Where has the money gone?

Aliantha · 12-10-2008, 06:53 PM

So, with this crisis going on with money all over the world, it's obvious that money is 'falling out' of economies all over, but where is it falling to? Is it that rather than profits being spread all over the place fairly evenly, they're going to just a few places? If so, where? And why don't those places then spend the money?

I realize a lot of the problem is all the 'not real' money spent by people living on credit etc, but surely there must be someone or somewhere that all this money has gone to?

What businesses are actually making a profit these days?

classicman · 12-10-2008, 07:31 PM

Most of the money is apparently staying within the commercial banks. That which is being spent is covering past debts. How this trickle down shit was supposed to work is beyond me. We could have bought every defaulting loan and still had plenty to spare to waste elsewhere. At least that way more people would have kept their homes... maybe.

Skunks · 12-10-2008, 07:48 PM

Well, there's a hole in daddy's arm where all the money goes...

ZenGum · 12-10-2008, 08:13 PM

A lot of the money that has "gone" never really existed.

Suppose you buy some shares for $1,000. They go up to $3,000, but you don't sell them. Have you made $2,000? It is tempting to think you have, but you haven't until you sell them.
You may use them as collateral and borrow $3,000. Then the market falls and the shares are worth $1,000. The bank forecloses, and takes your $1,000 worth of shares. You're back to zero and the bank is down $2000. Thus money never really "went" somewhere, rather we realized that we didn't have the money we mistakenly thought we had.

ETA: Consider that few people asked "where is the money coming from?" during the big growth surge that got us here. You might say that we borrowed it (in, say 2003) from the future (2009) and we are now paying it back. So instead of "where did the money go?" you might ask "when did the money go?". The last decade, mostly.

Pie · 12-11-2008, 03:15 PM

Quote:

Originally Posted by ZenGum

So instead of "where did the money go?" you might ask "when did the money go?". The last decade, mostly.

Zen, you live up to your name. I like it.

Aliantha · 12-11-2008, 03:40 PM

Quote:

Originally Posted by ZenGum

A lot of the money that has "gone" never really existed.

Suppose you buy some shares for $1,000. They go up to $3,000, but you don't sell them. Have you made $2,000? It is tempting to think you have, but you haven't until you sell them.
You may use them as collateral and borrow $3,000. Then the market falls and the shares are worth $1,000. The bank forecloses, and takes your $1,000 worth of shares. You're back to zero and the bank is down $2000. Thus money never really "went" somewhere, rather we realized that we didn't have the money we mistakenly thought we had.

ETA: Consider that few people asked "where is the money coming from?" during the big growth surge that got us here. You might say that we borrowed it (in, say 2003) from the future (2009) and we are now paying it back. So instead of "where did the money go?" you might ask "when did the money go?". The last decade, mostly.

Well I knew all that mate, but this 'crisis' is not just affecting people who invest in the stock market directly. It's affecting other ordinary blue collar workers too. Suddenly they're finding it hard to pay the bills etc.

All I'm wondering is what businesses are making money now? There must be profits somewhere, somehow, so where are they?

Aliantha · 12-11-2008, 03:42 PM

Quote:

Originally Posted by classicman

Most of the money is apparently staying within the commercial banks. That which is being spent is covering past debts. How this trickle down shit was supposed to work is beyond me. We could have bought every defaulting loan and still had plenty to spare to waste elsewhere. At least that way more people would have kept their homes... maybe.

Well if we're going to talk about trickle down effect, then it definitely happens a lot fucking quicker on the way out than on the way in.

It took 10 years for economies to top out thanks to growing economies and it's taken less than 1 year for them to go to shit when the proverbial hit the fan.

Shawnee123 · 12-11-2008, 03:43 PM

Quote:

All I'm wondering is what businesses are making money now? There must be profits somewhere, somehow, so where are they?

Higher education? Medical?

Flint · 12-11-2008, 03:45 PM

Quote:

Originally Posted by Shawnee123

Higher education? Medical?

You're in education, right? I'm in Medical. We both just got new jobs with big raises, right? It certainly seems that way.

Shawnee123 · 12-11-2008, 03:52 PM

Very true!

I almost feel guilty. I've struggled for years yet now that I am in a good place a lot of people aren't and I wonder why I deserve to be so lucky.

Clodfobble · 12-11-2008, 04:52 PM

Quote:

Originally Posted by Aliantha

All I'm wondering is what businesses are making money now? There must be profits somewhere, somehow, so where are they?

Well, ah, Mr. Clod works for an employment messageboard/searchengine. They're doing pretty well right now.

Elspode · 12-11-2008, 05:56 PM

Zen is essentially dead on, here. The other side of this economic coin is repayment of loans/mortgages. The securities that were made by bundling together dicey loans had a *theoretical* value based on the interest that would have been earned had people actually made payments on those loans. People couldn't pay on mortgages that were made because they shouldn't have been able to get those mortgages in the first place, and so those created securities yielded...zip.

The financial growth of the past decade in this country has been illusory, a puff of smoke. The precursor to it was the dotcom bust, where speculative investment ultimately was lost because there was *nothing underpinning the investments*. It has been an economy based on vaporware, essentially, and worse, it has all been driven by *credit*. Credit which no one is now able to repay.

The infusion of cash to the banks that our government has undertaken is being used at present to simply stabilize their own asses. They aren't putting the money into play so that the economy can stabilize.

