Markets
All of the World’s Money and Markets in One Visualization (2022)
All of the World’s Money and Markets in One Visualization
The era of easy money is now officially over.
For 15 years, policymakers have tried to stimulate the global economy through money creation, zero interest-rate policies, and more recently, aggressive COVID fiscal stimulus.
With capital at near-zero costs over this stretch, investors started to place more value on cash flows in the distant future. Assets inflated and balance sheets expanded, and money inevitably chased more speculative assets like NFTs, crypto, or unproven venture-backed startups.
But the free money party has since ended, after persistent inflation prompted the sudden reversal of many of these policies. And as Warren Buffett says, it’s only when the tide goes out do you get to see “who’s been swimming naked.”
Measuring Money and Markets in 2022
Every time we publish this visualization, our common unit of measurement is a two-dimensional box with a value of $100 billion.
Even though you need many of these to convey the assets on the balance sheet of the U.S. Federal Reserve, or the private wealth held by the world’s billionaires, it’s quite amazing to think what actually fits within this tiny building block of measurement:
Our little unit of measurement is enough to pay for the construction of the Nord Stream 2 pipeline, while also buying every team in the NHL and digging FTX out of its financial hole several times over.
Here’s an overview of all the items we have listed in this year’s visualization:
| Asset category | Value | Source | Notes |
|---|---|---|---|
| SBF (Peak Net Worth) | $26 billion | Bloomberg | Now sits at <$1B |
| Pro Sports Teams | $340 billion | Forbes | Major pro teams in North America |
| Cryptocurrency | $760 billion | CoinMarketCap | Peaked at $2.8T in 2021 |
| Ukraine GDP | $130 billion | World Bank | Comparable to GDP of Mississippi |
| Russia GDP | $1.8 trillion | World Bank | The world's 11th largest economy |
| Annual Military Spending | $2.1 trillion | SIPRI | 2021 data |
| Physical currency | $8.0 trillion | BIS | 2020 data |
| Gold | $11.5 trillion | World Gold Council | There are 205,238 tonnes of gold in existence |
| Billionaires | $12.7 trillion | Forbes | Sum of fortunes of all 2,668 billionaires |
| Central Bank Assets | $28.0 trillion | Trading Economics | Fed, BoJ, Bank of China, and Eurozone only |
| S&P 500 | $36.0 trillion | Slickcharts | Nov 20, 2022 |
| China GDP | $17.7 trillion | World Bank | |
| U.S. GDP | $23.0 trillion | World Bank | |
| Narrow Money Supply | $49.0 trillion | Trading Economics | Includes US, China, Euro Area, Japan only |
| Broad Money Supply | $82.7 trillion | Trading Economics | Includes US, China, Euro Area, Japan only |
| Global Equities | $95.9 trillion | WFE | Latest available 2022 data |
| Global Debt | $300.1 trillion | IIF | Q2 2022 |
| Global Real Estate | $326.5 trillion | Savills | 2020 data |
| Global Private Wealth | $463.6 trillion | Credit Suisse | 2022 report |
| Derivatives (Market) | $12.4 trillion | BIS | |
| Derivatives (Notional) | $600 trillion | BIS |
Has the Dust Settled Yet?
Through previous editions of our All the World’s Money and Markets visualization, we’ve created snapshots of the world’s assets and markets at different points in time.
For example, in our 2017 edition of this visualization, Apple’s market capitalization was only $807 billion, and all crypto assets combined for $173 billion. The global debt total was at $215 trillion.
| Asset | 2017 edition | 2022 edition | Change (%) |
|---|---|---|---|
| Apple market cap | $807 billion | $2.3 trillion | +185% |
| Crypto | $173 billion | $760 billion | +339% |
| Fed Balance Sheet | $4.5 trillion | $8.7 trillion | +93% |
| Stock Markets | $73 trillion | $95.9 trillion | +31% |
| Global Debt | $215 trillion | $300 trillion | +40% |
And in just five years, Apple nearly quadrupled in size (it peaked at $3 trillion in January 2022), and crypto also expanded into a multi-trillion dollar market until it was brought back to Earth through the 2022 crash and subsequent FTX implosion.
Meanwhile, global debt continues to accumulate—growing by $85 trillion in the five-year period.
With interest rates expected to continue to rise, companies making cost cuts, and policymakers reining in spending and borrowing, today is another unique snapshot in time.
Now that the easy money era is over, where do things go from here?
Markets
How Disinflation Could Affect Company Financing
History signals that after a period of slowing inflation—also known as disinflation—debt and equity issuance expands.
How Disinflation Could Affect Company Financing
The macroeconomic environment is shifting. Since the second half of 2022, the pace of U.S. inflation has been dropping.
We explore how this disinflation may affect company financing in Part 2 of our Understanding Market Trends series from Citizens.
Disinflation vs. Deflation
The last time inflation climbed above 9% and then dropped was in the early 1980’s.
| Time Period | March 1980-July 1983 | June 2022-April 2023* |
|---|---|---|
| Inflation at Start of Cycle | 14.8% | 9.1% |
| Inflation at End of Cycle | 2.5% | 4.9% |
* The June 2022-April 2023 cycle is ongoing. Source: Federal Reserve. Inflation is based on the Consumer Price Index.
