Money can't be destroyed.

[.... callchet ....]

Money is just like matter

You can't destroy matter. Economics is like a football game. You get the ball and take it to the other end, then the other team gets it and brings

it back. The ball is like money. Everything is fine until the rich guy comes and takes the ball off the field and puts it in his safe.


No matter how many nuances are used to make it more complicated than that, now matter how much people want to exercise and display their grasp of

complicated issues, it is just simply a matter of who has the money. If you try to make it more complicated, you are just trying to validate your

point, degree or job.


And who has the money now is not going to help the situation because they don't see anything wrong with the situation.

[Warpy]

1. Money can be easily destroyed. It was in 1929 and it is now

Wealth is infrastructure and it's a little harder to destroy. The GOP always neglects infrastructure in favor of money. When the money evaporates into thin air as the scam collapses, we're left with infrastructure desperately in need of repair, but it's still mostly there.

However, your analogy with a ball is apt. Money only works when it's moving. Rich men hoard it. Poor men spend it. Rich men create nothing. Poor men create demand for infrastructure as well as the means to satisfy it, and infrastructure is wealth. If money is the ball, then the field and equipment are the infrastructure.

[.... callchet ....]

4. I tend to

believe that it is still on the books. The money from twenty nine went someplace. I think the accounting would still balance out after the crash.

Like matter, money can't be created either. We can print more and devalue it, but the accounting will still represent some relative figure.

[Warpy]

6. Money can't be created if it's tied to a fixed commodity, like gold,

although the number assigned to goods and services can inflate. Fiat currency can be created and destroyed.

As for the money on the books after 1929, there wasn't any of it. The numbers had been inflated by debt (buying stocks on margin) and when the scam fell apart, the numbers deflated. The money evaporated into the thin air it always really was.

So it is now. Much of the fabulous money of the ultra rich has evaporated into thin air now that the debt is starting to be subtracted out and will continue to do so for at least the next year and a half. Two years ago it could have been exchanged for goods or services. Now it's simply gone.

Since you're fond of sports analogies, you can think of money today as the football that's lost air. Oh, it's still there and you can still Frisbee it down the field, but it's going to take a lot more effort to move it and make it do the work it once did.

[Make7]

17. Was there money before people existed?

 

callchet wrote:
"...money can't be created either."

Was there some Economic Big Bang at the beginning of the universe that created all the money?

Make7

[sendero]

19. The problem is..

... things like "home equity" and "stockmarket equity" are considered money, and they have just evaporated big time.

The net effect is the exact same as if money were burned, i.e. deflation.

And it's here.

[Make7]

2. Can money be created? ( n/t )

[Greyhound]

21. There's the hole in this "theory". n/t

[TomClash]

3. Not true

Money is a store of value. When the value drops, the store is empty and the money is gone.

[.... callchet ....]

5. Isn't gone

has gone someplace else. Demand is gone. After the twenty nine crash, there were a lot of owners of empty stores that got bought real cheap.

[.... callchet ....]

7. It has gone to

China and the Mid-east. Beside the debt there are the interest payments.

[FirstLight]

8. we have been playing with "monopoly money"

That's the problem with your premise...you assume that all the money you are talking about is "real"

the entire issue, you, and so many of us, have been tricked into thinking that any of the money we exchange is "REAL"
It's all numbes in a computer, unplug the mainframe or reprogram values, and the system either crashes or changes

WE have to decide how we are going to assign "worth" to the things we make, the food we grow, what we 'want' and how bad we want it

what's even more important in the long run, what's MOST valuable
will be the help we give to eachother...

getting back to basics, man...

[Citizen Number 9]

9. Isn't much of the bailout

just re-creating money that has, in fact, been "destroyed"?

[.... callchet ....]

10. you can't destroy money.

if a stock loses all demand and has a selling price of .01 it is still on the books someplace for what it last sold for. The bailout in one sense is

adding realtime value to the prospective of the failed mortgages that were traded on a future value. The mortgages were sold looking to the maturity.

That was an inflated value. A $100,000 mortgage was sold leveraged by the future value at maturity. That is why I said trading should stop after

the initial investiture. If you buy stocks and hold them because they will always be worth more in the long term, then you are subscribing to fiat

money, creating value, and undermining initiative.

[Citizen Number 9]

11. I think mortgages were sold based on the income stream

they could provide.

From an investor's point of view, the worst thing about investing in mortgages is that the homeowner has the right to pay off at any time, depriving you of the income stream.

At some point, most investors have to realize the diminished value of their assets. If you are an institutional investor you are hard pressed to ignore it for more than a year.

[.... callchet ....]

14. Reality

"is that the homeowner has the right to pay off at any time" see, here is where I go one step further in reality that the statistical risk models

don't account for. They can default. It may not be a right, but it is an option. The models use this as an influence but not a result. If they

used it as a result it would be like dividing by zero and the equation would not work. No loans. A computer can calculate the risk factor of

Russian roulette. If you ask it if you can play it will say no. I think you and the majority base most of your reasoning on what people are supposed

to do, not what they are capable of doing. For example just say no to drugs and whatever.

[Odin2005]

12. Wrong, In fiat currency monetary systems money is created and destroyed all the time.

your post only makes sense in reference to commodity-based money, which is what we had back when we were on the gold standard. That commodity money cannot be created or destroyed is actually it's major flaw. If your country is on the gold standard economic growth is limited by how much new gold your country's gold mines can put into circulation. And if population grows faster then the money supply can keep up you can get crippling deflation (that why the Populists in the 1890s were against the Gold Standard). like-wise, a sudden glut of precious metals will cause hyperinflation. With fiat currencies the money supply can be managed so as to prevent too much inflation during economic booms and to prevent deflation during economic slumps. Before the Fed was created the US had deflationary banking panics every 20 years like clockwork.

Conspiracy theories are not an adequate replacement for a proper understanding of economics.

[.... callchet ....]

15. You are

talking about credit and inflation. The perception of having more money. If every company thinks they are going to make a lt of money, there is not

that much money out there. But there is the perception of that much money. Every graduate thinks he is going to make it. There is not that much

money out there. And there is a flaw in the conversation. It is the changing concept and identity of money versus value.

[Art_from_Ark]

22. "a sudden glut of precious metals will cause hyperinflation"

Are you sure about that? Did the sudden glut of gold from California starting in 1848 cause hyperinflation among the general population (outside of the mining camps, that is)? Did the sudden glut of silver from the Comstock Lode a decade later cause hyperinflation outside of the mining areas? Did the Yukon and Alaskan gold rushes cause hyperinflation in the general economy?

[.... callchet ....]

23. Seriously ? Referring to reply 12

"gold standard economic growth is limited by how much new gold " If you are on the gold standard, your economy is not limited by how much gold you have. As the economy grows each each gold piece buys more. The economy is not limited by how much gold there is. There are just as many pros as cons for that statement. "Conspiracy theories are not an adequate replacement for a proper understanding of economics". Do you mean your economics? I don't get that at all. The only conspiracy was to go off the gold standard so that inflation could undermine the minimum wage. If you have all the money, it doesn't male any difference what it is worth. If you are on the bottom end, you get to buy less and less of rice and beans and Ramen Noodles and spam. That is the only conspiracy.

[Joe the Liberal]

13. True.........

Money can't be destroyed but it can be controlled and whomever has control of the money is what matters. Good point, read my sig.

[.... callchet ....]

16. And what a reality

"financiers are without patriotism and without decency"

[jody]

18. When money has no value it is de-facto destroyed. n/t

[jimlup]

20. Anytime someone defaults on a debt money is destroyed

This post shows a lack of education about what money actually is.