Comment

Comment on how much money is there in total?

CapuccinoCoretto@lemmy.world ⁨21⁩ ⁨hours⁩ ago

In fractional reserve banking, money and debt are not a one to one ratio as your post suggested. It’s often a 9 to one or more. Many countries don’t even have reserve requirements. After 2008, one big change was creating contingent capital to hold banks accountable. That is, in the event of losses they can’t pay back due tonexcessive risk taking, they pull from bank stock and convert to funds to repay debts before governments bail them out.

en.wikipedia.org/wiki/Fractional-reserve_banking

As to how much money in the world?

Not sure if anyone has a good grip on that as each country has their own systems, what counts as money, etc…

en.wikipedia.org/wiki/Money_supply

It’s probably easier and somewhat accurate to say there is infinite money. We just make as much as we need, on demand.

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RoidingOldMan@lemmy.world ⁨20⁩ ⁨hours⁩ ago

Nobody manages money supply vs inflation

It’s managed via interest rates, which to a degree are controlled by the world bank.

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- CapuccinoCoretto@lemmy.world ⁨20⁩ ⁨hours⁩ ago
  It’s like you read and restated what I said. ;)
  
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  - RoidingOldMan@lemmy.world ⁨20⁩ ⁨hours⁩ ago
    I may have beaten you to it by like 1 minute.
    
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gandalf_der_12te@feddit.org ⁨20⁩ ⁨hours⁩ ago
yeah i’m actually asking not so much with inflation in mind, more out of general interest into how things work. i’m just trying to understand the distribution of money and wealth throughout the world, for which it would help to understand the total sum of all money, and of all wealth (which is not the same!) in the first place.

money and wealth is not the same btw. by money i mean money issued by the central bank (i.e. USD) while wealth is the sum of all assets, which can include ownership of land and real estate, for example.

i suspect that the total amount of money in the world is close to zero, because what the central bank gives out in loans, becomes liabilities to the loan holder to pay back, so the sum of money + liability is zero. since you (at least formally) have to pay back what you took out as loan. meanwhile the amount of total wealth in the world is larger than zero, because the amount of total real estate in the world is larger than zero. so these two terms are not the same at all.

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- CapuccinoCoretto@lemmy.world ⁨19⁩ ⁨hours⁩ ago
  
  sum of money + liability is zero
  
  Not everywhere practices the same forms of loaning money into existance, plus quantitative easing/tightening.
  
  Do you consider gold money?
  
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  - gandalf_der_12te@feddit.org ⁨19⁩ ⁨hours⁩ ago
    
    Do you consider gold money?
    
    no, i mean in today’s money system.
    
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    LwL@lemmy.world ⁨4⁩ ⁨hours⁩ ago
    Money is fundamentally made up. It’s whatever the other party is willing to accept as a token that they trust will in turn be accepted by someone else they want a service or item from. Fiat currency just has its backing from being used in transactions with the state.
    
    It also follows that the total value of global money is entirely dependent on people’s trust in it. The nominal value of global money supply, whether it is 1 quintillion USD or 100 trillion USD, doesn’t directly affect the worth I, or anyone else, ascribe to having 1 USD myself. It’s the things that I perceive myself to be able to trade that 1 USD for that do.
    
    What I’m trying to say is that the philosophical idea you’re looking for might be more along the lines of “how much of their own resources (time and belongings) is the combined global populace willing to trade for a promise of trading it for someone else’s resources in the future”.
    
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    CapuccinoCoretto@lemmy.world ⁨19⁩ ⁨hours⁩ ago
    It is considered by many to be harder currency than currency, even today.
    
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