Politics Magazine

The World’s Money and Markets in One Visualization

Posted on the 23 December 2015 by Adask

Another view of derivatives [courtesy Google Images]

Another view of derivatives
[courtesy Google Images]

The Money Project

“How much ‘money’ exists in the world? . . . [T]here are multiple answers to this question, and the amount of money that exists changes depending on how we define it. The more abstract definition of money we use, the higher the number is.

“In the following  data visualization of the world’s total money supply, we wanted to not only compare the different definitions of money, but to also show powerful context for this information. That’s why we’ve also added in recognizable benchmarks such as the wealth of the richest people in the world, the market capitalizations of the largest publicly-traded companies, the value of all stock markets, and the total of all global debt.

“The end result is a hierarchy of information that ranges from some of the smallest markets (Bitcoin = $5 billion, Silver above-ground stock = $14 billion) to the world’s largest markets (Derivatives on a notional contract basis = somewhere in the range of $630 trillion to $1.2 quadrillion).

“In between those benchmarks is the total of the world’s money, depending on how it is defined. This includes the global supply of all coinage and banknotes ($5 trillion), the above-ground gold supply ($7.8 trillion), the narrow money supply ($28.6 trillion), and the broad money supply ($80.9 trillion).”

You can see that derivatives dwarf all other forms of money.  Are derivatives extraordinarily dangerous because of their enormous magnitude?  Or, could it be that the sheer “mass” of derivatives is so enormous that that “mass” provides some sort of “ballast” and stability in an otherwise volatile monetary environment?  Does that “ballast” threaten to sink the monetary “ship”?  Or will that “ballast” help protect that “ship” from minor craziness taking place in silver, gold and stock markets?

Whatever the answer, it’s clear from the following illustration that we live in a time that is unlike anything else every before seen in world history.   The modern concept of derivatives may be roughly 20 years old, and yet the sum of those derivatives is over ten times greater than sum of all of the other forms of “money,” combined.

How could that have happened?

If you take time to consider the following illustration, you might find yourself beginning to gape.

The World’s Money and Markets in One Visualization
Courtesy of: The Money Project

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