1.286 T. This value was obtained by multiplying the current silver price ($22.86 per once) with the amount of silver that is estimated to have been mined so far.
The amount of Silver that is estimated to have been mined is 1,751,000 metric tonnes (CPM Group Silver Yearbook 2019). These values are approximations and estimating the Market Cap of silver is more complicated than for Gold.
It is also noteworthy that a large quantity of silver has been lost/destroyed due to industrial applications.
7. PROPERTY MARKET CAP - 9-11 trillion
The size of the professionally managed global real estate investment market increased from $9.6 trillion in 2019 to $10.5 trillion in 2020.
The real estate market’s convincing expansion in the face of the COVID-19 pandemic seems to underscore investors’ resolute search for returns across asset classes.
Property ownership required a stock market until recently...
in 2006..... “A stock market is crucial to the existence of capitalism and private property. For it means that there is a functioning market in the exchange of private titles to the means of production. There can be no genuine private ownership of capital without a stock market: there can be no true socialism if such a market is allowed to exist.” (Murray Rothbard, “Making Economic Sense,” 2006)
In 2021.....Until "smart contracts'' were created, thanks to evolving and decentralized finances. A smart contract is a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code.
Here are some real-life examples of Real-Estate moving onto blockchain smart contracts.
The future of property may no longer be tangible either.
A plot of digital land was just sold in the metaverse for $2.43 million — more than most homes in NYC and San Francisco cost
A plot of digital land in Decentraland — an online, virtual-only environment — sold for a record $2.43 million worth of cryptocurrency on Tuesday, more than double the prior record high for virtual real estate, which was more than $913,000.
That's also a smidge higher than the average home price in Manhattan and well above prices in the other boroughs, as well as dwellings in San Francisco.
Non-Tangible Assets (90%)
8. STOCK MARKET CAP - 122 Trillion
The stock market, also known as the share market or equity market, is a fundamental component of a free-market economy.
The New York Stock Exchange is the largest stock exchange in the world, with an equity market capitalization of just over 28.2 trillion U.S. dollars as of October 2021.
The U.S. equity markets are the largest in the world and continue to be among the deepest, most liquid, and most efficient, representing 41.1% of the $122 trillion global equity market cap, or $50 trillion based on recent estimates.
Soaring Value of Intangible Assets - 21 trillion
We now know that 92% of Money Doesn't physically exist. It's in the form of investments, derivatives, and cryptocurrencies, and non-tangible assets exceeding $1.3 quadrillion.
When it comes to the S&P 500’s market value, the abstract is in.
Not only is this a historical high—it’s a nod to just how prevalent technology has become in our lives.
Wait until the metaverse! lol! Will we all be buying property in virtual reality, which has no tangible value to our external reality? Yet, having a similar price tag. Imagine determining whether to buy a 500k property in the metaverse versus the real world. Only one can grow food and provide shelter for basic needs.
Intangible assets are holdings that don’t carry any physical or financial embodiment. This includes R&D, intellectual property, and computerized information such as data and software. While they’re often difficult to value due to certain accounting practices, today, intangibles are worth over $21 trillion.
Money is moving quickly from 'centralized financials' to "technology', 'decentralized finances" and even healthcare.
9. FORTUNE 500 - 22.6 Trillion
This year's Fortune 500 marks the 65th running of the list. In total,
Fortune 500 companies represent two-thirds of the U.S. GDP with $13.7 trillion in revenues, $1.1 trillion in profits, $22.6 trillion in market value, and employ 28.7 million people worldwide.
USA-based enterprises Microsoft, Apple, Amazon, Alphabet, and Facebook make up the top 5. Above are the top 4 countries host to fortune 500 companies, followed by the top 5 corporations that make up 25% of the total value in the fortune 500 lists, leading the wealth accumulation race below. Notice that they are all 'tech-based" companies. An insight for future investments.
10. CRYPTOCURRENCY MARKET CAP - 2-3 trillion
The global market cap for cryptocurrency has fluctuated between 800 billion and 3.2 trillion in the past 12 months of the pandemic.
Centralized Banking Balance Sheet
11. FEDERAL RESERVE BALANCE SHEET (Ce Fi)
The Fed's balance sheet sits at over 7 trillion dollars. Over 40% of all this total has been added in 2020 alone!
