Infographic (Summary): Comparing the World’s Money and Markets
8 February 2016
By Rana Abdel Fattah
We recently came across a great infographic, titled “All of the World’s Money and Markets in One Visualization,” which compares the world’s money and markets in one visualization. The idea behind the graphic is to try and identify the world’s total money supply, while keeping in mind that the amount of money that exists in the world depends on how it’s defined. The infographic displays some interesting comparisons, including the wealth of the richest people, the market capitalizations of the largest publicly-traded companies, the value of all stock markets, and the total of all global debt.
It’s a fascinating look at how our current financial markets are structured and the flow of those markets. We strongly suggest checking out the whole infographic just to see the staggering comparisons you might not have expected.
The World’s Smallest and Largest Markets
An interesting comparison is made between the world’s smallest markets, which are identified as Bitcoin and Silver, and the world’s largest markets – derivatives, which are valued somewhere in the range of $630 trillion to $1.2 quadrillion. In addition, the infographic notes that, between those criteria, is the total of the world’s money. This includes the global supply of all coinage and banknotes ($5 trillion); the above-ground gold supply ($7.8 trillion); the narrow money supply ($28.6 trillion); and the broad money supply ($80.9 trillion).
Derivatives make up the most value at the bottom of the chart, and, according to Warren Buffett, who is quoted in the infographic, “The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”
For us at Q4, this last point is most interesting. Our Q4 Intelligence team have been strong proponents of greater IRO clarity into the derivatives market for some time. With the visible representation in this chart, it’s undeniable how large and influential this market has become in the global economy.