Where has all the money gone to?

[quyen]

We all know the banks lost billions in the property market but where has the money gone to and what have they done with it?

Money does not disappear so who has profited? Property developers/ property speculators/people who downsized at the right time? Where are they putting their money now?

[Timmy35]

quyen said:

Money does not disappear

Why do you say that? Of course it can, money is by and large nothing more than digits on a banks computer, in which we all believe ( in much the same way we all used to believe in and obey Gods ).

[trickywoo]

Coke and hookers would be my guess.

Lost of people made silly money off the credit boom. You see it everywhere. Its why footballers etc get such stupid wages for one thing.

[off_again]

Most of it was paper money anyway....

I am sick and tired of hearing of 'property millionaires'.

You might own more than £1m worth of properties, but they are almost always hocked to the eyeballs and its utterly dependent on the market conditions. Oh look what happened? Property market dropped and now they are worth less.....

Unless you have the money in cold hard cash, its all pretty much meaningless given the current market.

[Darkslider]

quyen said:

Money does not disappear so who has profited?

As I understand fractional reserve banking a lot of it never existed in the first place. There's not a big vault of gold somewhere, in it's simplest form it's all just numbers that can be erased.

I might be very wrong and will await correction.

[Timmy35]

trickywoo said:

Coke and hookers would be my guess.

and we wasted the rest.

[LeoSayer]

To the sellers of houses which were bought at inflated prices?

[Einion Yrth]

off_again said:

Unless you have the money in cold hard cash, its all pretty much meaningless given the current market.

Cold hard cash is only of value by mutual agreement. What would you get for a Zim dollar bill these days?

[Podie]

http://news.bbc.co.uk/1/hi/business/7073131.stm

[off_again]

Einion Yrth said:

off_again said:

Unless you have the money in cold hard cash, its all pretty much meaningless given the current market.

Cold hard cash is only of value by mutual agreement. What would you get for a Zim dollar bill these days?

Good point there...

Given the fluctuating currency markets, even this is in doubt! I haven't the faintest where would be the best place to put any money to retain its value.

[Timmy35]

Einion Yrth said:

off_again said:

Unless you have the money in cold hard cash, its all pretty much meaningless given the current market.

Cold hard cash is only of value by mutual agreement. What would you get for a Zim dollar bill these days?

Ahem */ Goldenboy emulation mode on /

The only real money is gold and silver. Always has been, always will be. That and women/land.

• / mode off.

[RDMcG]

Easy..buy (say a 6 series BMW .or a Merc CL)..(I have done both.)

Write cheque

Sell car one year later.

Receive small cheque.

Value is just what people will pay for an asset. Money is just the counter of the value.

[SiH]

Einion Yrth said:

off_again said:

Unless you have the money in cold hard cash, its all pretty much meaningless given the current market.

Cold hard cash is only of value by mutual agreement. What would you get for a Zim dollar bill these days?

Well I paid £8 for a 50 billion Zim dollar note not so long ago. HTH

[Simpo Two]

Hence the concept of the Gold Standard.

[Wadeski]

its not so much money as value - if we agree (by purchasing) that something physical is worth £10 for a few years, everyone is happy to pay £10 for it. If something is "cheap" people will buy more of it until it becomes scarce, and therefore the price goes up.

trouble is, when enough people start saying "actually I will only pay £1 for that" then prices have to fall, or nobody buys it.

So the company that makes that product either has to drop prices, or start taking losses (since it still has to pay its creditors and overheads).

the same is pretty much true of financial institutions except everything is exaggerated, and happens in "real time" rather than over weeks.

[Swilly]

Its not money that is disappearing ... it is value !!

Added to that, debts being called in for which the purchaser never had the full amount in the first place, but only stumped up a margin of the full value.

[Timmy35]

Simpo Two said:

Hence the concept of the Gold Standard.

Abandoned by the Septics almost 35 years ago. Good idea wasn't it........after all who wouldn't trust a man like Nixon.

[mat205125]

off_again said:

Einion Yrth said:

off_again said:

Unless you have the money in cold hard cash, its all pretty much meaningless given the current market.

Cold hard cash is only of value by mutual agreement. What would you get for a Zim dollar bill these days?

Good point there...

Given the fluctuating currency markets, even this is in doubt! I haven't the faintest where would be the best place to put any money to retain its value.

Some kind of commodity. Pork bellies?

[BlueEyedBoy]

Has no one watched Die Hard 4?!

[cardigankid]

It goes on all the extravagant spending and expenses that help keep the bubble afloat. The trouble is that it is only a means of exchange and if all you are doing is consuming all your money is ultimately worth nothing. We have not reached that stage of the cycle yet but I don't think that its far off.

I agree that adherence to the Gold Standard would have avoided quite a bit of this trouble.