Comments on: This Isn’t a Recession

By: Pete

Pete — Sat, 14 Mar 2009 08:33:04 +0000

Tino: In response to "The 'lost' money must be somewhere"

Correct me if I am wrong please, but I believe money can be lost, especially due to fractional reserve banking. If the banks get afraid to lend to people, won't that generally cause the total money in fractional reserves to be less? Especially if they want to increase their ratio of deposits to lending, without relying on many new deposits - all they have to do is lend less.
(I realise that its not quite that simple for banks to get themselves out of this mess)

Basically what I am suggesting is that if money can be expanded upon using fractional reserve banking, then surely it can contract aswell.

By: Greg Atkinson

Greg Atkinson — Sat, 14 Mar 2009 00:57:34 +0000

Tino, it is a bit like that comment by Gordon Gekko in the movie Wall Street "Money itself isn't lost or made, it's simply transferred from one perception to another." Big winners will emerge from this crisis. At some point the timing will be just right for people to move in and snap up cheap assets.

BTW if Spain is doing it tough I wonder how those over-the-top developments are doing in Dubai?

By: Tino Schlegel

Tino Schlegel — Fri, 13 Mar 2009 10:44:36 +0000

Not everyone looses money. The 'lost' money must be somewhere - maybe it was burnt or the promised money wasn't printed.
Anyway, the growth of the last years cannot get faster and faster.

Btw: Saw this nice documentary about the newly built ghost city in Spain last night. Some greedy people invested in this city to rent or sell those overpriced houses and no one wants to live there now. Well done investors. Will it get less greedy in the future? I don't think so!