Wealth Destruction 1

How bubbles destroy wealth.

Category:

Education

Tags:

• bailout
• paulson
• credit
• crisis
• bernanke
• bubble
• housing

[mark7996]

basically money is just an idea. the market value of a house at any particular point in time is a sentiment for that particular asset. sentiments vary as people look to other outside indicators ie: stock market, geopolitical issues, environmental issues even, etc...yes there is no 'wealth' now, but time was the main factor. the wealth was not 'illusionary', rather, that's not the best word for it....since if you sold at the right time, wealth would be present.

[knowledgeaboveall]

What bothers me is the printing of money with no true value. The fact is this has been going on since before Kennedy. The world bank can completely dissolve our nation and others by us buying into the ideology that we can lean on false currency which is all determined World Bank standards. This makes a nation of slaves eating from the hand of some shadowy figure behind a desk somewhere. But then again everyone is afraid because no one knows whatelse 2 do.

[DaveJLin]

Regarding the first house selling for $1M ... He originally paid $100K for it, paid $20K up front, and owes the bank $80K. So, after all the dust settles, he should profit overall only $900K at most ($1M gained, $100K spent), if we disregard interest, fees, taxes, etc. So, after paying back the bank the $80K loan, he keeps $920K from the sale, where $20K of that was his original down payment. So, he is net $900K richer than before, and he goes to Costa Rica with $920K, not $940K.

[Ksblue]

@knowledgeaboveall Actually printing money just redistributes wealth. The new money does have true value as the new money becomes a vehicle for redistributing wealth.

[TallFastLoud]

@ramrants wait...so you are against the New Deal but for a /more/ progressive tax structure? how do you reconcile those two things? oh, and how they made it? slave labor, for one thing...

[TallFastLoud]

@knowledgeaboveall this is a fallacy. gold has no intrinsic true value either -- the only reason it's rising right now is psychological -- people /perceive/ it to be intrinsically valuable. but really, it's a mostly worthless, if attractive, metal. money is a social construct; it's an accounting tool, not a commodity. and what's all this about the world bank? the Fed determines our money supply, dude

[heyathere1000]

money huh?

[dold1tflkin]

@namewasavailable It's a book , written by Silvio Gesell - THE NATURAL ECONOMIC ORDER.

It refers to Interest as an unnecessary evil, and proposes another way.

[Mechness]

@ramrants I think you need to study your history more closely.

[ramrants]

@Mechness yes, implementing a centralized economy does require a change in human nature. This is why centralized economies are implemented through force. The USSR, China, Cuba are just a few examples of how wonderful that system is. Everyone is poor or dead.

[ramrants]

@Mechness are you aware that this country did not have a personal income tax until the 20th century. And when personal income tax was passed, it was the top 1% who paid 10% of their income. It wasn't until the 30's (thanks FDR and your big government programs) did all Americans have to start paying a personal income tax. How did this country make it to the 1930's with no income tax?

[ramrants]

@Mechness this is wrong on so, so, so many levels. First, those with capital increase their wealth as well as those providing the labor. Those providing the labor don't work for free - they are paid with capital.

Socialism does guarantee a standard of living - it guarantee's everyone is poor.

Wealth does not pass up, it passes down. Those at the "base of the pyramid' have the least amount of wealth, with little disposable income.  There is little/nothing to pass up.

Get a clue.