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During the Crash Course you will often encounter numbers that are expressed in trillions. How much is a trillion?
You know what? I’m not really sure myself.
A trillion is a very, very big number, and I think it would be worth spending a couple of minutes trying to get our arms around the concept.
First, a numerical review.
A thousand is a one with three zeros after it.
A million is a thousand times bigger than that and it’s a one with six zeros after it.
At this level I can really get my mind around the difference between these two numbers. A million dollars in the bank is a very different concept from a thousand dollars in the bank.
I get that.
A billion then is a thousand times bigger than a million, and it’s a one followed by 9 zeros.
And a trillion is a thousand times bigger than that, and it’s a one followed by 12 zeros.
So a trillion is a thousand billions, which means it is a million millions.
You know what? I don’t know what that means!
I can’t visualize that, so let’s take a different tack on this.
Suppose I gave you a thousand dollar bill and said you and a friend had to spend it all in a single evening out on the town. You’d have a pretty good time.
Now suppose you had a stack of thousand dollar bills that was four inches in height. If you did, you know what? Congratulations, you’d be a millionaire.
Now suppose you wanted to enter the super-elite of the wealthy and have a billion dollars. How tall of a stack of thousand dollar bills would that be?
The answer is a stack 358 feet high, seen here reaching 50 feet higher than the Statue of Liberty.
Now how about a stack of thousand dollar bills to equal a trillion dollars? How tall would that stack be? Think of an answer.
Well, that stack would be 67.9 miles high.
And I meant stack, not laid end to end or anything cheesy like that. A solid stack of thousand dollar bills, 67.9 miles high. Now that’s a trillion dollars.
That still doesn’t do it for you?
Okay, I want you to imagine that you’re in a car on a roadway that is lined at the side with a sideways stack of thousand dollar bills.
A nice, compact, rectangular column of thousand dollar bills is snaking along the roadside next to you as you drive.
You drive along — brrrrrrrrrrrrr — without stopping for a little more than an hour, and the entire way there’s that stack of thousand dollar bills right next you, on the side of the road, the whole way.
Said another way, the amount of money created in the past year in the US economic system, if it had been printed up as thousand dollar bills and stacked along the side of the road, would stretch from the center of Manhattan to Trenton, New Jersey
So there it is. Either you can visualize the stack better by driving along next to it, or by standing on top if it, or any other way you wish to express this statement.
But make no mistake, a trillion is a very, very big number and we should not be lulled into complacency simply because it is too big to really get our minds around. Instead, we should be very nervous that our money supply now stands at – not 1 – but 12 trillions of dollars.
And the total accumulated debts and liabilities of the US are several times greater than that!
We are living in an era where our leaders are making decisions at orders of magnitude that they simply can’t truly understand.
And many politicians have less expertise in math, economics or business than most people watching this video.
When they vote for the next trillion-dollar bailout, raise the debt level by another trillion, or pressure the Federal Reserve for another trillion-dollar stimulus program – they don’t have any real sense of what the implications will be. No one can.
We have reached the point where we’re operating in territory beyond our neural programming.
As a result, unintended consequences to our current policies are guaranteed. We need to be ready for that.
Oh, and if you think wrapping your brain around the concept of a trillion is hard, let’s turn to Japan for a moment.
In August of 2013, Japan’s national debt exceeded 1 quadrillion yen for the first time.
How much is a quadrillion? Well, if we swapped out the $1,000 bills we’ve been using with 1,000-Yen notes, the stack would wrap around the Earth almost 3 times.
Ok, let’s move on to the next chapter. My brain hurts.
Please join me for our next chapter, a very important one, on Debt.