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Who has all the money?

I have money in my wallet and money in the bank. We all think that we know what money is and how to use it to buy goods and services. Do we really understand the world financial system? It does seem to have become very complicated. Governments around the world are complaining that they are not only broke, but trillions in debt. What’s going on?

Money is just the coins, paper and electronic tokens that we use to exchange goods and services. The United States produces goods and services totalling around 15 trillion dollars a year; but even the mighty USA had it’s AAA credit rating downgraded. Now the UK has suffered the same fate, despite having a GDP of around 2 1/2 trillion dollars. Both countries are in debt, the UK to the tune of over a trillion dollars. Who does everyone owe money to?

In the USA, the per capita GDP is around $48,000. That means the USA produces $48,000 of goods and services for every man woman and child. That includes the old, sick, disabled and others who are unable to work. It also includes people like movie stars and pop singers who appear to produce far more than $48,000 a year.

I wonder if all that money really exists or whether it’s a figment of some bankers imagination? After all, if you won the lottery, they would give you a cheque, a piece of paper from the bank. You don’t get a suitcase full of money and even then it would still be paper. What would you do with the cheque? You take it to the bank and convert it to numbers on a bank statement; another piece of paper. Even the paper is disappearing now and all the get is bits on a computer, viewable on a computer screen or smart phone. Governments around the world are seeing bits on a computer screen that tell them they owe trillions of dollars to unknown people.

We have very rich people in the world, oil sheiks, Bill Gates, Warren Buffet, Mark Zuckerberg, Richard Branson and others. They don’t keep their wealth in bank accounts, they own companies and investments. They don’t have the money…

Who has all the money? Does it really exist?

The government also issues government bonds, more pieces of paper; that it exchanges for money, also pieces of paper. The bonds are different, they attract interest; interest is money (pieces of paper) paid on larger amounts of money. Who has all those bonds? We know the Chinese government bought a lot and banks have bought a lot. The banks are all losing money and are virtually bankrupt. Does the Chinese government have all the money? Who is everyone in debt to?

I have considered the possibility that there is a huge bonfire somewhere in the world and someone is burning money, but electronic money doesn’t burn. Who has all the money? I thought money just went around and around. We spend it, the big companies pay wages and taxes. The government pays wages and benefits, it keeps going around and around. Maybe, some people are taking a bit too much. Maybe, it’s all going in bankers bonuses and they have bonfires burning the stuff?

Remember that adage? If you owe the bank a thousand pounds you have  a problem; if you owe the bank a million pounds, the bank has a problem. I think whoever the British government owes a trillion pounds to, might have a problem…

What do you think? Who has all the money? Please comment and share your thoughts…

3 Responses

  1. Pingback: » Saturday ideas and thoughts A Zillion Ideas…

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