Where is all the money?

So I was thinking. We have had rampant printing of money over the past decade. Where is it? If people or businesses borrow money, then they buy stuff with it. So, if the money supply has doubled then we should see either twice as much bought or twice the price of the goods bought. Not sure if I am missing something but it makes sense if more money is in circulation it should show up in the price of goods or the amount of goods purchased. Can someone explain to me what I am missing?

a reply to: jlafleur02

Good question but I think if you just look at the salaries/expenses of members of Congress/other "representatives", and the extremely wasteful and inefficient spending of government programs, you'll have an idea of where a lot of that money goes

Us taxpayers foot the bill for so many inefficient activities/programs that give us nothing in return. Then you have bailouts like AIG where taxpayers money was used to "save" a huge entity because it was too big to fail, and if the gov. let AIG go down it would've affected other areas of the economy/other groups that had a stake

a reply to: FamCore
Very true but they buy goods with that money.

Wars are for free. /s
Afghan, Iraq, and following behind ISIS.

Climate change is for free. /s
Unstable weather patterns affect food and water, which affects all human life. Duh.

As soon as you deposit that money the bank will decide if it need to be replaced by new ones. The reserve bank always try to keep the same amount of money in circulation.
Real new money is made when loans are granted. Is called credit, is fake money (just a number in the atm screen). Interest payment, that's the real money.

Something like that. I may be wrong. Open to any corrections.

Where money comes from is one of those 'birds and the bees' conservation for any economic minister. Some handle it better than other but I am yet to see any handle it really well.

With money that is created for a loan, it just disappears out of existence when paid. This is in line with the money appearing into existence on creation of the loan. The way a balance sheet is used to record a set of assets allows for this legal situation.

Making more money is fine when an economy is growing. Basically it works like a tax as the government get free first use of the new notes and the rest of society pays through inflation. Unfortunately our dumb governments give the new money first to the banking sector so they can get an interest cut and keep the public purse constantly in debt.

When it comes to how the economy works it sounds like there is a bit you are missing. As with anything it does take time, but keep at it and things will get clearer. There are a lot of great educational resources around these days for anyone with the motivation.

Most of it has been used to a) bail out the banks from their toxic loans they'd made to people who could never pay it back. And b) the majority is being used to buy government bonds to prop up their value.

So in a sense, the governments are printing money to buy their own bonds. So they're printing it and giving it to themselves, in essence.

a reply to: jlafleur02

I agree, they definitely by things with all that money. But on an individual basis we likely wouldn't see a lot of what they purchase. Property and especially silly items like jewelry - that's a lot of money going to items we wouldn't see in plain view (I wonder how many $5K-$10K watches are on the wrists of members of Congress - enough to buy nice house I would bet).

And services even more so - we don't know it but a Congressman/Senator might take several flights in one month and there is nothing being "produced" out of that travel other than exhaust fumes from the jets. The food and other travel expenses, paid for by taxdollars, also get eaten and there goes another $40 that just *poof*

Services are where a lot of money goes though, and you don't see any direct "goods" from those usually so I bet that's a chunk of the money being discussed in OP

originally posted by: jlafleur02
So I was thinking. We have had rampant printing of money over the past decade. Where is it? If people or businesses borrow money, then they buy stuff with it. So, if the money supply has doubled then we should see either twice as much bought or twice the price of the goods bought. Not sure if I am missing something but it makes sense if more money is in circulation it should show up in the price of goods or the amount of goods purchased. Can someone explain to me what I am missing?

There is a lot to learn so I suggest to start reading to get your answers. It is important to have a working understanding in order to fight the parasites. Teach children. That's why I take the time to write.

In the debt/money paradigm there are classes of money based on liquidity/number of counter parties. The US Federal reserve (a private bank) is custodian of the US money system. The US treasury issues physical money.
M1 is cash and quivalent. M2 is money on deposit or invested in tier 1 debt instruments.
report on M1 and M2 from the Fed

The USG used to track something called M3. They stopped but private parties still keep track.
shadow stats

Then we have leverage of actual units of labor (what money is supposed to be) into debt instruments that generate interest returns. This is where the banks network of counter parties goes exponential. One bad apple causes the whole counter party netwok to freeze. Like Lehman. some comments on derivatives

The terminology of "printing money" is when the Federal Reserve takes worthless, non-performing assets on their balance sheet and pays face value. The Fed will never sell these assets in a conventional sense. This is the biggest financial swindle in the History of Earth. Then banks buy US treasuries and other risky assets like stocks. The financial "industry" (i.e. parasites) and the stock market are the primary conduit of getting money moving in the economy.

When you hold a US dollar, you are lending 1 unit to the Federal reserve. Hard assets like bullion in your possession, are the closest thing to unencumbered money, it's convertible to any paper money on Earth. The US may try to take it away from people or outlaw it. Real estate is OK but the government can legally take it away easily because you can't hide it.

Kimble & Verto took it

What money? The real money has left the country. What we have left is fake money. The stocks we own are not money, the mortgage we have is not money. We use credit cards. that is not real money. I think we have a real lot more money out there off the books than the real paper money.

a reply to: InverseLookingGlass

That was very informative and described in a way that even I understand. Thanks for taking the time to share your knowledge - it is pretty complicated but you did a great job of breaking it down and explaining how it works.

