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wonderpup

The World Has Never Been Richer.

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Nearly Everyone agrees that there is a vast amount of debt around at the moment- it's rarely out of the news.

But what is hardly ever pointed out is that fact that for all that debt to exist there must be an equally large amount of wealth on the other side- because if there is a debtor there must be a creditor- and one persons debt liability is another persons asset.

So if it's true that the world has never been so indebted it must be true that the world has never been richer.

That being so- why is there a problem?

Won't all those rich people who hold all the debt simply put that vast wealth to productive use and create the biggest economic expansion in history as all that capital flows into job producing products and services- thus allowing the wealth they hold to 'trickle down" to all?

Why are the Central Banks printing money like madmen when there is a vast mountain of wealth already out there in the form of debt?

In short- if the amount of wealth in the world = the amount of debt in the world- where is all that money and why is it not riding to the rescue of the global economy?

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Nearly Everyone agrees that there is a vast amount of debt around at the moment- it's rarely out of the news.

But what is hardly ever pointed out is that fact that for all that debt to exist there must be an equally large amount of wealth on the other side- because if there is a debtor there must be a creditor- and one persons debt liability is another persons asset.

So if it's true that the world has never been so indebted it must be true that the world has never been richer.

That being so- why is there a problem?

Won't all those rich people who hold all the debt simply put that vast wealth to productive use and create the biggest economic expansion in history as all that capital flows into job producing products and services- thus allowing the wealth they hold to 'trickle down" to all?

Why are the Central Banks printing money like madmen when there is a vast mountain of wealth already out there in the form of debt?

In short- if the amount of wealth in the world = the amount of debt in the world- where is all that money and why is it not riding to the rescue of the global economy?

I'm almost certain you're taking the piss?

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Nearly Everyone agrees that there is a vast amount of debt around at the moment- it's rarely out of the news.

But what is hardly ever pointed out is that fact that for all that debt to exist there must be an equally large amount of wealth on the other side- because if there is a debtor there must be a creditor- and one persons debt liability is another persons asset.

So if it's true that the world has never been so indebted it must be true that the world has never been richer.

That being so- why is there a problem?

Won't all those rich people who hold all the debt simply put that vast wealth to productive use and create the biggest economic expansion in history as all that capital flows into job producing products and services- thus allowing the wealth they hold to 'trickle down" to all?

Why are the Central Banks printing money like madmen when there is a vast mountain of wealth already out there in the form of debt?

In short- if the amount of wealth in the world = the amount of debt in the world- where is all that money and why is it not riding to the rescue of the global economy?

Look this is dangerous talk. Are you suggesting that the very tiny number of people gobbling up an increasing share of the wealth every year have stolen your future? This of course cannot be true as the reasons you are getting poorer every year are immigrants,baby boomers,benefit claimants and the EU. Now stop encouraging people to think and get back to blaming each other.

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Theoretically correct perhaps, except you have conveniently ignored the fact that the gap between the richest and the poorest has widened to unprecedented levels.

You have also ignored the role of interest, with which debt is created. This interest means that it isn't a simple zero sum game.

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How does this debt equal wealth with fractional reserve banking?

Genuinely interested.

It doesn't. The boom was based on inflating the nominal value of something that already existed, land. If the lending boom had been based upon the increasing production efficiency of high quality goods and reducing the cost for consumers, that would be a genuine creation of wealth.

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How does this debt equal wealth with fractional reserve banking?

Genuinely interested.

Fractional reserve is just the lubricant that allows the credit to flow- the lower the fraction the higher you can pile that debt and-best of all- the more wealth you have then brought into being!

The mystery is- where is that wealth hiding?

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Look this is dangerous talk. Are you suggesting that the very tiny number of people gobbling up an increasing share of the wealth every year have stolen your future? This of course cannot be true as the reasons you are getting poorer every year are immigrants,baby boomers,benefit claimants and the EU. Now stop encouraging people to think and get back to blaming each other.

:D What is impressive is how adroit those who hold that wealth seem to be at distracting us all from the rather obvious point that the amount of debt created must have brought into being an equal amount of wealth.

It's really strange that the media can obsess endlessly about debt while never seeming to discuss to whom all this debt is owed- and what they are doing with that wealth.

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Theoretically correct perhaps, except you have conveniently ignored the fact that the gap between the richest and the poorest has widened to unprecedented levels.

I haven't ignored it- in fact I suspect it may be the problem- I'm just pointing out that there is this strange lack of curiosity in the media and amongst the population as to who holds all those IOU's we have created- and what they are doing with that wealth.

You have also ignored the role of interest, with which debt is created. This interest means that it isn't a simple zero sum game.

Ah but is a zero sum game- if by that you mean that debt and wealth are a mirror image of each other.

If you lend me money with interest then the amount I owe you is the original sum plus that interest- and your wealth is my debt+ interest owed to you.

