permaculture

[Marimike6@cs.com]

These are some really good questions:

Nicholas Roberts wrote:
hi Dean

this is a really obvious question, but I have yet to find a good answer;

where does the money "lost" in the stock and housing bubbles go ?

is it destroyed ? how and where ?

is it transferred ? how and where ?

is it accumulated ? by whom, how, where ?

can we get it back ?

are there any good flow diagrams that explain this in plain terms for regular 
folks... 

Nicholas,

When you buy $100 worth of stocks the $100 is not lost or destroyed. It goes 
to the seller. And out of the hundred a portion goes to the broker.

If the stock plummets to zero, the portion the broker earned has not been 
lost. And if you bought from another stockholder, the money you gave him has 
not 
been lost. But if you bought from the company and the company went broke, 
most 
of the value of the assets it bought have been lost. And the value of what 
you bought has been lost. It's like buying a tree.. and then the tree dies. 
The 
nursery has the $100 and you end up with nada.

On the other hand, if seven trillion trees die at the same time, we all lose. 
And over this past year seven trillion dollars worth of value have left the 
companies listed in our stock exchanges. That translates into lost income for 
the companies and lost jobs for their employees. When people stop buying 
their 
goods they can't continue paying people to produce them. Those people stop 
buying as well, and the reverberations echo throughout the economy.

I think Obama has it right: create several million temporary jobs, to kick 
start our ability to stay in our homes, make our payments and buy more stuff. 
That will put people back to work, as the cars on sale disappear from the 
showroom and consumer junk empties off the store shelves, bringing the stores 
back 
to life.

On the other hand, when business picks back up we resume our exhaustion of 
the earth's resources. We use more energy, tearing down more mountains to 
burn 
the coal that poisons our atmosphere. Developers have more investment funds 
available to tear up the face of the planet and throw up more expensive cheap 
homes. Etcetera.

Well, you can't have everything. We're using less energy now, and putting 
less carbon into the skies. That's because fewer of us can afford heating oil 
to 
put in our furnaces.. or even cheap gas to put in our cars. Should we root 
for 
the Depression to become more fully entrenched, until people start dying off?

I guess that's a deep question.