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ScottO

Naive question....

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I always kind of considered money like water. Meaning it never really goes away, just redistributes. So I ask....where is all the money? It's not in my savings account or 401K or in the bank to loan...where is it?

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Been thinking about this....the only conclusion I can come up with is as above...it never really existed, it was all credit. Paper money, no actual cash. So now we make a big adjustment. Those on credit learn to do without, everything. They learn to go back to a cash and barter society. It'll get better again. Hopefully with a better understanding of how to live. Scott

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View PostBeen thinking about this....the only conclusion I can come up with is as above...it never really existed, it was all credit. Paper money, no actual cash. So now we make a big adjustment. Those on credit learn to do without, everything. They learn to go back to a cash and barter society. It'll get better again. Hopefully with a better understanding of how to live. Scott

 

clapping.gif Its all paper...This country lives on credit. I have one credit card for emergency's. My theory is if I cant pay cash for it I cant afford it. Things will get better but it will take years to get there. Things will get worse before they get better (3 and 5 year adjustable's will come do soon and that will lead to more foreclosures)(More stores will fold do to bad X-Mass sales) Like ScottO said hopefully people will learn.

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Saw this on the news today.Govt.Bail out ? Merril Lynch CEO spent a bunch remolding his office.The rug alone was $87.000headscratch.gif .The dude spent like over $300.000 sprucing up the cave.kooky.gif I think he got fired though. My guess only cause the media got ahold of the story.

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View PostSaw this on the news today.Govt.Bail out ? Merril Lynch CEO spent a bunch remolding his office.The rug alone was $87.000headscratch.gif .The dude spent like over $300.000 sprucing up the cave.kooky.gif I think he got fired though. My guess only cause the media got ahold of the story.

 

I think you've seen the last of the Bush bail outs. I think from now on any bail out will have huge accounting over seeing it.

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Only money is money.

Stock prices are not money. If you get a statement from your broker that says "you have 1000 shares of Acme Buggywhip, and that was selling on the market yesterday for $10 a share, so you have $10,000" then the broker is lying to you. This is an example of the illusion that fishinambition mentioned.

 

You only have $10,000 if you sell the shares at that market price. And the only way you will get that market price is if not too many other people want to sell their Acme Buggywhip as well.

 

What do you think would happen if all the shareholders wanted out? Or even some large percentage? Well we see what happens.. the market loses half its value, for example.

 

So the money the press likes to tell you "has vanished" was always vanished. People who dont think real clearly about economics were led to believe it existed and that they had some of it.

 

Another way to think of it is this. A variant of musical chairs (or in the case of stock and stock prices, musical shares). Round and round you and your 19 friends go. There are 15 chairs. Every now and then players get tired and sit for spell... rest. Since only 5 or 6 are tired at a time, there are plenty of chairs... "chairs for everyone" since no one who wants a chair fails to get one. But suddenly... you all get tired... everyone tries to sit down... surprise, 5 chairs "have vanished" and 5 of the 20 dont get to sit.

 

Well the chairs didnt vanish... they were never there, but the nature of the game in normal unperturbed steady state made is seem there were enough chairs for everyone.

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