Speaker 1: Welcome to brain Stuff, a production of I Heart Radio.
Speaker 1: Hey brain Stuff. Lauren Vogelbaum here with today's question, how
Speaker 1: much money is there in the world. To make this
Speaker 1: question answerable, let's start by asking how much money is
Speaker 1: there in actual United States dollars in the world. Because
Speaker 1: the statistics for the United States are relatively easy to
Speaker 1: come by, we can examine this question in a couple
Speaker 1: different ways. The first way to look at it is
Speaker 1: how much cash is there in US currency? If you
Speaker 1: took all the bills and coins floating around today in
Speaker 1: the world and added them all up, how much money
Speaker 1: would you have. All that hard and easily liquidated currency
Speaker 1: is known as the M zero money supply or monetary base,
Speaker 1: and this includes the bills and coins and people's pockets
Speaker 1: and mattresses, the money on hand in bank vaults, and
Speaker 1: all the deposits those banks have at reserve banks. According
Speaker 1: to the Federal Reserve, there was five point eight trillion
Speaker 1: dollars in the M zero supply stream as of March
Speaker 1: of twenty twenty one. That sounds like an incredible amount,
Speaker 1: but think about it this way. According to the U
Speaker 1: S Census, there were three hundred thirty two million two
Speaker 1: hundred ninety thousand, nine hundred and sixty four people alive
Speaker 1: in the United States as of May twenty twenty one,
Speaker 1: So if you took all the cash and divided it
Speaker 1: up equally, each person would only have about seventeen thousand,
Speaker 1: four hundred and fifty four dollars in cash on them,
Speaker 1: which is nothing to sneeze at. But obviously there's some
Speaker 1: money missing, but there's an easy explanation for that. The
Speaker 1: Federal Reserve says that at any given time, between one
Speaker 1: half and two thirds of the M zero money stock
Speaker 1: of US dollars is held overseas. The rest of the
Speaker 1: money is in bank accounts of various types, and the
Speaker 1: Federal Reserve has tracked these funds in three different values,
Speaker 1: known as the M one, M two, and M money supplies.
Speaker 1: M three has since been dropped, but more on that
Speaker 1: in a second. M one represents all the currency outside
Speaker 1: the US Treasury, Federal Reserve banks, and the vaults of
Speaker 1: depository institutions. It also includes demand deposits at commercial banks
Speaker 1: excluding a few specific types, the Federal Reserve float, and
Speaker 1: other liquid deposits. As of March one, the M one
Speaker 1: money supply for US dollars equaled another eighteen point seven
Speaker 1: trillion dollars, or so M two is the M one
Speaker 1: money supply plus small denomination time deposits that is less
Speaker 1: than a hundred thousand dollars. Again, as of marche the
Speaker 1: M two money supply was about nineteen point nine trillion dollars.
Speaker 1: M three is M two plus larger certificates of deposits.
Speaker 1: As of March two thousand six, though, the FED stopped
Speaker 1: tracking the M three money stock as an economic indicator
Speaker 1: because it felt it didn't add any information on economic
Speaker 1: activity that wasn't already available from the M two. So
Speaker 1: all told, anyone looking for all of the United States
Speaker 1: dollars in the world as of could expect to find
Speaker 1: approximately nineteen point nine trillion in existence using that M
Speaker 1: to money supply definition. If you just want to count
Speaker 1: the value of notes and coins, there are about two
Speaker 1: point one trillion dollars worth of those floating around the globe.
Speaker 1: But suppose you wanted to know the actual number of
Speaker 1: notes in circulation rather than how much they were worth.
Speaker 1: At the end of the FED estimated that there were
Speaker 1: fifty point three billion notes, ranging from humble one dollar
Speaker 1: bills to mighty ten thousand dollar bills in circulation. This
Speaker 1: information is updated annually. So now that we've figured out
Speaker 1: the U S money supply as much as we can, oh,
Speaker 1: what about the rest of the world That gets a
Speaker 1: little trickier due to the sheer number of currencies there
Speaker 1: are around the world, Even accounting for unified currencies like
Speaker 1: the European euro and the African Eco, each of which
Speaker 1: is accepted in several nations throughout those continents, the problem
Speaker 1: is exacerbated when a federal government tries to mint its
Speaker 1: way out of trouble. Take, for example, the Zimbabwean dollar,
Speaker 1: which saw such dramatic hyperinflation in the twenty odds as
Speaker 1: the government tried to support public project spending by printing
Speaker 1: surplus notes that its inflation rate hit five hundred and
Speaker 1: sixteen quintillion percent in two thousand eight, and it's a
Speaker 1: hundred trillion dollar note was worth just forty cents US.
Speaker 1: The government abandoned that version of its currency entirely after that,
Speaker 1: and it never collected the bills or let people exchange them,
Speaker 1: So no one knows the final tally in circulation. But
Speaker 1: even outside of extreme circumstances like that, anyone trying to
Speaker 1: answer this question in earnest has their work cut out
Speaker 1: for them, but yes, people do try. Perhaps the closest
Speaker 1: estimate to how much money exists in the world was
Speaker 1: released by def de Jardins, the editor in chief of
Speaker 1: Visual Capitalists in and updated in. De Jardins added up
Speaker 1: all of the world's silver, gold, top stock, exchanges, cryptocurrencies,
Speaker 1: and much much more and came out with the amount
Speaker 1: of about two point seven quadrillion dollars. That's a lot
Speaker 1: of mula. He also estimated the value of all the
Speaker 1: coins and banknotes at the world at just six point
Speaker 1: six trillion. Today's episode is based on the article how
Speaker 1: much actual money is there in the World on how
Speaker 1: stuff Works dot com written by Katherine Whitforn and Francisco Gusman.
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