Where has all the money gone during the credit crunch to leave everyone so much in debt?

Ok – we are now in the middle of this credit crunch and companies, banks etc have all lost money and are going to the wall but where has all this money gone?? It can’t just have vanished.

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8 Responses to “Where has all the money gone during the credit crunch to leave everyone so much in debt?”

  1. The Blue Shadow said:

    There was no money, the numbers people were playing with on the stock exchanges didn’t add up at the end of business.

  2. noitall Yorkshire England (U.K.) said:

    That is exactly the point the money never existed in the first place, people were, and still are, up to their necks in debt, buying things they did not need, with money they did not have, and could not repay.

  3. andy said:

    What happened is that banks instead of lending say $6 per 1$ they take in, they were loaning $12 per 1$ that they were taking in. This is what is causing the credit crunch. We have too many people with too much outstanding debt that they can not pay. You have to remember that most credit cards, mortgages, and loans are paper money not hard greenbacks. When a bank writes off a debt that is getting rid of paper money off of their books. In reality, since the money is paper it does just vanish. A good example for this is a house that loses value. The house did not change but the perceived value of the house changed.

  4. Creative Covering Solutions said:

    Money is debt…..debt is money. That pretty much sums it up. A lot of people don’t really know how our banking system works. Lets say you take a loan out for a car. Lets say it’s $50,000 The bank that deposits that is only liable for 10% of that ($5,000). So the rest ($45.000) the bank can use to make loans………In doing this they are creating fake money. Watch this it will tell you more about it.
    http://www.youtube.com/watch?v=wTyZ0Z9xb_A&feature=channel_page

  5. Lily B Talus said:

    It wasn’t there in the first place

  6. Tertia said:

    Everyone who? The banks? They gambled with money that they didn’t have – that they had borrowed off other banks, against assets that were not worth the paper they were written on.

  7. Michael L said:

    Money isn’t being lent because our government keeps changing the rules.

    I would never lend you $1000 if in 4 weeks you came back and told me that you can’t afford to pay me back so all you will give me is $300 and the government and the courts back you up.

    The government is now toying with the idea of allowing bankruptcy judges rewrite the terms of mortgage loans. Great for the borrower but who will lend mortgage money again, and at what rate? The risk of not getting back your investment is too great.

    We are sitting in a cesspool of unintended consequences from interference and manipulation of our government doing things in the name of being fair and compassionate. No one can fail, but it is at the cost of those that choose to succeed.

  8. Marcos Gans said:

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