If All The Countries Are In Debt Where Did The Money Go?

[zz000ter]

Thoughts?
"Someone" must have a lot of digits in their back account.

http://justdwl.net/images/2012/July/6/4ff7857543731.jpg

[yao416]

Politics, they took our monies

[Mr. Robo]

Noticed every year that the millionaire's list grows.

[mbg]

Maybe it was wasted or written off as phantom value?

It's not like the economy is a perpetual motion machine or has any laws of thermodynamics. It is possible to flush money down the toilet and never see it again. The enriched toilet water doesn't pop up somewhere else in the economy with the same amount of value.

[ShadowVlican]

phantom money.... credit...

[wilsonlam97]

Banking was a horrible idea.

[Coz4k]

Government bonds. That is how countries finance themselves.

People own them, companies own them and other countries own them.

In short, the debts are owned by a big number of economic actors.

[Corleone187]

Credit - fake money people dont have

Basically all those hero's who tried to flip real estate and make money ended up in a bubble like the Dutch did in the 1600s with Tulip bulbs. Tulip bulbs were the 1st bubble and 1 bulb became more expensive than a house in Holland

House prices in the states were fake and these flippers would keep jacking up the prices, then default on the loans they got to buy the houses. Since the whole financial sector invested in risk of loans they had no money once people defaulted on their loans

Basically it started with Bear Stearns but the government got someone to bail them out. Then Lehman Brothers thought that they could get a bailout as well but the government let them die. Then AIG was too huge for the government to let die so they bailed them out or the economy would die.

So you can see all these companies invest in each other so there will be a domino effect if one dies. For example company A might invest in crappy loans, Company B might insure these crappy loans if they default etc

[Syne]

Maybe it was wasted or written off as phantom value?

It's not like the economy is a perpetual motion machine or has any laws of thermodynamics. It is possible to flush money down the toilet and never see it again. The enriched toilet water doesn't pop up somewhere else in the economy with the same amount of value.

Well we created the economy to serve us. Can't we just create one that doesn't suck?

We could make this economy 2.0 sustainable, and give it rules so it's not wide open at the top and closed at the bottom.

[aplayaz2000]

Illuminati

[Talamasca]

The Rothschild family.

[Jimboski]

Someone burnt all the money!

[jacobe]

The wealthy people and their offshore accounts.

[brunes]

When a government "goes into debt", they do it by printing bonds. A simple example is Canada Savings Bonds - these are a form of government debt everyone should be familliar with. Say you buy a $100 CSB. This is you giving $100 to the government in return for a piece of paper and a promise that they will pay you $100 back plus say 1% interest / year after 5 years. As such, the government is now IN DEBT by $103 or whatever the total is - they borrowed $100 from you, and now they owe you that money in the future.

There are a lot more types of bonds - long term, short term, fixed rate, floating rate, etc - that investors buy from governments. When governments need money every year to fund their budget, they do it by selling these bonds to investors. Some years they sell more, some years they sell less. The bonds are sold on an open market and are bought / sold by EVERYONE - other governments, investors, companies, etc.

The interest rate the government sets on the bonds is driven largely by this international bond market - IE, buying a government bond for Spain is a lot riskier than buying a government bond for Canada (IE the odds that Spain will default on their payments is higher), so in return the goverment has to make the interest rate a lot higher in order to get people to buy the bonds... but of course, this means the government is going into a lot more debt for what they borrow.

Thus when people in the media talk about "payment on the debt" as part of the goverment budget - what they are talking about is payments by the government to all the people who bought these bonds - including your grandma's Canada Savings Bonds, but also including the $10,000,000 in bonds held by SunLife, etc.

Things get more complicated than this when you look into US T-Bills and other instruments - but this is the basics and the answer to your question.

[time space]

Watch the academy award winning documentary "Inside Job (http://www.imdb.com/title/tt1645089/)" for a bit of insight.

