Home > Finance > Tangible Units to Quantify a Trillion Dollars

Tangible Units to Quantify a Trillion Dollars

One Sydney = $640 billion

One Sydney = $640 billion

How much is a Sydney?

When someone gives you fifty dollars, you can imagine straight away what it will buy you. You could quantify it in loaves of bread, dinners at the local restaurant, or kilograms of horse manure.

But when someone talks of a trillion dollars then it is useful to talk in terms of houses, which most people find tangible.

Median house prices around Australia can be found easily. Using this information, a trillion Australian dollars ($1,000,000,000,000.00) will buy:

  • Sydney: 1,865,598 houses
  • Melbourne: 2,236,330 houses
  • Brisbane: 2,314,648 houses

The number of homes in Sydney is roughly 1.2 million. However, the actual house price as quoted by various agencies is probably inflated (easily by 5%), and a larger number of houses is probably accounted for by this amount of money. Additionally, unit prices are less than house prices by up to $200,000, so a great deal more dwellings would be afforded than the above list estimates. Our estimations are therefore very conservative.

So, when we read of bailouts in the hundreds of billions, it might be reasonable to count them using a “Sydney” unit. A Sydney (as at December 2008) was valued at $643,225,200,000, or $640 billion (at most).

When the Federal Reserve issued 1.2 trillion dollars in new money ($US), this meant that the USA had issued new money to the value of at least two Sydneys, possibly three.

Now please excuse me while I fall off my chair.

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