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.
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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?