The Federal Reserve System is the central bank of the United States and is responsible for the nation's monetary policy. The Fed's primary goals are to promote maximum employment, stable prices, and manage long-term interest rates. The Fed also helps to create stability in the financial system, especially during times of recession—or negative economic growth—and financial instability.1
The Fed uses various programs and initiatives to accomplish its goals, and the result usually leads to a change in the composition of the Fed's balance sheet. The Fed can increase or decrease the amount and scope of assets or liabilities on its balance sheet, which in turn, increases or decreases the money supply within the economy. However, some critics argue the Fed has gone too far and tried to do too much in response to recessions and crises.
- Like any private business organization, the Federal Reserve maintains a balance sheet listing its assets and liabilities. Because it is a private business Ironically.
- The Fed's assets include various Treasuries and mortgage-backed securities purchased in the open market and loans made to banks.
- Liabilities for the Fed include currency in circulation and bank reserves held at commercial banks.
- During economic crises, the Fed can expand its balance sheet by buying more assets, such as bonds—called quantitative easing (QE).
What the graph represents. Over a three-and-a-half-month period, the US Federal Reserve, the American central bank, has printed a little over $3 trillion in order to counter the economic impact of covid-19. If you want to understand it in less than 1000 words, click here.
- The highest increase in the money printed happened during the weeks ending 25 March and 1 April, when the assets of the Fed went up by 12.6% and 10.6%, respectively
- On February 26, the size of the Federal Reserve’s balance sheet was $4.16 trillion. By June 10, this had jumped to $7.17 trillion. It literally printed 3 trillion dollars with the click of a button. Remember that money is no longer backed by gold, silver, or any other tangible asset since 1971. It's basically a 'social agreement".
What are the lessons to be learned from this?
The idea behind putting money into the economy was to drive down interest rates and hope that people and businesses borrow and spend more, and in the process revive the American economy.
Say what? Hope that people choose to go further in debt and spend more money? With inflated prices? Yep, that's the solution.
Resulting in... you guessed it inflation! Yayy.. (not really)
The impact inflation has on the time value of money is that it decreases the value of a dollar over time as you see in the graph above. We have been running a negatively geared system since the creation of the centralized financial system and the first Us dollar in 1914.
Inflation increases the price of goods and services over time, effectively decreasing the number of goods and services you can buy with a dollar in the future as opposed to a dollar today. If wages remain the same but inflation causes the prices of goods and services to increase over time, it will take a larger percentage of your income to purchase the same good or service in the future.
End result, the purchasing power of $1 USD decreases as we print more. This means that the relative value of everyday goods and services increases. If you are wondering why your groceries, fuel, rates, and other living expenses just increased... Well, we can thank the federal reserve for that. The bonus for anyone holding assets like property (remembering 10% owns 95% of global wealth) is that their price increases. Simply speaking when it comes to basic needs, food, water, and shelter all become more expensive, yet the value of your working dollar decreases in value.
Doesn't sound fun right?
One would assume that in 100 years since 1914, we might be ready for a new system, with a new consciousness. We were smart in 1914, but in 2021, I feel like we have enough experience and awareness to agree that 85% of global wealth should not be owned and distributed to less than 15% of people. Especially when 90% live on less than $10 a day.
Insert a solution - Decentralised finances and why money is being re-imagined. We just have to choose which 'money game" and system we wish to play in. For me, anything that is positively geared, decentralized, self-governed and autonomous (takes out human greed). seems to be a good starting point.
12. US BUDGET DEFECIT - 2.8 Trillion
The U.S. budget deficit hit $2.8 trillion in 2021, the second-highest on record.
The federal budget deficit reached $2.8 trillion for 2021, the second-highest total on record but an improvement from the prior year as an economy starting to recover from the coronavirus pandemic bolstered tax revenue.
13. MILITARY SPENDING - 1.98 trillion
In 2020, military spending worldwide amounted to 1.98 trillion U.S. dollars, compared to 1.14 trillion U.S. dollars in 2001 (adjusted to 2019 prices). The United States accounted for 39 percent of total military spending globally and just recently the U.S. President Joe Biden signed into law the National Defense Authorization Act, or NDAA, for the fiscal year 2022, which authorizes $770 billion in defense spending, taking that number even higher.
SIDE NOTE. How much would it cost to end extreme poverty?
Today the world produces enough food for everyone on the planet. So why are more than a billion people still dying of hunger? Why is life itself tenuous for so many families while the eight richest people in the world have as much wealth as the poorest 50 percent of people in the world?
In 2018, extreme poverty mainly refers to an income below the international poverty line of $1.90 per day (in 2011 prices, equivalent to $2.19 in 2020), set by the World Bank. In October 2017, the World Bank updated the international poverty line, a global absolute minimum, to $1.90 a day.
