Ladies and gentlemen, may I introduce the TRILLION!

I suppose it was inevitable in these crazy times that eventually the amount of money making the headlines would reach a trillion. In case you’re not sure, one trillion is a million million or 1,000,000,000,000. Choose any currency you like and that’s an awful lot of wonga! The headlines from the recent G20 summit finally made it possible for one event to trigger more than a trillion.

The scale of these numbers clearly highlights just how ludicrous this crisis has become. Not too long ago, losses in the hundreds of thousands would have been treated as catastrophic. As the crisis started to unfold we quickly got used to tens or hundreds of millions going missing. About a year ago, the IMF were warning that the crisis could cost in total as much as a trillion. Less than three months ago, we were shocked by figures for individual companies like Merrill Lynch’s $22.1 billion, although by that time almost every figure was a factor of billions. The billions went from tens to hundreds and now eventually to thousands. One has to wonder where it will end.

I was trying to find an easily understood ‘balance sheet’ for the global crisis so far just to see what the running total is because obviously all these headline figures need to be added up to see the true picture. I haven’t found a global one yet but CNBC have been adding it up for the USA and they have a total so far of nearly $7.4 trillion! For that money, even at inflation adjusted costs, you could do any of the following and still have some change:

  • Build nearly 1,000 Panama Canals
  • Fund 64 Marshall Plans (European Recovery after WWII)
  • Race to the moon 31 times
  • Have 12 Gulf War II / War on Terrors
  • Pay for the Vietnam War 10.6 times over
  • Fund NASA for 434 years

Try $7.36 trillion dollars. That’s more than double what was spent on WW II, if adjusted for inflation, based on our computations from a variety of estimates and sources. Not only is it an astronomical amount of money, it’s a complicated cocktail of budgeted dollars, actual spending, guarantees, loans, swaps and other market mechanisms by the Federal Reserve, the Treasury and other offices of government taken over roughly the last year, based on government data and news releases. Strictly speaking, not every cent is a direct result of what’s called the financial crisis, but they’re all arguably related to it.

Staggering! And that’s only the USA.

Imagine the bitching and moaning that would ensue if any government proposed spending even a fraction of this amount on something very useful but ridiculously expensive, for the sake of argument a road bridge across the Mediterranean or a super-high speed rail service from Warsaw to Istanbul. It just wouldn’t happen, and yet these guys piss away two world wars on what…..f**k all!

As a simple man though, it really would be nice to find a site that explains in plain language first of all how we managed to dig a hole this deep without anyone noticing, secondly where all these trillions to fill the hole are coming from and thirdly, whose pockets are now empty and how worried we should be about that.

I also have to wonder, given that nobody still seems to really know what the hell’s going on, whether there’s a chance we are taking a global sledgehammer to crack a global nut and if so, what the effect will be of too much aid sloshing around the system in a year’s time? Nice problem to have I suppose.


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