[Nettles]

Credit - fake money people dont have

Basically all those hero's who tried to flip real estate and make money ended up in a bubble like the Dutch did in the 1600s with Tulip bulbs. Tulip bulbs were the 1st bubble and 1 bulb became more expensive than a house in Holland

House prices in the states were fake and these flippers would keep jacking up the prices, then default on the loans they got to buy the houses. Since the whole financial sector invested in risk of loans they had no money once people defaulted on their loans

Basically it started with Bear Stearns but the government got someone to bail them out. Then Lehman Brothers thought that they could get a bailout as well but the government let them die. Then AIG was too huge for the government to let die so they bailed them out or the economy would die.

So you can see all these companies invest in each other so there will be a domino effect if one dies. For example company A might invest in crappy loans, Company B might insure these crappy loans if they default etc

It's been long since shown that the mortgage crisis was not the reason and that even if every American defaulted, the amount of debt wouldn't be enough for them to be in the position they're in. It has more to do with bad governing and honestly those people who say illuminati/Rotschild/Leo Wanta etc offer better explanations for this than motgage crisis. We're being screwed by someone either way.

[gman]

Where? The easy answer is the creditors.
Not many countries is in debt. Actually, I cannot think of one on top of my head. It is the government of the country which is in debt. Their citizen can be the creditors.

[mbg]

Watch the academy award winning documentary "Inside Job (http://www.imdb.com/title/tt1645089/)" for a bit of insight.

An academy award winning documentary about finance is not likely to be very good.

[ovechkin1]

Noticed every year that the millionaire's list grows.
+1, it's the governments that are in debt.

[IamToronto]

maybe this is a good start for you


http://www.youtube.com/watch?v=tGk5ioEXlIM


dont trust the banks ;)


has anyone heard about iceland?
they arrested these politicians and bankers
they revealed the debt of a majority of its citizens

"oh these banks are too big to fall the entire country will become a ghosttown"

guess what? theyre booming..and FAST

if only canada would lose the shackles these bankers have on her.. but harper wont allow that

[zz000ter]

When a government "goes into debt", they do it by printing bonds.

Thanks for the great answer

My problem then is who owns the biggest chunk of the bonds.
I would not mind if it is average citizens owning the largest chunk - but I doubt that

[Royalsoldier]

The 1% are currently hiding 21$ Trillion Dollars.

US banksters (as Max Keiser calls them) are hiding 10$ Trillion Dollars.

It's only a matter of time until the financial structure collapses.

Source:
http://ca.news.yahoo.com/wealthy-hiding-21-trillion-tax-havens-report-says-175737425.html

[vero95]

Thanks for the great answer

My problem then is who owns the biggest chunk of the bonds.
I would not mind if it is average citizens owning the largest chunk - but I doubt that

pension plans, insurance companies, banks, funds, conservative investors, etc
never heard abut ECB buying spanish and italian bonds to keep the borrowing rates for those countries low?

[wilsonlam97]

Credit - fake money people dont have

Basically all those hero's who tried to flip real estate and make money ended up in a bubble like the Dutch did in the 1600s with Tulip bulbs. Tulip bulbs were the 1st bubble and 1 bulb became more expensive than a house in Holland

House prices in the states were fake and these flippers would keep jacking up the prices, then default on the loans they got to buy the houses. Since the whole financial sector invested in risk of loans they had no money once people defaulted on their loans

Basically it started with Bear Stearns but the government got someone to bail them out. Then Lehman Brothers thought that they could get a bailout as well but the government let them die. Then AIG was too huge for the government to let die so they bailed them out or the economy would die.

So you can see all these companies invest in each other so there will be a domino effect if one dies. For example company A might invest in crappy loans, Company B might insure these crappy loans if they default etc

The states need to go into recession a couple more times.

[Mark77]

A good old fashioned hyperinflation would solve a lot of the world's problems, including this unequal wealth distribution. And it would restore economic power to producers and savers, rather than borrowers.

[Piro21]

A good old fashioned hyperinflation would solve a lot of the world's problems, including this unequal wealth distribution. And it would restore economic power to producers and savers, rather than borrowers.

