A trillion here, a trillion there

If you have tried to create any new business with a financial organisation recently you will know that it is now extraordinarily difficult.

You need your first cousin, twice removed’s blood type, the day of the week that your cat was born on, the results from your first spelling test in primary school and all manner of other stuff to ‘prove’ you are who you say you are. Once that is established to their satisfaction you need to be able to prove where you got the dosh from in the first place.

It is all part of K.Y.C. and A.M.L procedures that all banks and financial institutions, lawyers and real estate agents are getting lumbered with.

Know Your Customer (K.Y.C.) and Anti Money Laundering (A.M.L.) is being forced upon us for the usual reason; terrorism.? But it is really just another branch of state control and the move towards the cashless society so that everything we buy and sell can be tracked more easily.

Obviously, this money laundering stuff must be pretty big beans if governments all around the world are throwing this much effort into ensuring that it does not happen, right?? There must be hugely significant sums of ‘black economy’, under-the-table cash floating around that need to be mopped up.

Now, I am a bit of a sucker for well presented informative infographics and this one from Information is Beautiful caught my eye.? Probably spurred on by Apple becoming the first trillion dollar company a couple of months ago, the boffins at Informationisbeautiful.net looked at various metrics measured in $USD Trillions.

You need to zoom in on the top corner to see what triggered this post.

One of the smaller boxes is the money laundered globally, $1.6Tn, 50% more than that is spent in the global fashion industry and for that we are all put through the wringer when trying to do business.

Next item of interest is $USD16.5 Tn to meet the Paris Accord Climate costs.? For this, we may possibly get a reduction of two-tenths of a degree Celsius in global temperatures.? An absolute bargain!

Clearly, this is affordable as there is $21 Tn sitting in the central banks all around the world. Blow it all on saving two-tenths of a degree!

Or the governments could confiscate the $26.5 Tn hidden in offshore accounts and use that to save the world.? All those evil money-launderers who have stashed the 26.5 Tn weren’t doing anything with it anyway, so why not blow it all on a Quixotic attempt at climate control?

James will be overjoyed to note that only $4.7 Tn is required to deploy low-carbon tech worldwide. New Zealand will lead the way as usual.

You need to click on the link for the full infographic but the really big numbers are still to come. Clearly, the amounts in each box are not exclusive, some of China’s GDP will be included in the global fashion industry, for example, as they make the fancy sneakers that kids wear. The US debt is also counted in the total global debt and so on.

However, even allowing for some double counting, look at the big box, bottom right.

$USD127 Tn is owned by the 1%.? Obviously, some will have shares in Apple, some will be hidden in offshore accounts etc so you cannot sum all the boxes and arrive at a meaningful conclusion but the combined wealth of the 1% is utterly staggering when put in this context.

The 1% could wipe out the entire global debt and still have more money than they could possibly use.

What you may not realise is that many in New Zealand qualify to be in the 1% on a world ranking.? According to this calculator,?a net worth of $NZ 1,210,000 is the entry point for the 1% group. Given current Auckland house prices, that is not an unobtainable target.? A reasonable mortgage free house, a nice car or two, some furniture and home appliances, a little bit saved and many in the developed nations qualify for 1% membership.

How much is a trillion dollars anyway? It is pretty hard to visualise the size of these numbers.

Let’s suppose that Joseph and Sons Ltd, Carpenters of Nazareth, were not overly successful in business and they managed to lose $1 million a day?(or whatever that is in denarii) but, miraculously, the coffers kept getting topped up and the business kept on losing $1 million per day. In spite of losses that even Fletcher would be envious of, the carpentry company stayed in business until the present time, always losing $1 million per day.

As of today they still would not have racked up $1 trillion in losses!? Joseph & Sons Inc would only be down the gurgler for about 3/4 of a trillion dollars so far.

Disclosure: The writer does not own shares in Apple, has no funds hidden in offshore accounts and has all laundering done in a front-loader.??