I’d like to know how much money there is in the world. Does anybody keep records as to how much money the world has?
Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics, said one part of the answer can be found in information published by the U.S. “It’s a number called M0, which is basically the number of notes and coins that are in circulation,” the Federal Reserve stated. According to the Federal Reserve’s website, that figure for the United States is around $1.5 trillion. Kirkegaard said that a comparable tally of currency in circulation from all over the world, tracked by the Bank for International Settlements, totals about $5 trillion.
But using a more inclusive definition of money, “that amount goes much, much higher,” explained Jeff Desjardins at the financial media website Visual Capitalist, which has published an infographic on the topic.
According to Desjardins, the total amount of easily accessible money in the global economy increases by several multiples. “Add in checking accounts, savings accounts, and money-market accounts — not quite physical money, but you can make a bank transaction digitally and use that as money.” The CIA World Factbook estimates that the global total of this so-called broad money is more than $80 trillion. Most of the broad money in the world economy isn’t actually cash held in bank vaults, explained Karen Petrou, managing partner at Federal Financial Analytics. It consists of bank balances on digital ledgers, which represent money that has been deposited in banks and lent again by banks. “Banks always have your money out working in the economy,” said Petrou. A “classic banking run” would occur “if everybody lined up and suddenly went to the bank to get cash.” Petrou said the U.S. dollar is the most popular currency in use worldwide — for countries’ central-bank reserves, wealthy people’s cash holdings, and criminal enterprises.
Because of the stability of the United States, “it’s the most liquid currency,” said Petrou. One of this nation’s most valuable assets, “it’s a global store of value and safety.”