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  • From: Marimike6@cs.com
  • To: permaculture@lists.ibiblio.org
  • Subject: Re: [permaculture] Fwd: Where does the "lost" money go ? can we find it and g...
  • Date: Tue, 6 Jan 2009 09:18:45 EST

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.



  • Re: [permaculture] Fwd: Where does the "lost" money go ? can we find it and g..., Marimike6, 01/06/2009

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