A decrease in the rate of inflation is known as disinflation. It differs from deflation, which is a negative inflation rate like the U.S. experienced at the end of the Global Financial Crisis in 2009.
How might slowing inflation affect the amount of debt and equity available to companies?
Looking to History
There are many factors that influence capital markets, such as technological advances, monetary policy, and regulatory changes.
With this caveat in mind, history signals that both debt and equity issuance expand after a period of disinflation.
Equity Issuance
Companies issued low levels of stock during the ‘80s disinflation period, but issuance later rose nearly 300% in 1983.
| Year | Deal Value |
|---|---|
| 1980 | $2.6B |
| 1981 | $5.0B |
| 1982 | $3.6B |
| 1983 | $13.5B |
| 1984 | $2.5B |
| 1985 | $12.0B |
| 1986 | $24.2B |
| 1987 | $24.9B |
| 1988 | $16.9B |
| 1989 | $12.9B |
| 1990 | $13.4B |
| 1991 | $45.2B |
| 1992 | $50.3B |
| 1993 | $95.3B |
| 1994 | $63.7B |
| 1995 | $79.7B |
| 1996 | $108.7B |
| 1997 | $106.5B |
| 1998 | $97.0B |
| 1999 | $142.8B |
| 2000 | $156.5B |
Source: Bloomberg. U.S. public equity issuance dollar volume that includes both initial and follow-on offerings and excludes convertibles.
Issuance grew quickly in the years that followed. Other factors also influenced issuance, such as the macroeconomic expansion, productivity growth, and the dotcom boom of the ‘90s.
Debt Issuance
Similarly, companies issued low debt during the ‘80s disinflation, but levels began to increase substantially in later years.
| Year | Deal Value | Interest Rate |
|---|---|---|
| 1980 | $4.5B | 11.4% |
| 1981 | $6.7B | 13.9% |
| 1982 | $14.5B | 13.0% |
| 1983 | $8.1B | 11.1% |
| 1984 | $25.7B | 12.5% |
| 1985 | $46.4B | 10.6% |
| 1986 | $47.1B | 7.7% |
| 1987 | $26.4B | 8.4% |
| 1988 | $24.7B | 8.9% |
| 1989 | $29.9B | 8.5% |
| 1990 | $40.2B | 8.6% |
| 1991 | $41.6B | 7.9% |
| 1992 | $50.0B | 7.0% |
| 1993 | $487.8B | 5.9% |
| 1994 | $526.4B | 7.1% |
| 1995 | $632.7B | 6.6% |
| 1996 | $906.0B | 6.4% |
| 1997 | $1.3T | 6.4% |
| 1998 | $1.8T | 5.3% |
| 1999 | $1.8T | 5.7% |
| 2000 | $2.8T | 6.0% |
Source: Dealogic, Federal Reserve. Data reflects U.S. debt issuance dollar volume across several deal types including: Asset Backed Securities, U.S. Agency, Non-U.S. Agency, High Yield, Investment Grade, Government Backed, Mortgage Backed, Medium Term Notes, Covered Bonds, Preferreds, and Supranational. Interest Rate is the 10 Year Treasury Yield.
As interest rates dropped and debt capital markets matured, issuing debt became cheaper and corporations seized this opportunity.
It’s worth noting that debt issuance was also impacted by other factors, like the maturity of the high-yield debt market and growth in non-bank lenders such as hedge funds and pension funds.
Then vs. Now
Could the U.S. see levels of capital financing similar to what happened during the ‘80s disinflation? There are many economic differences between then and now.
Consider how various indicators differed 10 months into each disinflationary period.
| January 1981 | April 2023* | |
|---|---|---|
| Inflation Rate Annual | 11.8% | 4.9% |
| Inflation Expectations Next 12 Months | 9.5% | 4.5% |
| Interest Rate 10-Yr Treasury Yield | 12.6% | 3.7% |
| Unemployment Rate Seasonally Adjusted | 7.5% | 3.4% |
| Nominal Wage Growth Annual, Seasonally Adjusted | 9.3% | 5.0% |
| After-Tax Corporate Profits As Share of Gross Value Added | 9.1% | 13.8% |
* Data for inflation expectations and interest rate is as of May 2023, data for corporate profits is as of Q4 1980 and Q1 2023. Inflation is a year-over-year inflation rate based on the Consumer Price Index. Source: Federal Reserve.
The U.S. economy is in a better position when it comes to factors like inflation, unemployment, and corporate profits. On the other hand, fears of an upcoming recession and turmoil in the banking sector have led to volatility.
What to Consider During Disinflation
Amid uncertainty in financial markets, lenders and investors may be more cautious. Companies will need to be strategic about how they approach capital financing.
- High-quality, profitable companies could be well positioned for IPOs as investors are placing more focus on cash flow.
- High-growth companies could face fewer options as lenders become more selective and could consider alternative forms of equity and private debt.
- Companies with lower credit ratings could find debt more expensive as lenders charge higher rates to account for market volatility.
In uncertain times, it’s critical for businesses to work with the right advisor to find—and take advantage of—financing opportunities.
Learn more about working with Citizens.
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