"The reality is a lot of wealth have been destroyed, gone, disappeared…"
Uh, no well, that's sort of just WRONG. The "money" is not destroyed it is just transfered to someone else. Warren Buffett is in agreement with me or more correctly put, he expresses the same theory.
But what you may be confusing is what is called the "Velocity Theory of Money" first promulgated by Milton Freidman; and, incidentally where our terms M-1, M-2 etc come from.
If the velocity slows way down for a number of significant reasons, then the money supply collapses and we have sort of what you call a destruction of money.
IF the money is transferred to less productive hands, it is sort of taken out of circulation, at least by the recipient.
IF the money as you call it had been "destroyed" we would be witnessing rampant deflation. Trust me on this one, we are not. M-1, M-2 etc are through the roof. We have rampant INFLATION. That is why, incidently, no matter how many press releases the Politicians issue, the value of the dollar keeps dropping. One dollar becomes less and less valuable, that is inflation. |
