How Much Money Exists In The World

So, I was at this coffee shop the other day, right? The barista, a friendly guy named Jake, was chatting away while making my cappuccino. He suddenly asks, "Did you know there's more money in the world than there are stars in the galaxy?" I nearly choked on my almond croissant. I mean, I've heard about money being everywhere, but this was a whole new level. That got me thinking, just how much money is out there?

Let's dive into the money galaxy

First things first, let's talk about the money we can actually see and touch. This is known as M1, or narrow money. It includes physical cash and coins, plus demand deposits like checking accounts. According to the International Monetary Fund (IMF), M1 stood at around $38.9 trillion in 2019. That's a lot of zeroes, folks!

But wait, there's more. We can't forget about M2, or broad money. This includes M1 plus less liquid assets like savings accounts and short-term time deposits. The IMF puts M2 at around $87.5 trillion in 2019. Now we're really cooking with gas!

But what about the money we can't see?

Now, you might be thinking, "Sure, that's a lot of money, but what about all those zeros and ones floating around in the digital world?" Well, my friend, you're not wrong. According to the Bank for International Settlements, global broad money supply (which includes both physical and digital money) reached $100 trillion in 2020. That's right, we've officially entered the trillions club!

But here's where things get a bit tricky. You see, the money we can't see is often tied up in investments, loans, and other financial instruments. So, while it's technically "out there," it's not exactly sitting in a big, global piggy bank waiting to be spent on avocado toast and lattes.

How much money is in the world? - Occam Investing

Now, about those stars...

Remember Jake's star comment? Well, according to NASA, there are roughly 100 billion to 200 billion stars in our Milky Way galaxy alone. So, in a way, Jake was right. There's more money in the world than there are stars in the galaxy. But let's not forget, we're talking about one galaxy here. There are estimated to be around 2 trillion galaxies in the observable universe. Suddenly, that $100 trillion doesn't seem so vast, does it?

But hey, who's counting? (Well, actually, a lot of people are counting. They're called economists, and they're a fascinating bunch.)

How Many Currencies Exist in the World? - WorldAtlas

So, what's the takeaway?

Money, it turns out, is everywhere. It's in our wallets, our bank accounts, our investments, and even in the digital clouds. It's a big, complex universe out there, folks, and money is just one of the many stars in its galaxy. So, the next time you're sipping your coffee, take a moment to appreciate the vast, mind-boggling world of money. And maybe, just maybe, you'll see the universe in a whole new light.

Until next time, keep exploring!