If you had a trillion dollars?

[I hope all you Europeans understand that in America one trillion = 1,000,000,000,000, not the number you're thinking of.]

The entire world economy is only $80T. That's the total value of all goods and services bought and sold during one year. (It is not civilization's net worth, which is probably somewhere between one and ten quadrillion dollars but I could be way off.) So if you start throwing around a trillion dollars, you're going to perturb the world economy.

If you decide to invest it, you'll have trouble finding enough opportunities. There aren't enough entrepreneurial individuals and companies to absorb such an enormous increase in capital. If you just call every broker in every country and tell them each to buy a billion dollars worth of stock for your account, all you'll do is drive the prices up. In other words you'll cause inflation and everybody else's money will be worth less.

Start a business? I wouldn't be surprised if that would be the biggest corporation on earth. It would be your life's work to just organize it, put together a business plan, hire all the accountants and lawyers and project managers and software developers and engineers and clerical staff and janitors, just to actually start operations. And oh BTW, there aren't that many unemployed geniuses, so you'll be hiring away some of the best talent from the existing companies, which will diminish their net worth and cause a hiccup in the economies of their countries.

If you decide to spend it on capital goods you'll soon discover what twelve zeroes really means. You can buy a bigger, nicer house than you've ever dreamed of, in the locale of your dreams, for a couple of hundred million dollars.

Art? Classic cars? They're not all for sale at any price, but it would take you a long time to track down enough of them to spend merely ten billion dollars.

Be a really nice guy who makes us all feel humble, and make it your mission to feed the poor? You can't just give them the money, there's no surplus food in those countries for them to buy. So where are you going to buy a trillion dollars worth of food? Buy up all the abandoned farms in America, and hire all the Mexican farm hands who are unemployed because of NAFTA to run them? (And use some of that money to put out a hit on Sheriff Arpaio so they can get from Sonora to Iowa safely? Just a little joke, folks.

Please Register or Log in to view the hidden image!

) See the above paragraph on starting the world's largest enterprise. Figure out how long it will be before you've got the food and the transportation to get it to Africa and the security team to keep it out of the hands of the local dictators who want to sell it and use the money to buy champagne and weapons.

So now what? Just go on a bender, invite everyone you know and everyone they know and everyone they know, rent the entire island of Molokai, and throw the world's biggest party? Again, you'll be competing for goods and services with the entire population of Hawaii, taking food out of their mouths and hiring away all their staff, causing a dip in the local economy and making all those happy Hawaiians pretty unhappy until you discover that even a ten-year orgy doesn't cost a mere hundred billion bucks.

Food for thought! Oh wait, there isn't any food. You fed it all to the sharks in your ten million-dollar private aquarium.

Please Register or Log in to view the hidden image!

My point is one that a lot of people who should know better don't know. Increasing the money supply does not magically increase the amount of goods and services that are available to spend it on. If you win ten million bucks in the lottery, well sure: there are plenty of mansions for sale, every Bentley dealer has a couple of cars on his lot, there are some really talented people looking for jobs and some really great artists with an inventory of unsold paintings. Or... you could start a ten-million dollar business and boost the local economy if you do it right. There are enough unemployed workers and enough inventory of machinery and office supplies. Or... it wouldn't be at all difficult to throw a million-dollar party without having to wait for the caterer to come up with a date he's free, although you'd have to hire a party planner to do it well.

But multiply that by one hundred thousand to turn it into a trillion dollars? There isn't that much slack in the economy.

And you thought being rich would be easy. There's a reason all those fat cats have ulcers!

 

The entire human race's annual budget is $80 trillion. That's all national, regional and municipal governments; all corporations, churches, charities and organizations; all families, individuals, small businesses, communes and subsistence farms.

The only things it doesn't include are probably criminal enterprises, terrorist organizations, etc. I doubt that those come close to one trillion in aggregate. Even the Taliban takes in only a few billion per year in heroin sales.

So one trillion dollars is a sizeable fraction of the world economy. If you start throwing that much money around, you're going to screw something up pretty badly. Especially since you don't have Warren Buffett's international network so you're probably going to be spending it all in one country.