>>maybe you mean the crash of 29<<
I don't see how there is any difference, conceptually.
In fact, the easiest way for me to think about it is to think of one share of stock, or one block of stock. Mr. A buys stock XYZ at the IPO for $5. Later he sells it to Ms. B for $100. The stock then goes to $200, but Ms. B, unfortunately, holds on while the stock goes back to $5 and then sells it to Mr. C for $5.
Ms. B lost money on the deal, but do we say her $200 paper value was destroyed? Objectively speaking, her money didn't go to money heaven, she paid $100 to Mr. A, and the $200 never existed.
If all the Ms. B's decided to sell their shares of XYZ at $200, they could not have sold them for anything like $200. Total market cap is a fiction.
So when we multiply all the Ms. B's and all the companies in the broad market in a great crash, whatever the year, why should the result be any different? Wealth was not destroyed; it never actually existed.
It was something that people were counting on, as we say in English - doubt that the expression can be translated well. Don't count your chickens before they hatch. Until they hatch, they are just eggs. And a lot of smashed eggs don't equal any dead chickens. |
