Visualising All the World’s Money & Market

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As humans we can become desensitised to extraordinary events when we get used to bad before it goes to worse.  Part of the process is not stopping and taking stock of what these incredible numbers that quantify ‘bad’ actually look like in context.  We often remind readers of the scale what a trillion is.  We can all count 1 second.  1 million seconds is 8 days.  1 billion seconds is 31.7 years.  1 trillion seconds is 31,709 years.  Remember it took a century from when the US Fed was established in 1913 to reach $1 trillion in bond assets (US Treasury bonds ‘bought’ with freshly printed currency).  Since the GFC they added $3.7 trillion and this year, yes, this year alone, they have added around $3 trillion to reach $7 trillion and still growing fast.  Additionally the US Government budget deficit this year is projected to hit $3.8 trillion, more than double the previous record of $1.41 trillion in 2009.

Visual Capitalist have a great way of showing such matters with succinct explanations.  Their latest is “All of the World’s Money and Markets in One Visualization”.  It does as the name suggests using individual squares worth $100 billion, or 3,171 years counting 1 Mississippi, 2 Mississippi… and so on.

The relevance of the info graphic below for gold and silver is clear.  When that mountain of money in these other paper assets flees to the safety of precious metals assets without counterparty risk, with real intrinsic value courtesy of constrained supply and 1000’s of years of monetary stability, that same “constrained supply” leaves one variable after demand and supply, and that is price.  As governments continue to rack up more and more debt injecting stimulus faster than it can create income returns, and central banks create more and more currency, more and more people flock to gold and silver as a hedge against what always follows.

Economists often talk of this in terms of Exter’s Pyramid and we presented it as such back in 2017 here.  But below is an update to the present date.  Think of it as an inverted Exter’s Pyramid…

NOTE – it is a long graphic.  If you want a clearer picture, click on it to take you to the original, higher resolution source.

Comparing the worlds money and markets