This is a lot of money....

Journal Ashtead's Journal: This is a lot of money.... 1

Journal by Ashtead on Saturday March 21, 2009 @03:56PM

Looking around in the news, there's this story about the US$ 683 trillion's worth of derivatives, that no-one's quite sure about who owns or who owes all this money. So the Fed steps in, and manages to do 300 billion here and 750 billion there, and thus there is now somewhere like US$ 682 trillion. Within a couple of significant figures anyways.

Take one down and pass it around, as it were.

Now, I'm already aware that there is financial troubles afoot, and I don't pretend to be the first or only one who's discovered another bit of scary-sounding news. The article referring to the money as "used toilet paper" does not exactly sound like praise either, it sounds more like they're all in the deep shite, is what it sounds like. Or perhaps it is on its way to a fan spinning merrily around somewhere ...

But 680-whatever trillions, how many zeros is that? Many, for sure, Uncle Scrooge of Disney-style numbers almost.

Except that he's a fiction, and these vast numbers are evidently appearing in Real Life. Arguably the actual money behind it is imaginary, but someone apparently has been pricing these derivatives, and here is the tag.

And it's real, US, dollars, and if you go and shop for the daily bread, you may have to pay 2 or so of them for it. It is not like the funny money such as zimbabwe dollars where you have inflation that makes you have to pay 2 million today and 3 million tomorrow, and 600 million next month. These things are like nano-bucks and shrinking, they are a different kind.

This is at a level way outta my, and possibly, everyone's league. Consider that the Fed put in 1050 giga-bucks and it just nudged the third digit. I know of no-one else who has any giga-bucks in numbers like that to throw around and even they made only a minor dent. First time I've seen giga-US bucks look like a pittance...

So how many zeros is this. Although prefixes like mega- and giga- are appropriate, they're just not big enough. We're approaching tera- and exa-buck scales here -- I can't remember having had to deal with such enormous numbers since calculating doping densities in semiconductors, back in college. And then we were talking about atoms and electrons within spaces of cubic centimeters -- obviously tiny things, so it would make sense that there would be many of them. One gets used to that. Dollars however, needed no such decimal notational tricks, there were never too many of them either debit or credit.

First, getting rid of these stupid "-illion" things, so that it is possible to see and speculate on the scale of it: 0.683*10^15, how does that sound? Then subtract the 10^12 which the Fed coughed up, and of course we're down to 0.682*10^15.

There's pi*10^7 seconds in a year. Spend a dollar a second, and this amount would have been counted after 2*10^7 years! Spend, or earn, a dollar per microsecond instead, or, spend or earn an entire megabuck per second, and you'll still have to keep it up at that rate for 20 years solid.

But spend it on what? Or if earning it, who'll be paying? Doesn't seem to be anyone else.... Is it the next stage in the progression that goes: If you owe the bank a million dollars it is your problem; if you owe the bank a billion dollars, it becomes the bank's problem; if you owe the bank a trillion dollars, it becomes the govenment's problem... but if you, or someone, anyone, owes 682 trillion dollars, is it then the world's problem?

It seems crazy and unreal. It is perhaps "funny money" after all. There's a bubble about to burst here it looks like... Then there will be a matter of figuring out what to do so that this kind of bubble is not allowed to be created again. Gold or silver standard, whatever.

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