Where Has All The Money Gone?

Money seems to be disappearing. The value of homes has gone down and the banks are in huge amounts of debt and have to be bailed out by the government. But where has all of the money gone?

Money consists of two main elements.

Photo by thejonoakley on Flickr

Photo by thejonoakley on Flickr

The first is cash (notes and coins). The total amount of cash in the UK is just over £50bn, with about £43bn circulating outside the banks and £7bn in banks’ safes, tills and cash machines.

But cash is a relatively small proportion of the total amount of money. So what is the rest?

Read More: Where has all the money gone? John Sloman

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8 Responses to “Where Has All The Money Gone?”

  1. Ray Says:

    There was a quantity of money in general circulation up until October 08 that kept everyone solvent, buisinesses running and banks trading etc but suddenly it all seems to have disappeared. I acknowledge that my level of ignorance about financial matters is astounding but I just can’t grasp where all the money has gone. I have a nasty feeling that there are some crafty people or organisations around the world who are sucking it away and there does not appear to be anyone able to stop them.

    If anyone has information on an idiots guide to what is going on, please advise.

  2. Mat B Says:

    In the list of worlds richest corperations what place does Halliburton hold now after the Iraq war? Exxon aswell? My concern is what they will do with the money when they have it all? Facsist state policed with a private army maybe?

  3. IVA Says:

    One thing’s for sure, with the ever increasing numbers of people falling into personal insolvency, the people who most need financial assistance are struggling to receive it.

    With banks still applying a strangle hold on the flow of consumer borrowing to all but the most credit worthy clients, and imposing rises in interest charges to existing borrowers, making it even more difficult for them to repay what they owe let alone increase their debt, it seems that the banks are really keen to increase their cash holdings well beyond the £7 billion you mentioned.

  4. maxcharve Says:

    “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” (Ludwig von Mises).

    In the fullness of time, your question “where has all the money gone” will probably be less relevant than “what will happen to us when the Bank of Englands printing presses are switched off?”

    Some of the worlds strongest currencies are faltering and savvy investors/traders know it. Since March 2009, the US Dollar has fallen over 20% against the Euro and Sterling continues to fall towards par value with the Euro.

    The logical conclusion is that the US government and the UK government both want to see their currencies fall to make their goods and services more competitive on the world market.

    We are told by our governments that they want to see a strong Pound (or Dollar), but events would indicate otherwise, unless the problems are so great that neither government is able to influence macro events in a turbulent financial climate and that both currencies are spiralling out of control.

    In any case, high street banks no longer have sufficient deposits to lend to consumers and their appetite to lend has been stifled anyway. Perhaps by their knowledge of things to come?

    As a result, battered consumers are being forced to reduce their outstanding debts. There are three ways of achieving debt reduction: 1. through increased earnings, 2. re-negotiating the terms of the debt, 3. legally writing the debt off.

    As we approach 2010, a strong increase in enquiries for advice about bankruptcies and entering into an IVA, suggests that the second and third options are becoming more of a necessity for growing numbers of households and if this proves to be the case, the answer to your original question “where has all the money gone” will be “into insolvency cases…”

  5. joe Says:

    money can be printed and money can be burned thats not the problem the problem is getting people to see money as valuable. that’s the part that has failed. much of the same old wealth is still here allthough the money that represents that wealth has lost its value per unit of currency. that’s what happens when you pay for things by simply printing more liitle pieces of papper with green pictures of presidents on it and then call it wealth. people catch on to the trick. the actual wealth is hoarded in the hands of a few. land, oil, resouces, food. but their holding on to it for now.
    the greedy rich bankers and gangsters, senators, of various ilks are buisy right now, trying to figure out how to get the most of people, working them as hard as possible if there going to share it around. lending will resume later when the benifits of sharing it fall upon the right people. scarcity and violence are the main tools of the winners in the giving the paper value, trick. it’s the money game. we insist you play it.

  6. Barry Says:

    The bigger problem is, all this money, supposedly owed, is artificial. It does not, and never has, actually exist, apart from on ledgers and bills.

    Get rid of artificial money, then we may stand a chance of coming out of this horror show.

  7. Taryn Says:

    I believe that all physical money should be discontinued.

    Seeing that less and less people are still using cash it is becoming unnecessary for any physical money for trading purposes.

    Instead of printing new and more money they could improve the infrastructure of all electronics in all areas of a country in order to improve efficiency and effectively reducing the printing of money.

  8. Camagu Says:

    The topic of money creation is a very interesting because money is both created and lost in unison with fluctuations in the market. To think that money is created and lost as a result of fluctuations caused by investors expectations is of interest as well because its correlation with concept of self interested economics.

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