Central Banks

$20 Trillion of U.S. Debt Visualized Using Stacks of $100 Bills

Published

2 years ago

June 1, 2017

For most people, our experiences in everyday life are with using lower numbers like one, two, or ten. We not only comprehend what it means to buy five apples, but we can also visualize exactly what that might look like. In other words, these are numbers that fall within a range that is very intuitive for most humans.

Extrapolate that a little higher and we can still comprehend the numbers, but we start to lose that intuition.

Are there 1,500 or 2,000 people at a music venue? It’s hard to know for sure, but we do at least have a basic comprehension of the sizes of those numbers. Every day, we do math with numbers in the thousands – a paycheck, a credit card bill, or paying rent.

Millions, billions, trillions

This is where things start to get dodgy. Once numbers get beyond the millions, we don’t really have any intuition, tactile familiarity, or comprehension of what they mean.

For example:

One million seconds = 12 days
One billion seconds = 32 years
One trillion seconds = 32,000 years

Going back in time a trillion seconds would place you well before written history, the building of the pyramids, and 10,000 years before the first cave wall paintings in France.

Our monkey brains don’t really know what to do with these giant abstractions, and so it helps to think about them in different ways, especially visually.

The Visual Interpretation

Looking at visual representations of these numbers will help to put them in perspective.

Below is a series of fantastic 3d graphics produced by Demonocracy.info that help to do this for the $20 trillion in U.S. Federal Government debt. It starts with a $100 bill, and goes from there. Enjoy!

1. Here is a single $100 bill.

A single $100 bill

2. Here is $10,000, or 100 of those same bills in a stack.

$10,000 or 100 of those bills

3. $1 million, or equal to 92 years of work for the average human on Earth.

$1 million visualized in $100 bills

4. $100 million on a pallet. The couch is worth a cool $46.7 million, too.

$100 million visualized in $100 bills

5. $1 Billion – getting bigger…

$1 billion visualized in $100 bills

6. $1 trillion, looking at it from a front angle.

$1 trillion visualized in $100 bills

7. Here’s a better view of the $1 trillion with the White House.

$1 trillion visualized in $100 bills

8. Finally, here’s $20+ trillion of U.S. government debt.

$20 trillion in U.S. government debt

For more on putting the U.S. debt in perspective, here’s a video showing Trump’s $20 trillion problem, as well as visualizing the debt from a more 2d perspective.

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Central Banks

The Silver Series: The Start of A New Gold-Silver Cycle (Part 1 of 3)

As the decade-long bull run shows signs of slowing, is it time for precious metals to shine? Here’s why it could be the start of a new gold-silver cycle.

Published

5 days ago

September 11, 2019

Nicholas LePan

The world has experienced a decade of growth fueled by record-low interest rates, a burgeoning money supply, and historic debt levels – but the good times only last so long.

As the global economy slows and eventually begins to retract, can precious metals offer a useful store of value to investors?

Part 1: The Start of a New Cycle

Today’s infographic comes to us from Endeavour Silver, and it outlines some key indicators that precede a coming gold-silver cycle in which exposure to hard assets may help to protect wealth.

The Start of a New Gold-Silver Cycle

Bankers Blowing Bubbles

Since 2008, central bankers around the world launched a historic market intervention by printing money and bailing out major banks. With cheap and abundant money, this strategy worked so well that it created a bull market in every sector — except for precious metals.

Stock markets, consumer lending, and property values surged. Meanwhile, the U.S. Federal Reserve’s assets ballooned, and so did corporate, government, and household debt. By 2018, total debt reached almost $250 trillion worldwide.

Currency vs. Precious Metals

The world awash in unprecedented amounts of currency, and these dollars chase a limited supply of goods. Historically speaking, it’s only a matter of time before the price of goods increases or inflates – eroding the purchasing power of every dollar.

Gold and silver are some of the only assets unaffected by inflation, retaining their value.

Gold and silver are money… everything else is credit.

– J.P. Morgan

The Perfect Story for a Gold-Silver Cycle?

Investors can use several indicators to gauge the beginning of the gold-silver cycle:

Gold/Silver Futures

Most traders do not trade physical gold and silver, but paper contracts with the promise to buy at a future price. Every week, U.S. commodity exchanges publish the Commitment of Traders “COT” report. This report summarizes the positions (long/short) of traders for a particular commodity.

