The World Of Money Is Where Currencies Are The Flags of Nations

In the world of money currencies are like the flag of a nation carrying the national identity into trade, diplomacy, bank accounts and the wallets of tourists and citizens all over the world.

All the money in the world consists of currencies that play an important role in connecting nations. Every currency in the world represents the economic and financial interests of a particular nation. And the currencies, themselves, often take on symbolic significance as well. In fact, many currencies are so iconic that they have come to be associated with entire regions. For example, the euro is commonly used to represent all of Europe, while the yen is often used to refer to all of Asia. Meanwhile, the dollar has become synonymous with North America and other countries that use it as their official currency. Overall, currencies are a powerful symbol of global interconnectedness. This connection far exceeds the different nations the currencies represent and the unique traditions they serve around the world.

Wiki Definition: A currency is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general definition is that a currency is a system of money in common use within a specific environment over time, especially for people in a nation state.

There are 180 currencies recognized as legal tender in UN General Assembly member, non-member, and observer states, and their dependencies. However, that excludes the pegged (fixed exchange rate) currencies. ?

·??????A number of nations use a single currency that is printed by the central bank of the country, while others have multiple currencies issued by both commercial banks and the government to support regional economies and trade practices.

·??????Additionally, countries often adopt a common currency that is used within an intergovernmental organization, such as the Eurozone or the African Union.

Which currencies are you currently holding? Do you know their value in US Dollars? Tip: Check the historic exchange rates and expected changes in value from one currency to another. You might benefit by waiting to exchange your currency to obtain a more favorable rate of exchange. We will cover forex in another “All the Money in the World” newsletter topic.

Money drives activity: Regardless of which currency system each country implements, it is clear that money remains a key driver of economic activity around the globe. And as long as new technologies continue to emerge at a rapid pace, there is no doubt that we can expect the number of currencies to continue growing well into the future.

All the money in the world: Out of the currencies representing all the money in the world, there are trillions of dollars held in disparate currencies. A few currencies, such as the U.S. dollar and the euro, are estimated to comprise more than half of the world's money supply. Asian currencies, including the Chinese yuan and Japanese yen, make up a significant portion of money in circulation. Of course, many currencies hold only a tiny fraction of total global money supply. Despite the wide variety of currency, it is estimated that less than 1% of all currency worldwide actually enters into the foreign exchange markets on a given day. Thus, though currencies appear to make up a huge portion of global capital, in reality they comprise only a small fraction of the all the money in the world in circulation.

The US Dollar goes a long way to encompass all the money in the world: Aside from a few countries, the value of the US Dollar is greater than most countries’ currencies combined. In fact, there are no African countries whose currency is greater in value (Zimbabwe uses the USD as its currency). Countries with stronger currencies include Kuwait, Oman, Jordan, Isle of Man, Great Britain, Eurozone countries, Switzerland, Liechtenstein, and the Cayman Islands. Some of the weaker currencies include Iran, Guinea, Paraguay, Belarus, and Armenia.

·??????For instance, it takes 30,165 Iranian rial to equal the value of 1 US Dollar!

Although currency strategists predict a weakening of the US Dollar, Americans traveling around the world now can stretch their dollar in many countries!

·??????In regard to the US dollar studies show that the Fed took advantage of emergency repo operations, injecting more than?$9 trillion?into the market since September 2019.

·??????Estimates are that 22% of the circulating US dollar was printed in 2020 alone.

All the money in the world is mostly held in US Dollars with their total value far exceeding that of the value of most other currencies combined in circulation. For example, it is estimated that there is over $14 trillion currently held in US dollars alone, while euro and yen currencies together add up to almost $6 trillion. So while there are many different currencies in use around the world, these three currencies are by far the most dominant, and make up a significant portion of all financial assets worldwide. With the Federal Reserve printing so much money the total dollars in circulation is difficult to track, to be sure.

There is more money in the world than ever before. The world is wealthier than ever; considering all the sources of wealth, from all the currencies, from all parts of the world. ?According to McKinsey’s report, global assets grew from $440 trillion (approximately 13 times GDP) in 2000 to $1,540 trillion in 2020, while net worth increased from $160 trillion to over $510 trillion. This figure includes real estate prices, equity market prices, exchange rates, natural resources, human resources, as well as capital and technological advancements that may create new assets or render others worthless in the coming years.

Regardless of which of the 180 currencies in the world that you use; we can definitely agree that all the money in the world is an interesting topic for discussion.

Let’s connect on LinkedIn, Mike Lancey, at https://www.dhirubhai.net/in/mikelancey/. Let’s hop on a call to chat. ?Drop your number and a convenient time into a LinkedIn message or email mlancey@mckenzichase.com . It gets a bit busy but I always have time for new friends!?