How much money is there in the world?
What an interesting question, isn’t it?
It’s a difficult question to answer. Not because we can’t add up every dollar in peoples pockets, bank accounts, and investments.
But rather because it’s difficult to define what money actually is.
I think we’d all agree paper bills and coins count as money. But what about investments like stocks and bonds? What about real estate? What about other types of electronic money?
Well, a few experts have put together what their opinions are about how much money there is in the world.
Here they are:
According to Gizmodo,
[pullquote align=”normal”]For the narrowest definition, or what’s called “M0”, that includes only physical money, paper bills and metal coins that constitute currency. That figure is around 5 trillion dollars. The next step up is M1, which includes all the physical money, plus quickly accessed money like that in checking accounts, and comes in at $25 trillion. M2 includes M0 and M1, but also pulls in stuff like savings accounts and CDs under $100,000. That figure is around $60 trillion. And the last figure, the $75 trillion M3, is much more abstract and not often cited in official figures. It includes institutional money market funds, long term deposits, and other stuff rich people possess that can somehow be spent but confuses the rest of us. [/pullquote]
And according to Market Watch,
[pullquote align=”normal”]For purists, who believe money refers only to currencies such as bank notes, coins, and money deposited in savings or checking accounts, the total is somewhere around $80.9 trillion. But for those preferring a broader interpretation, including digital currency bitcoin, above-ground gold supply, and funds invested in various financial products like derivatives, the amount is in the quadrillions. This is what a quadrillion looks like written out: 1,000,000,000,000,000. Funds invested in derivatives alone total $1.2 quadrillion. In fact, there is more money in derivatives than in all the stock markets combined, which is a comparatively paltry $70 trillion. The U.S. accounts for roughly half of the global market cap thanks to companies like Apple Inc. AAPL, +0.31% Alphabet Inc. GOOGL, +0.08% and Microsoft Corp. MSFT, +1.63% Investment in commercial real estate, often the most visible symbol of wealth, pales in comparison to stocks or derivatives at $7.6 trillion. As for money owed by every single person and country in the world, the grand total is $199 trillion, with some 29% of it borrowed since the 2008 financial crisis. The U.S. is responsible for nearly one-third of that global debt, while Europe follows at 26% and Japan at 20%. China, for all the criticism about its debt-fueled economic growth, owes 6% of the total. And despite the attention bitcoin has received in recent years as an alternative currency, it clearly has a long way to go. The value of all bitcoin in circulation is estimated at $5 billion, a proverbial drop in the bucket. [/pullquote]
And according to How Stuff Works,
[pullquote align=”normal”]To make this question answerable in a finite amount of time, let’s simplify things and ask, “How much money is there in actual United States dollars?” Since the statistics for the U.S. are easy to come by, we can examine this question in a couple of different ways. The first way to look at it might be, “How much cash is there in U.S. currency?” If you took all the bills and coins floating around today in the world and added them all up, how much money would you have? All of that hard and easily liquidated currency is known as the M0 money supply. This includes the bills and coins in people’s pockets and mattresses, the money on hand in bank vaults and all of the deposits those banks have at reserve banks [source: Hamilton]. According to the Federal Reserve, there was $1.2 trillion in the M0 supply stream as of July 2013 [source: Federal Reserve Bank of New York]. That sounds like an incredible amount, but think about it this way: According to the CIA, there were 316,668,567 Americans alive that month [source: CIA]. If you took all the cash and divided it up equally, each person should have about $3,800 in cash on them (or stuffed under the mattress). Obviously, there’s some money missing, 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 [source: Federal Reserve]. [/pullquote]
Interesting, isn’t it?
If you were talking to your friends and the topic of how much money there is in the world came up, I don’t know if you want to get all deep into the conversation about it.
But you can easily say there are about 5 trillion dollars worth of currency (paper bills, coins) floating around in the entire world.