O.T.--But concerns everyone

Money is never LOST--it's TRANSFERRED! Where is OUR money going? Economic problems are influnced by stock selling, where does the money go from the sellings? Are people storing money at home?

I assume you're talking about the stock market. While it is true money is never lost, YOUR STOCK ISN'T MONEY!!! It's only paper, that at any given time, can be traded for money at its then-current "value". If you bought ABC Corp. at $50 per share, and now sell it at $10, I guess you could say you "lost" $40 (to the guy you bought from) when you bought it. If you bought at 50 and sold at $60, you "made" 10 bucks off the guy you sold it to- but who knows how much he will eventually sell for? The plain truth is, the stock never did have any intrinsic value, like a chicken or a shovel- it was just part of a big gambling program called the stock market.

Depends on what exactly you are calling "lost?"

Money loses value in regard to what can be bought with it. I'm finding many things costing three times more now than they did just a year or two ago. So, from that perspective I certainly did lose money.

Money also gets "lost" to our country when it gets stuck and/or invested overseas.

Money is also "lost" to the individual when stock values crash and the stocks are sold instead of held - or held and the stock goes to zero and disappears.

In regard to hoarding cash - yes - I know many people that have taken $10,000 - $30,000 cash and are keeping it home in fear banks won't release it if needed. It's happened before.

If there was a total world-wide economic crash, real goods might become more valuable than currency that only has theoretical value and no intrinsic value. That would be a loss to money holders and a gain to owners of hard goods.

You have to be careful in the way you think about money and value.
We bought our house for 90K, which was already inflated; a "real" price would've been around 70-75K, and its "market value" went up to 370K or so--but that wasn't real value or real money, 'cuz if we'd sold we'd have to pay comparable prices for another house. The only "real" money would've been any we had left from buying a smaller replacement house.
Now our "market value" is dropping, but because personal and medical reasons precluded selling and moving to a cheaper area , and we decided immediate downsizing (selling, buying, moving) was more effort than it was worth, we don't feel we've "lost" anything.

If you bought a house in the 1980's for $100,000, someone will tell you it is worth $210,000 in 2007. That money majically appeared.

In late 2008 now, someone will tell you that same house is worth $120,000.

Somewhere along the way, you made $20,000 - the house is valued that much more now than when you bought it. BUT, if you tried to take out a loan in 2005 or so and spend the $110,000 you might think you lost $$80,000, and now you are short on money!

In fact, the whole time, you didn't have any cash at all - you had a house.

Stocks work kinda the same way.

None of this is cash, but we try to convert it to cash at different times. This makes money 'appear' and 'disappear' at different times.

--->Paul

Kind of reminds me of my $10,000 dollar dog. Well, I didn't really pay $10,000 for him but I did trade two $5,000 cats for him.(;>))

Lost? Suppose that you own an acre of rural land. Suppose that last year it would have sold for $5000.00. But this year, the going price has dropped to $3000.00 due to fewer people looking for a building site. You were not interested in selling your land last year. Last year you owned an acre of land. This year you own the same acre of land. You still have the same land. Nobody stole $2000.00 from you. The value of your land decreased from last year to this. The value might change again next year.

In the olden days before they got rid of the gold and silver certificates (money) you could exchange your dollars for that amount of gold or silver in those days these had a very stable worth.
In today's world we use a different system and money is backed up by what the buyers an sellers think that it is worth in exchange for an hours labor.
So we have inflation or deflation of the dollars worth depending on what it will trade for on the open market.
One day you can buy a Toyota for $22,000 the next it will sell for $23,000 or $ 21,000 it all depends on the money market.
Stocks are dependent on this also and they are also dependent on how good the company is. A company in need of a bailout has a low worth for its stocks. A company that is selling at a profit and paying dividends will have a higher worth for their stocks. All this is very hard to follow unless one really follows the way we calculate our worth.
A house in 1900 is worth the same amount in 2008 if you adjust it to inflation. If you come out higher then you made money if lower then you lost money.
Now take the same thing an put it towards a business like GM or Ford and you will see why things go up and down.
Its really hard to put all of this in a short note it takes many books and lots of studying the economics of the world.
Now I'm by far no expert on this but I do try to learn as much as I can and having an IQ in the Genius range really helps. Although sometimes its more of a nuisance than a blessing. Believe me being a genius is not what its all cracked up to be. Did you no that the average income of Mensa members is lower than the average.
Walt
PS I hope some of you understand what I am trying to says its a bit complicated I know.

I kinda wonder about the thought process of taking thousands of dollars out of the bank in cash and storing it in the matress. If things get so bad that your FDIC insured bank account disappears, then that cash in the matress is just going to be fancy fire starting kindling. Just pretty paper.

Gold, Silver, Land, Cattle, and IH tractors, now there are some safe havens for your money.