How could it be otherwise- after all a debt implies a creditor and cannot exist without one. All debts represent some other persons assets.

Of course things are much worse in a way since with derivatives that debt itself can be leveraged to create even more debt- I can take your mortgage and from it create a security and then I can take that security and bundle it with other such securities and create another security- which may sound improbable but was in fact done in the past.

So there is almost no limit to the amount of wealth the bankers can create- with a bit of off balance sheet magic and a touch of rehypothacation thrown in - which means that the world has never been richer than it is today.

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He's not for real, can't be. Its been very transparent lately. Nice to have a hobby I suppose.

Your hobby seems to be stalking me at the moment.

Can I suggest that you start a thread called 'wonderpup is a moron' where you can indulge yourself without feeling the need to post content free replies on every thread I post on.

Or you could actually address the issues I raise? I would be interested to hear your views.

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Nearly Everyone agrees that there is a vast amount of debt around at the moment- it's rarely out of the news.

But what is hardly ever pointed out is that fact that for all that debt to exist there must be an equally large amount of wealth on the other side- because if there is a debtor there must be a creditor- and one persons debt liability is another persons asset.

So if it's true that the world has never been so indebted it must be true that the world has never been richer.

That being so- why is there a problem?

Won't all those rich people who hold all the debt simply put that vast wealth to productive use and create the biggest economic expansion in history as all that capital flows into job producing products and services- thus allowing the wealth they hold to 'trickle down" to all?

Why are the Central Banks printing money like madmen when there is a vast mountain of wealth already out there in the form of debt?

In short- if the amount of wealth in the world = the amount of debt in the world- where is all that money and why is it not riding to the rescue of the global economy?

They did this during the American depression - sat on Trillions to create Global Monopolies and kill off their smaller competition (note how they are pushing for the devil's GM seed monopoly)

Ford, Kellogs and other Global big names

- who have morphed the company name since the 30's due to buyouts.

USA and European Big Business are sitting on Trillians in cash

- whilst their smaller competitors go to the wall

(now you realise the conspiracy with the Govts/bankers - they wont lend to keep small/medium alive or let them expand either! :P

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The mystery is- where is that wealth hiding?

Easy, it's hiding in the future. It hasn't been created yet. Trouble is we've already spent it.

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The global economy doesn't need rescuing; the 'advanced' economies do.

world-GDP-growth-graph.gif

+ 1

And even advanced economies had over 2% average growth since 2009.

It's Britain that is truly fecked.

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Fractional reserve is just the lubricant that allows the credit to flow- the lower the fraction the higher you can pile that debt and-best of all- the more wealth you have then brought into being!

The mystery is- where is that wealth hiding?

OK, now I'm certain.

Credit and wealth are not the same thing. Mugabe had the same idea as you and found out the hard way.

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Where is the wealth hiding.

Thats easy.

Its hiding on balance sheets in various entitiies.

Not heard of Mark to Model?.....you buy a MBS at 100 and a year later you say its worth 99, having been paid back 2...profit 1.

now there is 101 bits of wealth on your balance sheet.

all on paper...Now, lets suppose everyone who holds an MBS like yours wishes to sell...as they did in 2007....suddenly, you cant get 99 for your MBS...you can only get 30.

so what do you do....you hang on to it and get the auditors and later the regulators to allow you to value it at 99...maybe take a haircut and call it 98.

Whatever happens, you are not allowed to become insolvent... what you have now is a "liquidity crisis" in that you cant sell up your asset to pay your bills....then you have a bailout....then you have the CBs buying up your MBS.

Eventually, the wealth you lost will be flushed.

thats where its hiding....nowhere.

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OK, now I'm certain.

Credit and wealth are not the same thing. Mugabe had the same idea as you and found out the hard way.

I don't think wonderpub meant 'wealth' in the literal sense, which has long been gambled away.

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Wealth is just a legal claim on an income stream. It exists only as long borrowers are able to service their debts and disappears the minute they cannot.

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Wealth is just a legal claim on an income stream. It exists only as long borrowers are able to service their debts and disappears the minute they cannot.

Agree.....so why do they keep lending money to those knowing full well they can't service the debt let alone pay any of it back.....playing for time? :unsure:

Unless of course they intentionally halve the value of it...no winners in that scenario.

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I could believe that the world has never managed to misjudge money as badly as it currently does. Since in reality it's a ridiculous concept anyway (trying to assign a common measure of wealth to such a vast range of completely different things) it's no surprise that a complete mess is made every now and then.

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Debt and wealth are pretty meaningless numbers. Did all those 'dot com millionaires' really disappear overnight, or did they actually exist in the first place?

Once everyone tries to realize their wealth, liquidate it and turn it into cash it becomes apparent it never existed.

Govt should never try and support wealth or house prices. They should target purchasing power vs employment and nothing else.

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  • 242 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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