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Pastimes : Where to hide your money as the world banking system collaps -- Ignore unavailable to you. Want to Upgrade?

To: Michael H who wrote (37)	2/2/2001 7:06:16 PM
From: TobagoJack	Respond to of 41

<<If you bought a house for $100,000, you would say: "I own a house", not "I own 100,000 in houses". The seller of the would now own your $100,000, while you would own the house.>> I would more likely say I own a house that was, ought to still be worth 100k, and hopely will be above 100k later, but alas, the actions of the central bank was such that now, less mortgage, it is worth a negative value. The house, like MSFT shares, is but another asset, just as the $100k cash is. When the house value went down, following MSFT, and the M1-M3 stayed constant, the aggregate value of all houses and all MSFT shares, including that held by Bill Gate (not for trading) declined, the declining portion disappeared, the remainder able to support that much less debt, and thus shrinking the effective wealth, the maestro's actions not with standing. M1-M3 is but money supply. M1-M3, house, MSFT is economic value. So in the sense that you defined money, you are right, the money is not lost, just that, at the same time, the aggregate turnover of the economy turns over not. Money, like a river of water, sometimes flows, sometimes stored, damed, damned, overflows, and sometimes simply evaporates. If it were not so, than the maestro has nothing to worry about, as nothing is ever lost as long as he chooses to make up the difference. This, of course, is exactly the maestro believes. He will be brought to his knees, humbled, humiliated, and than called before the Congressional hearings to explain the inexplicable by saying ... what? "Well, remember back a while ago I said we will not know if we are in a bubble until it bursts. I just heard the pop noise."

To: Michael H who wrote (37)	2/2/2001 9:29:48 PM
From: David W. Taylor	Read Replies (1) \| Respond to of 41

Let me this again. I do agree that the original seller has $100 and there is still a share of MSFT in the world. All the other shares that were worth $100 are now worth $60. Some of those shares were bought at $40 went to $100 in value and are now $60. The "loss" of $40 from the high of $100 has vanished. There is now a potential profit of only $20. Bottom Line: the market cap of companies swells and shrinks at the whim of investors. In effect, when the last price of a share is higher, inflation has happened.