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The mysterious case of the vanishing money
Comments
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This is a rather perverse question.
Hamish seems to suggest that the money goes into the economy, through banks, taxes etc. The money isn't removed.
So why the need for hundreds of billions of pounds of rescue money after the biggest boom (and therefore massive revenue)?0 -
So why the need for hundreds of billions of pounds of rescue money after the biggest boom (and therefore massive revenue)?
Because globally banks and financial institutions wrote off billions of pounds of assets from their balance sheets.0 -
HAMISH_MCTAVISH wrote: »I see.
And where do you think "banks" borrow most of their money from these days?
The magic money fairy? Or perhaps from savers.....
So interest payments benefit savers. And of course the bank makes a margin.
Oh, and while we're on the subject, where do you think that bank margin goes? I don't suppose the vast majority of it ends up in salaries for employees (who then spend it in the "wider economy"), purchase of goods and services (from the "wider economy"), dividends to shareholders (such as our pension funds who fund our retirement spending in the "wider economy"), tax contributions (gosh, d'you think that might contribute to housing benefit payments??), etc....
Because if that were the case, you really wouldn't have a leg to stand on.:cool:
Sorry Hamish, not sure who you're arguing with.
But it can't be me.HAMISH_MCTAVISH wrote: »Ah, I see. So more lending actually creates more money....
Rather than taking money out of the economy.....
Good to know.;)
Ah so Inflation is good eh?
Asset bubbles work out well do they?
The banking system is not the economy.
Excess money in the banking system is not neccesarily a good thing for the economy.
I beleive this is a case already proven.0 -
HAMISH_MCTAVISH wrote: »Oh I'm not overlooking it at all.....
We're just taking baby steps down 'Reality Road' with a few of our posters...
The fun bit will come later when we start discussing what actually "takes money out of the economy".
Ah, so you didn't just forget about it eh. :rotfl:
The fun bit will be you actually demonstrating that this is a "bear meme".
As previously noted. 0 -
Hamish, if you are on a drive to promote accuracy in the phrases used on this forum, perhaps you could undertake to stop referring to "mortgage rationing". If so, I will undertake never to say that money spent on housing is taken out of the economy. (I don't think I have ever done so, but that's the best I can offer.)Do you know anyone who's bereaved? Point them to https://www.AtaLoss.org which does for bereavement support what MSE does for financial services, providing links to support organisations relevant to the circumstances of the loss & the local area. (Link permitted by forum team)
Tyre performance in the wet deteriorates rapidly below about 3mm tread - change yours when they get dangerous, not just when they are nearly illegal (1.6mm).
Oh, and wear your seatbelt. My kids are only alive because they were wearing theirs when somebody else was driving in wet weather with worn tyres.
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Hamish, if you are on a drive to promote accuracy in the phrases used on this forum, perhaps you could undertake to stop referring to "mortgage rationing". If so, I will undertake never to say that money spent on housing is taken out of the economy. (I don't think I have ever done so, but that's the best I can offer.)
Rationing is defined as:
"The controlled distribution of scarce resources, goods, or services."
Mortgage Rationing is a completely accurate term.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
McTittish fails to recognise that houses are not THE economy.
If he can't get over that "meme" there is no point "arguing" with him.
He is a very silly boy."The problem with quotes on the internet is that you never know whether they are genuine or not" -
Albert Einstein0 -
houses are not THE economy.
.
No, but in most developed nations the housing market and associated goods/services account for between 12% and 18% of GDP.
A critical industry, on a par with manufacturing and financial services in size and importance to the economy.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
If you ever start thinking about what the circulation of money actually means in practice, you'll end up with a headache in your eyebrows. It's like watching Brian Cox explain the universe but without the eye candy
I agree with the first sentence.
Mr Cox's (TV) explanations of the universe are quite simple, it's the stuff that he and his colleagues discuss "off camera" that would cause brain malfunction (+ headache).30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
HAMISH_MCTAVISH wrote: »No, but in most developed nations the housing market and associated goods/services account for between 12% and 18% of GDP.
A critical industry, on a par with manufacturing and financial services in size and importance to the economy.
Associated goods and services being what exactly? And what proportion of the 12-18% do they take up?0
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