First the trite answer: if everyone on the planet is a billionaire, it’s because every country in the world has suffered a lot of inflation, either on the long term or as a result of hyperinflation.

Moving on.

What would happen if everyone on the planet suddenly had the equivalent of one billion US dollars added to their bank account?

Immediate massive inflation, of course. Physical money transactions become impossible until the governments produce new currrency. A lot of instability as we find the new price points for every product and service, most of them proportional to the old prices.

Now, many answers believe that wealth inequality would take a massive hit: instead of some people having a billion times more money than others (ignoring debt), the worse ratio would be something like 20 or 50, and only in rare cases.

But wealth isn’t only about money. Rich people’s possessions are simply worth much more, and inflation has little effect on the value of those possessions.

The biggest impact would be on debtors and creditors. Are you in debt? Well not anymore you’re not. You just got much richer. Are you a creditor? Well tough luck: any money you loaned is simply lost. Do you know how much money banks credit at any given time?

Remember the financial crisis of 2007–09? Where banks almost collapsed? It was nothing compared to this. Prepare for complete market failure, and banks being only part of it.

The only way I see out of it is quick government intervention to restore the status quo. No matter how abused it is, money is a representation of value that modern society cannot function without in the short term, and the recent billionarization of everyone killed money. The government could force banks to cancel the extra billion in every account. There would be irregularities, and lawyers would have a field day, but nothing short of that would have a chance of averting a global crisis.

Source: QUORA