Yeah man, savers would love to have their savings rendered worthless by hyperinflation. All those guys who overextended themselves to buy houses sure would hate it if their debt obligations were easier to pay off, too.

[infamous91t]

I'm not sure about Canada but in India where i'm originally from - ppls money are with politicians, they are having wealthy lives and their money is secured in Swiss bank.

[BornRuff]

Trying to explain actual economics to people on the internet seems to be a losing battle, but if you care to understand what is actually happening in the world, stay with me here. If you prefer conspiracy theories though, there are many other posts here that can take care of you.

The simple fact is that not every country in the world is bleeding money right now. If you want to know where the money is coming from and where it is going in this world, look at the current account balances of countries in the world.

http://en.wikipedia.org/wiki/List_of_sovereign_states_by_current_account_balanc e

It is essentially the amount of money coming into a country vs the amount of money flowing out of the country. Those with positive current account balances are earning more on exports than they spend on imports, earning more money from foreign investments than they spend on foreign debt, and/or have more positive than negative cash transfers. Not surprisingly, the list is topped by China and Saudi Arabia are on top of the list, but Germany, Japan and Russia also make up the top 5.

Those with positive current account balances are where all the money is going.

[Syne]

^ Why does it seem like the countries with the best account balances, have some of the worst living conditions for their citizens?

[BornRuff]

^ Why does it seem like the countries with the best account balances, have some of the worst living conditions for their citizens?

The top 10 includes Germany, Japan, Switzerland, Netherlands, and Norway, so I don't think that really adds up.

[Matrixvibe]

http://25.media.tumblr.com/tumblr_lz0f657gu31qhvtgno1_400.jpg

[a-tree]

Balance of accounts and national debts are invariably linked with politics. This thread should be locked immediately.

[gh05t]

Maybe it was an "Inside Job".

Don't forget many women these days have large ........ bank accounts:)

Lots of women becoming Millionaires overnight too from Divorce settlements.

[dealseeker2011]

It goes to the pocket of those leaders.

[anyasok]

OP, you do realize that debt is fictional right? Its all made out of thin air. Money is just as real as the pixels you are shooting at in call of duty. Its fiat and its backed up by nothing. The only real thing are resources that money gives access to.

So to answer you question. The money didn't go anywhere since its all fictional to begin with. The whole planet is in debt to itself and if countries really wanted they could completely wipe it off and not be in debt anymore ever again (same goes for individuals and for the whole socio-economic paradigm).

Its a sick society that puts itself in debt to itself and others through fictional elements that don't even exist...

[Pratzy]

Balance of accounts and national debts are invariably linked with politics. This thread should be locked immediately.

Wtf ?

This is actually an interesting thread to read, and you want it to be locked for some BS reason ?

***** you.

[Mark77]

Yeah man, savers would love to have their savings rendered worthless by hyperinflation. All those guys who overextended themselves to buy houses sure would hate it if their debt obligations were easier to pay off, too.

Actually leveraged assets tend to go to zero in a hyperinflation as lenders stop lending (ie: entire appartment blocks in hyperinflation-era Germany could be bought for a mere ounce of gold, or a relatively small amount of food) and the assets themselves revert to cash-only valuations. And if savers could save previously, they certainly would benefit in the aftermath since they're used to consuming less than they consume. Plus savers, unlike debtors, have plenty of access to proper inflation hedges such as productive businesses, gold, etc. -- asset classes that don't fall apart (unlike RE) if debt collapses, as it inevitably does during a hyperinflation.

Hyperinflation isn't something to fear if one is self-sufficient. Now if one is reliant on debt, then hyperinflation is terribly bad usually.

[a-tree]

Wtf ?

This is actually an interesting thread to read, and you want it to be locked for some BS reason ?

***** you.

This thread is only interesting due to your highly impressionable mind. If your iq was ever in the three-digit realm you would know just how stupid the question OP is asking.

[mbg]

OP, you do realize that debt is fictional right? Its all made out of thin air. Money is just as real as the pixels you are shooting at in call of duty. Its fiat and its backed up by nothing. The only real thing are resources that money gives access to.