Great work friend

This video pretty much nails the life cycle of money. Check it out if you have a half hour or so to kill.

youtu.be...

What your alluding to is money in your or anyone elses pocket. The money institutions like to baffle you with terms like money in circulation. This term alone has multiple meanings, as Inverse has so eloquently put. But all of that is truly the money mans BS.
The money that's in true circulation ie. in peoples pockets not in banks or other money holding institutions, no one can put a true figure on that because there are trillions of factors that are unknown. As an example what cash money do you have in your possession, whether it's to spend immediately or under your mattress, only you know that figure. Now multiply that by the number of people in your country and you get to see the problem.
That's why when governments talk about money in circulation it talks about ALL money even that which is being held in banks or other institutions. Now the killer blow comes when talking about the money in their definition, everything that Inverse says is ALL illusion and mirrors. All this money in reality does not exist only on their books.
When talking about REAL money(the money in your pocket) the national debt or any other debt for that matter does not matter one jot (except the money men do not want you to have it because they want it) it's what that dollar will buy you ie. pay a bill or buy food or any way you want to spend it.
The bottom line is money is essential for you as they have made it that way and that is why you are punished if you try to start something like a bartering scheme as it takes the money men out of the lucrative loop.

originally posted by: rickymouse
I think we have a real lot more money out there off the books than the real paper money.

Last count I saw (But I didn't check a source...) was about 2% of our money is in print.
The rest exists in the computers.
It's hard to even get a real count, which you'd think would be information someone had on hand. Turns out, thanks to insane lending practices (fractional reserve lending) the banks are making money up out of thin air every day- and expecting you and I to pay them back with our wages.

Sounds about right- if I scraped my life together, I could probably come up with about 2% in cash of what my home is supposedly worth.

It's not a system that's long for this world, IMO.
Sadly, those who have built their empire on this nonsense won't let it go easily- I'm guessing they know that our fake money is about to collapse and have a plan to maintain their power over the rest of us...

a reply to: FamCore

There is more debt in the world than money. Does that answer your question..

purp..

a reply to: jlafleur02
The vast majority has simply been used to increase the value of assets. That is dead money that is of no use whatsoever to the vast majority of people whose incomes are based on producing real goods and services that people purchase ie real/live money.

A classic example of this property. If you do not build houses but increase the amount of money available (in the hands of a few) this increases the demand on the existing housing stock which simply puts up the purchase price. In the vast majority of cases people sell one house and buy another with very little actual cash changing hands. The total value of all those houses keeps rising. The vast majority of that is debt owed to banks. Thus the banks look as if they have lots of money. If the bubble bursts ie people suddenly stop buying houses, the prices collapse, the banks lose billions and they collapse......da da 2007-2008!!!!!

FYI this is UK tory policy. By not building houses and providing first time buyer purchase schemes they increase the value of property which increase the bank balance of all their (rich) friends. Not only that any real money 9ie in economic circualtion) migrates from the poorest in society to the richest via ever increasing rents due to an ever increasing demand for homes !!! How anyone with half a brain cell can't see this is jaw dropping.

Another consumer of this false cash is bonds which is basically a promise to pay back money at a future date. This is what quantative easing does. Central banks purchase bonds which increases the "bank balance" of the banks (some of which is used to stimulate the property market DUH !!). However these banks have recently sat on the money in case things go belly up.

Some of this money goes into higher wages for a group of people considered "too important NOT to pay ever higher salaries (back to this in a mo)". The extra salaries do not result in extra purchasing but instead languishes in personal bank accounts, usually off shore. So yet another electronic increase in wealth wih zero increase in money flowing around the economy.

True wealth is an increase in economic activity. But in order to get this the people producing the goods and services have to get paid more since they are also the consumers (remember the ones at the top with mega salaries are NOT mega spenders they are hoarders). NB it does not matter one jot whether the goods and services are public or private (howls of protest from the capitalists), what matters is that the money circulates.

Finally back to all those ever so important corporate leaders. I have never known anywhere in the world any company that was so utterly dependant on one person that without that person the company collapsed. There is always somebody down the ranks perfectly capable of taking over the reigns. Government is too gutless to turn round to these corporate vultures and tell them to take a hike. Support your country for a reasonable salary or f off!

There you've got me ranting about the greedy corporate b.st.r.s now

a reply to: jlafleur02

Look at the stock market and you'll see where it's gone. The market has more than doubled from its lows 6 years ago. Especially look at the equities market, like houses. They have recovered to nearly pre bubble highs.

Also consider that 1 percent of the world population control half the world's wealth. It's no mystery where the money is.

a reply to: lordcomac

I think our government is very aware that banks and the stock market are making money out of thin air. In fact, I think they like it. Their money keeps it's value against other currency that way, the only ones that are at risk are those who actually utilize this. I can't figure out why the government bailed the banks, possibly because they actually have always known about this. As long as we have to worry about losing everything we worked for we will allow our government to do it's thing and we will continue leaving the banks drain us dry because they lend us more money than they should.