Global extreme poverty is expected to rise in 2020 for the first time in over 20 years as the disruption of the COVID-19 pandemic compounds the forces of conflict and climate change, which were already slowing poverty reduction progress
The COVID-19 pandemic is estimated to push an additional 88 million to 115 million people into extreme poverty this year, with the total rising to as many as 150 million by 2021, depending on the severity of the economic contraction.
But poverty is more than just very low incomes. It is hunger, high mortality rates, conflicts, a lack of education or health services, and a lack of a future for hundreds of thousands of women, men, and children.
Broadly, poverty affects most of the people in the world. In 2005, 71 percent of the world’s population lived on an income below $10 a day. To eradicate poverty is possible, but at what cost?
In his book End of Poverty, Jeffrey Sachs, director of the Earth Institute at Columbia University, provides one answer to the question “how much does it cost to end poverty?”
So, how much would it cost to end extreme poverty?
Jeffrey Sachs, as one of the world’s leading experts on economic development and the fight against poverty, stated that...
the cost to end poverty is $175 billion per year for 20 years. This yearly amount is less than 1 percent of the combined income of the richest countries in the world, and only 25% of the United States’ 770 billion dollars total military budget.
It's not up to the USA, but Imagine if just one country decided to enable and empower 700 million people for just one decade, to support them out of extreme poverty into a humane space, where they could meet their basic human needs for survival.
At a cost that was only 25% of what they were already spending on defense. What if rather than having a mindset of defense we had a mindset of empowerment and humanity, thriving together as one.
Imagine if each of the 192 countries invested just 800 million each in solving a problem facing nearly 1 in 8 of our global citizens? Or even just 5-10 million from each of the 2600 billionaires?
The best bang for the buck would be to invest in women, children, education systems, and enable natural environments for everyone. For every dollar invested here, 80% would be paid forward into the local communities creating real change and sustainable development.
For example: Would you like a 31x return on investment?
Focusing on women farmers has promising impacts in production, food security and equality
According to communities in Ghana, Malawi, and Mali, the Pathways program generated $158 million worth of benefits in their lives. That’s $31 of benefit for every dollar the project spent working with them.
Ending poverty is possible and at a low cost. Now we just need ordinary citizens as well as multinational corporations to start meeting their responsibilities to help the poor and the left behind.
SUMMARY: Future predictions & solutions
- Centralized systems are built to rise and fall. At the expense of everyday people.
- Whilst rich, get richer and working-class works more for less. Whilst accruing more debt. Making it harder to meet the basic human needs from one generation to the next.
- We evolve and adapt from outdated centralized systems created in 1914, to decentralized systems in 2020 and beyond.
We decide. Together.
EGON VON GREYERZ shares that the $2.3 quadrillion above is what the world is exposed to when this time bomb explodes.
That is the total sum of global debt, derivatives, and unfunded liabilities. When all the dominos start falling, and no one can meet their obligations, this is what governments are left to finance.
Yes, they will print this money and much more as deficits mount exponentially due to collapsing currencies. But the MMT (Modern Monetary Theory) will then find out that printed money rightfully has ZERO value. As shown in the Time Money graph above and backed by the "faith' of a social agreement created by the centralized banking system. Which already results in 1% owning 99% of global money and assets. Facts, not assumptions. Do we just have to ask ourselves whether we are ok with this type of abundance distribution?
Where we stand today. Worlds in debt, most governments, corporations, and households are in debt. All whilst 500 billionaires are added to the top 1% and 150 million are pushed into extreme poverty on less than $2 a day.
I hope you can see what I'm getting at here. My intention is to show you where to look, but never tell you what to see.
Taking the data above and extrapolating it forward.
If we continue as we are going, $65 Trillion will be Created Over The Next Five Years, where the rich get richer.
Recent studies suggest that 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.
On a positive note, solutions.
I don't want to finish this piece on a negative. We already have a solution in plain sight. Decentralized financial systems.
One example is "China, who Created Its Own Digital Currency, a First for Major Economy". Which makes sense considering 92% of the money is already digital. We can only hope that future systems are built on a foundation of decentralized finances and balanced ledgers like blockchain. Whether that happens, well that's up to us. The only way to mitigate human greed is to emotionally remove us from the equation.
CALL TO ACTION
QUESTION: IS THERE A BETTER WAY?
Leave any comments, resources, or insights below to keep this conversation going and discuss if there is a better way to manage, balance, distribute and share resources so that we can all meet our basic human needs. What people do from there is up to their own abundance mindset. Hopefully, we build a future-focused on building longer tables, not just higher fences. But that's just me. What do you hope and wish for?
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