
All of the World’s Money and Markets in One Visualization - hippich
https://www.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization-2020/
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chvid
Completely silly to put in the notional value of the derivatives market in
there as most derivatives are designed and issued in a way such as the real
value is none or cancelled out.

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ggrrhh_ta
Can you elaborate on that? (Genuinely curious)

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quickthrowman
For stock options, a vertical spread is a combination of buying and selling a
put or a call.

I could buy an AMZN call expiring next Friday with a notional value of
$300,000 (100 shares at 3000 strike) for $6,250. I could simultaneously sell
an AMZN call with a notional value of $300,500 (100 shares at $3005) for
$5,855. My net debit would be $395 with a max profit of $105 if AMZN closes
above $3005 a share at expiration.

In the above I bought a call from someone with a notional value of $300,000
and someone else bought a call from me with a $300,500 notional value. I paid
$395 for this setup that has a notional value of $600,500, but the most I
could ever get back is $500, the spread between the strike prices.

~~~
ggrrhh_ta
Many thanks, I think I can now understand the initial comment; in the
derivatives market, the underlying value is decoupled from the actual money
value of the transaction, and the latter is negligible with respect to the
notional value.

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vmception
When you apply this same standard to bitcoin and other cryptocurrencies, it
becomes clear that it doesn't matter that only a few percentage of it is used
in transactions because that's just the m0 supply, m1 for larger transfers,
and m2 for large investments when desired. So it doesn't make sense for that
to be an argument against cryptoassets as a money surrogate, when it actually
is acting like all other currencies in that regard.

That doesn't mean there aren't stronger arguments, its just that people
gravitate towards weak arguments.

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zestyping
To put all this wealth in perspective, consider how little of it would be
needed to radically improve society and reduce human suffering.

[https://mkorostoff.github.io/1-pixel-
wealth/](https://mkorostoff.github.io/1-pixel-wealth/)

~~~
logicchains
Just giving money doesn't necessarily help; see for instance the failure of
foreign aid to Africa: [https://www.lejournalinternational.fr/Foreign-aid-is-
hurting...](https://www.lejournalinternational.fr/Foreign-aid-is-hurting-not-
helping-Sub-Saharan-Africa_a2085.html). Supporting development requires
creating the institutions and providing the education to support participation
in the modern economy, as Asia has done over the past half century, lifting
hundreds of millions of people out of poverty into first-world living
conditions. Free money can actually be detrimental to this: for instance the
[https://en.wikipedia.org/wiki/Resource_curse](https://en.wikipedia.org/wiki/Resource_curse)
, where countries with easy income from significant natural resource wealth
actually experience worse development outcomes.

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RobertoG
"[..] countries with easy income from significant natural resource wealth
actually experience worse development outcomes."

They develop worse outcomes because all the profit goes to a few extractive
elites in the country and in foreign powers.

Foreign aid has, I think, a very efficient path to try: just give
unconditional money, not strings attached, to the poorest people of the
country. You are helping the people that more need it, they know exactly what
they need, and they will expend the money in the local economy. See for
instance
[https://en.wikipedia.org/wiki/GiveDirectly](https://en.wikipedia.org/wiki/GiveDirectly)

~~~
wonderlg
I think that’s akin to (pardon my analogy) feeding wild animals: Do it long
enough and they become _more_ dependent on you.

I think money is better spent on education and infrastructure, so that value
can be created by them eventually, not passed to them indefinitely.

Another way to put it: What if your parents raised you exclusively by feeding
you and giving you shelter? What happens when they die if you can’t feed
yourself?

~~~
RobertoG
"I think money is better spent on education and infrastructure, [..]"

The problem that we are discussing here is, precisely, how to give education
and infrastructure efficiently to people that live in some of the poorest
places of earth.

As an example: Givedirectly[1] have a program that give direct transfer cash
to the poorest people in Kenya, Uganda and Rwanda. They make research about
how effective this is and you get some reports back about what people do with
the money.

Do you know in what they spend the money? education and infrastructure.

The common themes are: paying the school bills so their children can keep
going to school, a cow or seeds so they can start a small business, and (the
one I never could predict from my urban European perspective) a metallic roof
so water don't come into their house when it rains.

Even if some people could misuse the chance, and that's unavoidable, humans
being so diverse, the important thing is the efficiency of the program in its
totality.

This theory that poor people just would stay at home drinking the money can be
tested. In most cases, the theory has been falsified.

[1] - [https://www.givedirectly.org/research-on-cash-
transfers/](https://www.givedirectly.org/research-on-cash-transfers/)

~~~
wonderlg
Roofs aren’t infrastructure. Giving money to private schools just helps them
raise the price.

We should sponsor public K12 education so that parents never have to “afford”
sending kids to school and can work instead of having to care for their
children. Then they can spend that money on fixing roofs and buying food.

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westurner
> _Derivatives top the list, estimated at $1 quadrillion or more in notional
> value according to a variety of unofficial sources._

1 Quadrillion: 1,000,000,000,000,000 (10^15)

Derivative (finance)
[https://en.wikipedia.org/wiki/Derivative_(finance)](https://en.wikipedia.org/wiki/Derivative_\(finance\))

Derivatives market
[https://en.wikipedia.org/wiki/Derivatives_market](https://en.wikipedia.org/wiki/Derivatives_market)
:

> _The market can be divided into two, that for exchange-traded derivatives
> and that for over-the-counter derivatives._

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elil17
This chart compares wealth and market cap in a way that makes literally no
sense. This doesn’t represent the size of the money supply at all. A ton of
things are double counted.

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fractal618
Agreed. 100%. These visualizations are pretty, but worthless. XKCD did a much,
much better job when he created [https://xkcd.com/980/](https://xkcd.com/980/)
in 2011

~~~
elil17
Actually I think that chart also confuses cash flow and wealth

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dtolnay
Under the Global Wealth heading, in the sidebar it shows a Chinese flag and
next to it says "Wealth: $63.8 trillion; Number of Millionaires: 4,447 (in USD
terms)". What is that second number? Surely there are more than 4,447 people
in China with wealth greater than 1 million USD.

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csa
I think they are missing three zeros... closer to 4.4m millionaires, iirc.

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onion2k
Why are below ground gold reserves counted as money and not below ground oil
or diamonds or copper or some other thing we know about?

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acd
I remember the large size of derivative related to the normal economy from
this visualization. If we ever get a derivative bubble in the future, we will
probably need to rebuild the economy from the ground up. Why? Because the
derivative market is so large in comparison to the normal economy.

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nl
This comment (and to be fair the visualisation itself) completely
misunderstands what derivatives are.

The vast majority expire and never have any value.

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thephyber
To be fair, the visualization mixes store values (eg. Fed's balance sheet) and
flow values (annual military spending, annual USA deficit).

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nl
This is true too. But at least that's sort of like personal savings and cash
flow.

Derivatives aren't anything like that.

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peter_d_sherman
>"Derivatives: Notional Value: 558.8 trillion (Low end estimate)"

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enjoyyourlife
[https://xkcd.com/980/](https://xkcd.com/980/)

~~~
_ZeD_
yep. while outdated it's a better visualization

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justinzollars
Thats pretty cool, but I question a few of the figures.

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okaleniuk
Aircraft carriers are too damn expensive. We should probably build more of
them to spread the R&D part.