Gene

This thread reminds me of the response I used to give to my city friedns who said I as a cattle farmer got my "beef for free"

I says, okay, lets suppose the calf was born on my farm from an old cow I had for years and the corn was raised on my farm which I used to fatten the calf......One day I take it to the butcher shop to get that "free beef" .......I SAY ON THAT DAY I HAD A CHOICE put the beef in my freezer ORRRRRRRRR sell it to the butcher for $500

I figure that "free beef" cost me $500 cuz I dont have the $500 I could have had from the butcher right???????? It was EITHER $500 or the beef and since I dont have the $500 how was that "free beef" ???????????????

Of course this is sort of tongue in cheek and we didnt get into the cost of my raising the corn and the land and the mother cow etc etc but it looks like EVEN IF THAT FAT CALF WAS GIVEN TO ME I still made the choice of it versus the $500 I could have had, soooooo was it free beef lol lol I kinda figure if a stranger offers me a calf or the $500 WHICHEVER I take its free right???

yall take care now

John T (wheres the beef)

(quoted from post at 14:04:18 11/21/08) I kinda wonder about the thought process of taking thousands of dollars out of the bank in cash and storing it in the matress. If things get so bad that your FDIC insured bank account disappears, then that cash in the matress is just going to be fancy fire starting kindling. Just pretty paper.

Gold, Silver, Land, Cattle, and IH tractors, now there are some safe havens for your money.


Gene

Click to expand...

I agree with the last 3. (You can't eat gold or silver.) With land, you can grow crops to eat/trade. You can raise the cattle into a herd to eat/trade. The tractor helps you do the other 2 more efficiently. As other posters said, money is just a way to measure YOUR labor to raise the crops/cattle. All we can really trade in this world is our labor to produce goods for our own use or for others.

Think of it this way: If the world was in chaos, what would be more valuable? Your basement full of potatoes, beef jerky and canned fruit or a gold necklace? I think then you wouldn't even THINK of trading the food for the necklace. Remember, salt used to be like gold, but it had intrinsic value as a preservative.

Money is a commodity now like everything else. There is no gold or silver baking it and it has no mystical or other intrinsic worth. So when the price of things go down, and that's a bad thing, money becomes more valuable but only in comparison to the things you might have bought with it.

If you hold on to the money and the price of things goes down your money is worth more even though you have the same amount of money. If you hold on to money while the price of things goes up, it's worth less.

Yes, partially but not all true. Banks could be ordered to restrict amounts on withdrawls and that HAS happened in the past. Your money can be safe in theory, but if you can't get it when you need it, it doesn't do you much good.

Sticking money under your mattress could indeed help in a pinch.

If all banks were ordered tomorrow to temporarily halt or limit withdrawls, and you also couldn't cash your paycheck, retirement check, etc. - having some cash certainly could help. These things happened during the last big depression. Some of my older relatives were auto workers in Michigan at the time - and they had to either get cash from special banks setup by the auto companies - or cross the border and get cash from Canadian banks.

if you dont make anything you can"t sell anything. if you import all consumed goods cars textile ect.where do you think the money is going?Paul

Exactly. It's money that never existed. People just thought they had it because it said so on a statement.

Stocks are like collectables, they are only woirth what someone wants to pay for them.

Also you have not lost any money unless you sell the stock for less than you paid for it. Anything above that is just lost profit potential.

In actual hard currency, there isn"t a lot of "money." Our economic system uses the multiplier effect. That presumes that a portion of the wealth you have in the bank can be loaned to another person who in turn will keep some in the bank and again loaned to another person. So, if the bank reserve amount, that portion that can"t be loaned is twenty percent, 32 K of your 40 K can be loaned and $25,600 loaned again and $20,480 loaned again ad infinitum. So, right here we have your original $40,000 generating another $78,080 in pseudo money.

If you want to find out how much "cash" there is, do a search for M1.

Bob

Take a look at the following link concerning currency.

<a href="http://en.wikipedia.org/wiki/M1_(economics)#United_States">Money Supply</a>

Take a look at the following link concerning "lost" money.

<a href="http://en.wikipedia.org/wiki/D._B._Cooper">Lost Money</a>

Another example of "lost" money is AIG Corporate Executives lighting Cuban cigars with $100 bills at their party celebrating the news of their bailout.

Tractor related "lost" money is a $5 dollar bill working its way out of your overalls and getting shredded by the finishing mower.

Jiles: Deflation is a worderful tool. Since most of our taxes are now a percentage. Just think about it, with deflation we can starve those political and bureaucratic bozos to death.

We've spent years wanting more and more money for everything we do, and each time we did it those buggers got a raise. I've been saying for decades do it for less and we can price those excutives out of existance.

While $5 bill being shredded by finishing mower seems possible, I'm thinking that its more like a quarter falling out, hitting the blade and dulling it, then bending the crankshaft necessitating a $300 repair. This is more in line with Murphy's Law as we know it.

YES I AM STORING AT HOME! Im so worried that the world is going to end, Ive been storing all my money in a glass jar in the backyard, along with the truncks on ammo surplus from OIF, and all the MREs I can find are in a bunker I dug. Got to get ready fot the second Civil War everyone seems to think is coming.