Typically, speculators are long and commercial traders are short the price of gold and silver. However, when speculators and commercial traders positions reach near zero, there is usually a big upswing in the price of silver.
Gold-to-Silver Ratio Compression

As the difference between gold and silver prices decreases (i.e. the compression of the ratio), history suggests silver prices can make big moves upwards in price. The gold-to-silver ratio compression is now at high levels and may eventually revert to its long-term average, which implies a strong movement in prices is imminent for silver.
Scarcity: Declining Silver Production

Silver production has been declining despite its growing importance as a safe haven hedge, as well as its use in industrial applications and renewable technologies.
The Silver Exception

Silver is not just for coins, bars, jewelry and the family silverware. It stands out from gold with its practical industrial uses which account for 56.1% of its annual consumption. Silver will continue to be a critical material in solar technology. While photovoltaics currently account for 8% of annual silver consumption, this is set to change with the dramatic increase in the use of solar technologies.

The Price of Gold and Silver

Forecasting the exact price of gold and silver is not a science, but there are clear signs that point to the direction their prices will head. The prices of gold and silver do not accurately reflect a world awash with cheap and easy money, but now may be their time to shine.

Don’t miss another part of the Silver Series by connecting with Visual Capitalist.

Bitcoin

Decentralized Finance: An Emerging Alternative to the Global Financial System

What is decentralized finance? Learn how technology is changing the rules of the game, creating the potential for a new financial system to emerge.

Published

6 months ago

March 6, 2019

Frank Cardona

Decentralized Finance: An Emerging Alternative

The global financial system has created massive wealth, but its centralized nature means the spoils have gone to the people who are best connected to the financial centers of the world.

As global inequality continues to rise, how can wealth building tools become more accessible to the rest of the global population?

Luckily, technological developments and their rapid adoption make this the right time for a new decentralized financial system to emerge:

The Internet: 3.9 billion users by the end of 2018
The proliferation of smartphones: Two-thirds of the unbanked have mobile phones
Digital banking: over 2 billion users by end of 2018
Bitcoin and Blockchain: the emergence of new public blockchains

Today’s infographic comes to us from investment app Abra, and it highlights how public blockchains could help to enable a decentralized finance system.

What is Decentralized Finance?

Decentralized finance describes a new decentralized financial system that is built on public blockchains like Bitcoin and Ethereum. After all, Bitcoin and Ethereum aren’t just digital currencies — they’re foundational open source networks that could be used to change how the global economy works.

There are six primary features that differentiate public blockchains from the private networks used by governments and traditional financial institutions:

Permissionless: Anyone in the world can connect to the network
Decentralized: Records are kept simultaneously across thousands of computers
Trustless: A central party isn’t required to ensure transactions are valid
Transparent: All transactions are publicly auditable
Censorship Resistant: A central party cannot invalidate user transactions
Programmable: Developers can program business logic into low-cost financial services

In such a financial system, users will have access to apps that use public blockchains to participate in new open global markets – but how would this shape the global financial system for the better?

The Potential Impact of Decentralized Finance

Here are five ways that decentralized finance will have an impact on the world:

1. Wider Global Access to Financial Services

With decentralized finance, anyone with an internet connection and a smartphone could access financial services. There are a variety of barriers that prevent access in the current system:

Status: Lack of citizenship, documentation, credentials, etc.
Wealth: High entry-level funds required to access financial services
Location: Vast distance from functioning economies and financial service providers

In a decentralized financial system, a top trader at a financial firm would have the same level of access as a farmer in a remote region of India.

2. Affordable Cross-Border Payments

Decentralized finance removes costly intermediaries to make remittance services more affordable for the global population.

In the current system, it’s prohibitively expensive for people to send money across borders: the average global remittance fee is 7%. Through decentralized financial services, remittance fees could be below 3%.

3. Improved Privacy and Security

In decentralized finance, users have custody of their wealth and can transact securely without validation from a central party. Meanwhile, in the current system, custodial institutions put people’s wealth and information at risk if they fail to secure it.

4. Censorship-Resistant Transactions

In a decentralized financial system, transactions are immutable and blockchains can’t be shut off by central institutions like governments, central banks, or big corporations.

In places with poor governance and authoritarianism, users can divest to the decentralized financial system to protect their wealth. For example, Venezuelans are already adopting Bitcoin to protect their wealth from government manipulation and hyperinflation.

5. Simple Use

Plug and play apps will allow people to intuitively use decentralized financial services without the complexity of the centralized system.

With a decentralized system, a woman in the Philippines could receive a loan from the U.S., invest in a business in Colombia, and then pay off her debt and purchase a home – all through interoperable apps.

The Potential Blue Sky

Unless governments and central banks suddenly cease to exist, it’s difficult to imagine a world where decentralized finance completely replaces their centralized counterparts.

But what if they can co-exist?

Public blockchains can interact with the traditional financial system to create a new hybrid model:

Users could conduct economic activity on public blockchains and exchange their new wealth into the centralized system.
Users could hedge against systemic risk by diversifying their wealth holdings in both the central and decentralized system.

Like the internet with knowledge, decentralized finance could help democratize the financial system.

But will we allow it?