Doesn't matter, though, because *that* money isn't based on anything, either. The Fiat system of finance has hit the wall. Without jobs, we can no longer be consumers. Without natural resources, we can no longer sell anything.

Ultimately, all we have is the fruit of our labors and the raw materials we can peddle on the open market. And we're out.

HungLikeJesus · 12-11-2008, 06:10 PM

We should have never gone off the gold standard.

footfootfoot · 12-11-2008, 08:41 PM

Umm, singing lessons?

xoxoxoBruce · 12-12-2008, 01:23 AM

Quote:

All I'm wondering is what businesses are making money now? There must be profits somewhere, somehow, so where are they?

Porn. More unemployed with more time to kill.

12-10-2008, 06:53 PM	#1
Aliantha trying hard to be a better person Join Date: Jan 2006 Location: Brisbane, Australia Posts: 16,493	Where has the money gone? So, with this crisis going on with money all over the world, it's obvious that money is 'falling out' of economies all over, but where is it falling to? Is it that rather than profits being spread all over the place fairly evenly, they're going to just a few places? If so, where? And why don't those places then spend the money? I realize a lot of the problem is all the 'not real' money spent by people living on credit etc, but surely there must be someone or somewhere that all this money has gone to? What businesses are actually making a profit these days? __________________ Kind words are the music of the world. F. W. Faber

12-10-2008, 07:31 PM	#2
classicman barely disguised asshole, keeper of all that is holy. Join Date: Nov 2007 Posts: 23,401	Most of the money is apparently staying within the commercial banks. That which is being spent is covering past debts. How this trickle down shit was supposed to work is beyond me. We could have bought every defaulting loan and still had plenty to spare to waste elsewhere. At least that way more people would have kept their homes... maybe. __________________ "like strapping a pillow on a bull in a china shop" Bullitt

12-10-2008, 08:13 PM	#4
ZenGum Doctor Wtf Join Date: Oct 2007 Location: Badelaide, Baustralia Posts: 12,861	A lot of the money that has "gone" never really existed. Suppose you buy some shares for $1,000. They go up to $3,000, but you don't sell them. Have you made $2,000? It is tempting to think you have, but you haven't until you sell them. You may use them as collateral and borrow $3,000. Then the market falls and the shares are worth $1,000. The bank forecloses, and takes your $1,000 worth of shares. You're back to zero and the bank is down $2000. Thus money never really "went" somewhere, rather we realized that we didn't have the money we mistakenly thought we had. ETA: Consider that few people asked "where is the money coming from?" during the big growth surge that got us here. You might say that we borrowed it (in, say 2003) from the future (2009) and we are now paying it back. So instead of "where did the money go?" you might ask "when did the money go?". The last decade, mostly. __________________ Shut up and hug. MoreThanPretty, Nov 5, 2008. Just because I'm nominally polite, does not make me a pussy. Sundae Girl.

12-11-2008, 03:52 PM	#10
Shawnee123 Why, you're a regular Alfred E Einstein, ain't ya? Join Date: Jun 2006 Posts: 21,206	Very true! I almost feel guilty. I've struggled for years yet now that I am in a good place a lot of people aren't and I wonder why I deserve to be so lucky. __________________ A word to the wise ain't necessary - it's the stupid ones who need the advice. --Bill Cosby

12-11-2008, 05:56 PM	#12
Elspode When Do I Get Virtual Unreality? Join Date: Dec 2002 Location: Raytown, Missouri Posts: 12,719	Zen is essentially dead on, here. The other side of this economic coin is repayment of loans/mortgages. The securities that were made by bundling together dicey loans had a theoretical value based on the interest that would have been earned had people actually made payments on those loans. People couldn't pay on mortgages that were made because they shouldn't have been able to get those mortgages in the first place, and so those created securities yielded...zip. The financial growth of the past decade in this country has been illusory, a puff of smoke. The precursor to it was the dotcom bust, where speculative investment ultimately was lost because there was nothing underpinning the investments. It has been an economy based on vaporware, essentially, and worse, it has all been driven by credit. Credit which no one is now able to repay. The infusion of cash to the banks that our government has undertaken is being used at present to simply stabilize their own asses. They aren't putting the money into play so that the economy can stabilize. Doesn't matter, though, because that money isn't based on anything, either. The Fiat system of finance has hit the wall. Without jobs, we can no longer be consumers. Without natural resources, we can no longer sell anything. Ultimately, all we have is the fruit of our labors and the raw materials we can peddle on the open market. And we're out. __________________ "To those of you who are wearing ties, I think my dad would appreciate it if you took them off." - Robert Moog

12-10-2008, 07:48 PM	#3
Skunks I thought I changed this. Join Date: Nov 2002 Location: western nowhere, ny Posts: 412	Well, there's a hole in daddy's arm where all the money goes...

12-11-2008, 06:10 PM	#13
HungLikeJesus Only looks like a disaster tourist Join Date: Feb 2007 Location: above 7,000 feet Posts: 7,208	We should have never gone off the gold standard. __________________ Keep Your Bodies Off My Lawn SteveDallas's Random Thread Picker.

12-11-2008, 08:41 PM	#14
footfootfoot To shreds, you say? Join Date: Aug 2004 Location: in the house and on the street-how many, many feet we meet! Posts: 18,449	Where has the money gone? Umm, singing lessons? __________________ The internet is a hateful stew of vomit you can never take completely seriously. - Her Fobs

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