I read that a couple of ladies from a prominent family are worth more than $24 Billion each. Seems that it may not have been too long ago that $24B was more than all the currency in circulation in the U.S. (steaks were only 30 cents in the 30s as opposed to $8.99 per pound these days) and I was wondering if there is a date when that was more or less accurate. Is it possible that there is a date when this was true of the total world currency in circulation? Official currency, I guess, is what I’m looking for; I hope that cuts the choices down a tad.
If this is in the FAQ I tried to phrase it different ways and came up with bupkis.
Many thanks,
–Edflakes (Edflakes - They’re good and good for ya!)
Is it true? Of course. At time time there was no currency in circulation in what is now the United States or the world for that matter. I’m not sure exactly how you do the comparison across time and currencies though. If I told you there was 5 billion Pounds Sterling in circulation in 1776 (and I made that number up completely, what exchange rate would you use to compare that to the U.S. dollar? Perhaps the one prevailing in 1776. But then suppose I told you in 1 A.D. there were 1 million whatever the Roman currency was plus who knows what of other currencies in the world, how would you make that comparison since there obviously is no contemporary exchange rate to use?
Less than 10% of the world’s currency exists as physical cash, most is electronic money. A wealthy person worth billions will never exchange those billions for actual $100 bills, they will make large purchases using electronic transfers or checks where no physical money is exchanged. I am not sure what the stats are in the US, but 10% of our GDP would be about 1.4 trillion. The further you go back in history, the more of our economy exists as actual physical representations of money like bills and precious metals.
Taking inflation into account, anything is possible. For example, even at today’s valuation, every American is assured of being a millionaire. $10 an hour from age 16 to 65 is a million dollars, and any person who earns less than that in a lifetime is eligible for enough social benefits to pull up to a million in lifetime income upon which to live.
And to add on to Wesley Clark’s point, most billionaires don’t have a billion $ in even electronic cash deposits. Their wealth is tied up in the value of companies that they own, publicly traded or privately owned.