So to answer you question. The money didn't go anywhere since its all fictional to begin with. The whole planet is in debt to itself and if countries really wanted they could completely wipe it off and not be in debt anymore ever again (same goes for individuals and for the whole socio-economic paradigm).

Its a sick society that puts itself in debt to itself and others through fictional elements that don't even exist...

If the value of money is fictional, it makes sense that debt would be fictional.

But try telling that to a drug dealer you owe money to :)

[Doodies]

Trying to explain actual economics to people on the internet seems to be a losing battle, but if you care to understand what is actually happening in the world, stay with me here. If you prefer conspiracy theories though, there are many other posts here that can take care of you.

The simple fact is that not every country in the world is bleeding money right now. If you want to know where the money is coming from and where it is going in this world, look at the current account balances of countries in the world.

http://en.wikipedia.org/wiki/List_of_sovereign_states_by_current_account_balanc e

It is essentially the amount of money coming into a country vs the amount of money flowing out of the country. Those with positive current account balances are earning more on exports than they spend on imports, earning more money from foreign investments than they spend on foreign debt, and/or have more positive than negative cash transfers. Not surprisingly, the list is topped by China and Saudi Arabia are on top of the list, but Germany, Japan and Russia also make up the top 5.

Those with positive current account balances are where all the money is going.

This is the most logical explanation, but most people will find a way to place the blame on everyone and everything else; Governmanet, Banks, Unions, 1 percenters, houseing market ect. Just stop buying products that are made in Chinese sweatshops and pay higher price for locally made or at least first world made products. It is good to see Germany and Japan up there, both have strong manufacturing sectors, here in Canada we would rather have a "service based economy"....

[Hitman21]

Trying to explain actual economics to people on the internet seems to be a losing battle

The irony is amazing.

[fakishan]

+1, it's the governments that are in debt.

The people depend on the government to make the economy work, it's like saying only our parents are in debt when you're 10 years old. It implicitly means we are also in debt.

The money is being transferred from the majority to the few. I'm not saying this shouldn't be possible, but the way it is accomplished right now is pretty much cheating and destroying the economy for everyone else.

[BornRuff]

The irony is amazing.

Any suggestions on what is wrong with what I posted?

[time space]

Watch the academy award winning documentary "Inside Job (http://www.imdb.com/title/tt1645089/)" for a bit of insight.

An academy award winning documentary about finance is not likely to be very good.

Sorry to hear you didn't like it.

Personally, I thought it was a very informative film showing the roots of the financial crisis in a way that the corporate media doesn't seem to wish to show it.

[Doodies]

Sorry to hear you didn't like it.

Personally, I thought it was a very informative film showing the roots of the financial crisis in a way that the corporate media doesn't seem to wish to show it.

What does this movie say is the cause of the fincial crisis? The fact that it won an oscar proves the media does like this movie, so I doubt it is too controversial, probably along the same lines as one of those Michael Moore films.

[time space]

What does this movie say is the cause of the fincial crisis? The fact that it won an oscar proves the media does like this movie, so I doubt it is too controversial, probably along the same lines as one of those Michael Moore films.
Truth is not exclusive to ConspiracyPlanet.com (http://www.conspiracyplanet.com/). ;)

There is a good short summary of Inside Job on Wiki (http://en.wikipedia.org/wiki/Inside_Job_(film)).

[RatherBePerfin']

Wasted on needless events, like the olympics?

[Ceryx]

Wasted on needless events, like the olympics?

OP and everyone else needs to read the this.

https://sites.google.com/site/sociologysystemsresearch/home/economic-crisis/money-creation

"Because all money in the existing fractional reserve system is created as a liability, or debt. The money has to be paid back, plus interest. This means the following: the total amount of money owed exceeds the total amount of money in circulation. To repeat: there would be no money in circulation if all debts were paid off. "

In short, central banks takes debt to print money which lends to bank that lends to business which pays your/my salary.

The money circulated on the market is similar to the debt the central bank takes.