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Tuesday, July 27, 2010

Where has all the money gone? Sag mir, wo die Kohle ist, wo ist sie geblieben ?

The money is the aggregate sum of all of the savings of all people worldwide: now consider this, most people in the world are heavy savers, they save much more than Americans and somewhat more than Europeans, the money is saved because most people worldwide are much "poorer" than Americans and feel "insecure", so they save knowing that they are a hickup away from starving, from layoffs, from large expenses for health care, for their future pensions if they reach the age, etc.

Now those countries also have large populations, like India, Indonesia, Brazil, Russia, Eastern Europe, India, JAPAN, South Korea, etc.

So that aggregate amount of money ends up being somewhere around 80 trillion dollars. Now the banks, all of them worldwide just add this cash all together, slice and dice it amongst themselves, play the stock market poker with it, do all kinds of creative things with it and occasionally put some money in "productive endeavors" (factories and "building" real estate). So this money needs a "return on investment", and the best return is to grab some more from the poorer people who are "forced" to buy a home, pay large mortgages and large interests to the banks.

And when nothing else works, they just print more money like the FED or simply write big numbers on computer screens and make the money pop into existence.
Tucsonspur

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