Global Wealth: Gold, Real Estate and Stock Markets

1...Gold and other precious metals are a real wealth, so how much gold is there in the world? The answer is that no one knows. Today, there are two basic estimates for this number for your reference. The first is the gold reserves of central banks of various countries, which total less than 30,000 tons. According to today's market price of gold, it is estimated to be 2 trillion US dollars, which is not much.

Another estimate is the total amount of gold ever mined by humans. Different people have different estimates of this number. Let's take the upper limit, 244,000 tons. Its value is about 15.9 trillion US dollars, which is much more than the gold reserves of various countries, but not too much. Why do you say that?

Here is a comparison for your reference. Today, the total value of Bitcoin is about $1.4 trillion. Of course, the price of Bitcoin fluctuates greatly, and it is easy to exceed the total value of gold held by central banks of various countries. By the way, many central banks in the world also hold a certain amount of Bitcoin. For example, it is estimated that the US government holds 2.7% of all Bitcoins, which is not a low proportion.

Of course, compared with real estate and the stock market, the value of precious metals or virtual currencies is not even a fraction of that. According to the statistics agency Statista, in 2024, the total market value of real estate in the world will be approximately 300-635 trillion US dollars. I personally think that the upper limit is a bit high. Here I use a more conservative figure, which is 300 trillion US dollars. Among the real estate in the world, 80% is residential real estate and 20% is commercial real estate. This ratio is consistent in various data sources.

2...Among all countries, which country has the highest total value of real estate? There are also great differences in different data sources. Generally speaking, some data sources show that the United States has the highest value, exceeding 70 trillion US dollars; some show that the United States and China are similar, both around 65 trillion US dollars.

However, the data given by China is very different. Today, the domestic media generally adopts the statement that China's housing market value is about 65 trillion US dollars, while the United States is only 33.6 trillion US dollars. Some media even say that China's housing market value exceeds the total of the United States, Japan and Europe. This estimate is obviously unreliable. Whether the Chinese data mentioned here is accurate, I can't find the accurate data source and algorithm to confirm it.

However, the description of the US data in the above statement is obviously wrong. The property tax information and transaction information of every house in the United States are public, so it is easy to estimate the value. In addition, websites such as Zillow and Redfin track the valuation of each house all year round, so the value of the US housing market is relatively transparent. According to the conservative estimates of these two websites, the value of the US residential market is 50-53 trillion US dollars, which is not much different from that of China.

In addition, the Federal Reserve estimates that commercial real estate is worth $22.5 trillion, and the two together exceed $70 trillion. Therefore, most reliable media and analysts generally believe that the housing markets in China and the United States are similar in size, each accounting for about 21% of the world's total.

3... Let's talk about the stock market. This number is relatively easy to calculate accurately. As of September 2024, the US stock market size is 59 trillion US dollars, ranking first, accounting for 60% of the global total market value. China is 7 trillion US dollars, ranking second, and Japan is 5.3 trillion US dollars, ranking third.

Now we can take China and the United States as examples to summarize the world's wealth. In the United States, the residential market is worth about $50 trillion, while the stock market is about $59 trillion. The two are close in size, so the value of real estate and stock under the name of individuals in the United States is roughly 1:1; in China, the market value of housing is much higher than the stock market, so China's personal wealth is mainly concentrated in real estate.

Individual deposits in China and the United States

After real estate and stocks, the third largest personal property is bank deposits. China's total personal deposits are 145 trillion yuan, about 20 trillion US dollars, and the amount of deposits in the United States is much smaller than that in China.

In general, Americans don't like to save cash, thinking that it has no investment return. If you want to preserve value more safely, you usually buy government bonds. Of the 33 trillion U.S. dollars in national debt, more than 26 trillion are held by individuals, most of whom are Americans, and 7 trillion are held by governments around the world. In addition, the United States has 4.1 trillion U.S. dollars in local debt, that is, debt issued by state and county governments, most of which are held by residents within the state. This is not because out-of-state people cannot buy bonds from other states, but because it is not cost-effective in terms of taxation.

China's national debt is relatively small, less than 5 trillion US dollars. Local debts, including debts of financing platforms, are relatively large, but most of them are purchased by banks or packaged into financial products for sale, which overlap with bank savings. Therefore, it is difficult to count how many bonds individuals hold. A simple way is to count national debts as individuals and local debts as companies and banks. In this way, China's personal savings plus bonds are about 24-25 trillion US dollars.

In general, among relatively safe investments, the bonds and savings held by American individuals are about $40 trillion. In general, the assets of American individuals in the stock market, housing market and bond market are about $150 trillion. Of course, when we talk about assets, we cannot forget debt. The total debt of American individuals is about $18 trillion. After deducting debt from assets, the net worth of American individuals is about $130 trillion. In contrast, the total personal debt of China is about 200 trillion yuan, or about $28 trillion. Therefore, if the value of the house and the value of stocks are not taken into account, the net worth of Chinese families will be negative.

Many people think that Americans rarely save money and spend whatever they earn. This is actually a huge misunderstanding. Although Americans do not save cash, it does not mean that they do not save money. They still save money for retirement, and save a lot. The balance of retirement asset accounts (IRA) set up by individuals in the United States is as high as 38 trillion US dollars, and the individual retirement accounts (401K plans) set up by employers also have 7 trillion US dollars. These are two different types of accounts, adding up to more than 45 trillion US dollars, or 140,000 US dollars per person.