GFC - Where did the money go

Listen to this informative interview. Yes, its slow, but it cuts through some grease. $2 trillion dollars went to Saudi Arabia in the GFC

Online audio:

The Elephant Hunters: Chronicles of the Moneymen

www.abc.net.au...

Australian Broadcast Commission radio

a reply to: oilNGO

care to give a brief run-down of it?

How is SA hurting and needing finances?

a reply to: oilNGO

So none of it went to the Banks? I guess I may have to listen to this

It is an interesting question with a lot of documentaries, books and papers now out. One statistic I find troubling is how $900 Billion would of paid out every house loan in the nation, yet Trillions got dished out. It does give the impression that there is a lot of bloat going on in the system or there is more to the official story.

How the economic system is managing the issues with Junk Bonds is one area where the public purse is picking up the tab. Another area is with the continuing motivation for austerity conditions in countries like Greece, as for how much exactly is as much of a mystery as all of the government budget.

a reply to: kwakakev

Haven't listened to it, but generally the way these things work is that a debt on a piece of property is considered an asset. If you pay off all the debts, the banks assets shrink considerably. This means they have to significantly cut back on the loans they can make or are forced to leverage further to keep the money flowing.

Paying off all the troubled home loans in the country would trigger a banking collapse. The system only functions if people are in debt.

a reply to: Aazadan

My understanding of the current system is similar to your description. The banks do have a financial interest in providing loans with the more people on the books, the more money that comes in. Until events like the GFC take place.

These days the bank do not have any money to loan away, what they do is create it when you apply for a loan. When you promise to pay back a loan it makes an asset. Now that the bank has this asset, the net worth of the bank is up. Since the bank now has more wealth it can now provide you with some. How wealth can be traded between different assets through the balance sheet provide the justification for this wealth creation method - a debt based economy.