Is Our Earth Rich?

Today is probably one of the craziest days in my life and I think I might have finally stumbled upon the most crazy question:

How Much Money Is There in the World?

We all want to know it, don’t we?

In an article by World Atlas, it is estimated that there is a hell lot of money on Earth:

• Physical coins and bank notes - $36.8 trillion
• Money in bank accounts - $53.6 trillion
• Investments - $544 trillon (high end estimates are up to $1.4 quadrillion)
• Real estate - $215 trillion
• Cryptocurrency (mosty bitcoin) - $160 billion

But honestly, here’s the thing. It may be a bit disheartening, but it doesn’t really mean anything. As we Odia’s say “Sansara ta moha maya” (“Sab moh maya hai”). Lemme explain why.

Years ago (probably centuries ago), money was just coins (silver, bronze, gold and all other kinds). Thus, there was a limited supply of it. Once you exhaust all the minerals, you can’t make any more coins or money. After sometime, we transformed into a different kind of money. Paper representations of gold and silver were used as money. Thus, the amount of money was still fixed but it was in the form of paper that represented the amount of precious metal in a treasury somewhere.

Later came the concept of “Fiat” money. A piece of paper without any intrinsic value that is declared by the government to be worth something. If you read the note below carefully, you can find: “I promise to pay the bearer the sum of 100 Rupees”.

It is nothing but a worthless promise by the government. This allows governments to print unlimited amounts of currency without any apparent implications. The value of the currency is decided upon magically by different governments and parties that agree to it (thus you can convert Dollars to Rupees and vice versa).

Today, the concept of money has had radical change. It is mostly based on a system of credit. Suppose you buy something in a supermarket and you pay for it using your credit card. The shopkeeper is satisfied with the slip he gets from the card company but you don’t really give him any physical money or fiat money. So where did the money come from to pay for your supplies?
The only answer is, it was created when the transaction occurred. There was no money circulating until the slip was generated. Now, the card company will charge you at the end of the month and you would transfer some amount of “money” in your bank account to the card company for the transaction. No gold coins or fiat money or currency notes ever exchanged hands but there was obviously money is circulation.

What it means for us you ask? It’s simple, the concept of money is no longer something fixed or tangible. It has become something abstract like a promise and it no longer matters how much the world has, we can always produce more!