Debt and Money

In a previous post the amount of 50 trillion dollars was discussed as the total of all debt money of the USA.  Money is founded in debt, represents debt, it equals debt at the core.  All our circulating money supply was created initially as debt when banks make loans and maintained at a certain level as old loans are paid off (money is extinguished from the system) and new loans made (money is created out of nothing and put into the circulating money supply).

How much debt money is there in the entire world?

That question is answered at this link.

Global public debt is 158 trillion dollars.  Total public debt is 41 trillion dollars and private debt is 117 trillion dollars.

But wait..........

This Federal Reserve link says that all the US Dollars in the world (M2) total 9.6 Trillion dollars in Dec. 2011.  Most all of this is (of course) held by commercial banks and thrift institutions.  Actual cash paper dollars are around 6%, half of that is not even circulating in the USA.  So, we can, for all intents and purposes simply forget about all the greenback dollars as far as gross analysis of money supply goes!  It is relatively small change.

Because of fractional reserve lending, Banks can lend about 9 dollars for every dollar they hold on some kind of deposit.  But total private debt in the USA is about 35 trillion dollars.

Something does not jive here and I keep coming back to the discrepancy.  No, I do not understand the numbers nor the system that produces them.  Logically, reasonably it should not be that hard to reconcile the differences and explain them.

I will keep working at it!

How much money is in the USA?  How much Money is in the world?

How much debt in the USA.  How much in the world?

Debt seems to be the more factual number:  50 Trillion debt in the USA,  158 Trillion debt in the world.

A cross check on money levels is GDP.  The value of all  goods and services produced in the USA each year.  Annual GDP is 15 trillion dollars.  What is produced each year is equal to what is paid to all of those that produce it in order for the producers to spend what they are paid to consume what is produced.  What is produced each year is consumed each year.  Total annual spending for all things purchased per year is spent on current year production plus investment in prior years durable goods which still have value beyond the current year. 

Like houses.

However the money to purchase houses is primarily a loan beyond some small amount of down payment.  No down payment recently.

So there must be some consideration of how much that is spent annually finds its source in a loan rather than earned income?  If new loans are made as old loans are paid off then the difference is a wash over time except for the change, increase or decrease in total lending?

The average American's debt is a multiple of what they have in the bank.  We know what is in the bank:  9.6 trillion.  Total mortgage debt in the USA is 10.2 Trillion dollars.  The total of all personal debt is 13.5 trillion in 2010.  The latest numbers here state "Debt Outstanding Domestic Nonfinancial Sectors - Total Business Sector (TBSDODNS)"to be 11.5 trillion dollars.  If total private debt is 35 trillion dollars then the business portion of private debt must be around 21.5 trillion dollars.  This does not figure!!!

Everywhere I go I get numbers and relationships that simply do not add up.  These are simple things like how much total money is there?  How much total debt?

Does all money actually equal all debt if money is debt?  Is that really the truth of debt money.  That all money is only created loans are made and debt incurred.  All loaned money is spent into the economy?  Where else can it go?  Nobody takes out a loan and pays interest to do nothing (not spend it).  Do they?


I need to revisit this.  I wish there was a website that gave the numbers for all these fundamental monetary categories.