What happens to all the money that disappears in a crash yt

[@davidmcculloch8490]

The rich also got richer after the crash, as much of the newly-created money flowed in their directions through loans to buy up assets, which they rent back to us at extortionate rates. Gary Stevenson explains this in his videos.

[@Skylark_Jones]

Yep. 👍

[@erongi233]

@@davidmcculloch8490 cheap QE money used in the trillions, literally,on share buybacks which boosted earnings per share and thereby executive bonuses

[@bernieburrows3731]

I like what Gary had to say at the start. However, he can't seem to have a conversation without saying how well off he is.. Considering how he made his money, betting against the odds, it's almost as if he's bragging.

[@IchigoThePrincess]

I've listened to his podcast. I more took it as he's using his wealth for proof that he knows what he's talking about. He's been poor and rich and understands both worlds. A LOT of economists are academic and don't have much experience in the real financial world, they're just historians. Also he IS proud of making money off correct predictions, don't get me wrong, I don't think he has any false humility there! ​@@bernieburrows3731

[@TheElementAce]

​@@bernieburrows3731 It does seem like bragging. But in my opinion, it's better that he tells us up front, rather than hiding it. 1. People actually listen to rich people, and they ignore the opinions of working class people. His riches give him credibility. (not saying it's right, but that's how it is) 2. If someone researched his background, and it came out that he was hiding a large sum of money made from betting on collapse, I imagine his audience would turn on him and he'd have to stop making informative videos.

[@MacSaxe]

It’s not £85,000 per bank - it’s £85,000 per bank group. As you know lots of smaller banks are part of a larger banking group. So say the person you mentioned with £50k at 10 banks was in fact only at 2 bank groups, they wouldn’t get 500k back, but 100k. Very few people know that and it’s a horrible loophole created by bankers for bankers.

[@safirahmed]

NS&I (National Savings & Investments) is a government owned bank that says all the money saved with NS&I is safe not just the first £85,000.

[@paulklee5790]

@@safirahmedThey say….

[@safirahmed]

@@paulklee5790 In the event that the government cannot honour the promises the people and the UK will have far bigger problems than people's savings.

[@andrewbarry1380]

well pointed out

[@Zerpentsa6598]

There are exceptions. Nationwide now owns Virgin Money, they are treated as separate entities.

[@stevo728822]

It's worse than that Richard. I've read of at least one investment firm that is issuing it's own corporate debt to buy Bitcoin. Debt being used to pump up the Bitcoin price is akin to the debt used to push up stock prices in 1929.

[@Lee_303]

And on a side note, Russia wants to buy huge amounts of Bitcoin!

[@BjorckBengt]

and tulips

[@kappatoflash]

Yup! It's MicroStrategy. The crazy part is that the founder got into trouble in the early 2000s for some sketchy activities and is now back with this alleged pyramid scheme.

[@Hystericall]

stock prices at least has a money making corporation as collateral. bitcoin is nothing, a mere puff of ponzi vapor value.

[@wrathofainz]

Switch currencies

[@jimduffield7822]

Ive always viewed this as the ultimate fix for inflation. Everyone dumps their extra money into stocks/assets/crypto and the value evaporates and the money they thought they had blinks out of existence.

[@AlvaSudden]

That's a very creative way of looking at it.

[@robertdyson4216]

Very clear explanation.

[@AlvaSudden]

Financial institutions failed in 2007 because they made huge, foolish bets on mortgage-backed securities. It wasn't just that asset prices fell, it was that banks and investment houses made highly leveraged bets that no longer had any relationship to actual home mortgages. Bank regulators should have stopped the banks from doing this.

[@kevin-e5h5t]

Banks create money (Currency) when they create a loan contract. If it is not repaid, then that loss appears on the bank's P&L accounts. If their ratio of loans to customer's cash goes above a certain ratio (10:1), then the government "bails out the bank" by helping reduce that ratio. They GIVE government bonds to them, to prop them up. This adds to National Debt, that taxpayers must fund. The minimum interest rate of 2% is supposed to be there, so that banks have some money to keep the doors open. When Central banks went below that, some went bust. Privatise the Profits - Socialise the Losses.

[@jennifershanks453]

Another example of socialism for the rich!

[@halfdan_f]

I think you'll find it is the central bank that creates the money, not the government.

[@helenheenan3447]

@@halfdan_f The government owns the bank.

[@vsotofrances]

Nop, the commercial banks create the money when they "lend"...no the Central Banks. CB create M0 money...that is pure drugs....but commercial banks may create money as well (as M1, M2, not pure drug ) this money is digital.

[@Nick-io9uk]

Quite. SInce the disgrace that was the govt response to the GFC, my view is that there are no truly private debts. Private debt is simply public debt that hasnt gone bad yet. The trouble is a unit of credit created by a commercial lender (i prefer the word 'counterfeited' spends into the economy no differently to that derived from capital. And as the govt will never let the money base fall, whether emitted in the form of 'money' or 'credit' the aggregate, systemic amount in circulation must keep on growing.

[@krismacg5673]

Oh yes, it's going to happen again (it's guaranteed) especially since they got rid of the banker's bonus cap. And us ordinary people are made to pay much more and much longer. Even Alistair Darling actually said that when the crash happens, the government always make us little people pay for it.

[@nickjones9867]

It’s a full gone conclusion that There will be a crash once trump enacts his aggressive tariffs.

[@schnodderbürstchen]

It is always happening again, the crash is an inherent part of our economic system

[@michaelcorrigan4625]

Great work. Education about money is essential in every areaof life.

[@frankhayes1135]

It really makes me laugh. I have tried to explain this to people over dinner and they simply cannot get theirs heads around it. Remarkably well educated people don't understand the basic tenets of our financial system. It is astonishing that 98% of people who have used money to buy things probably from the age of 4yrs. old, have absolutely no idea what money is, where it comes from and where it goes. When our current financial system has run its course (and I am sure at some point it will) what will/can replace it?

[@petermcarthur7450]

Well, it's kinda hard, y'know. Let me ask you something: what is the mechanism by which central bank interest rates are transmitted through to your credit card provider? "The central bank is the owner of last resort." "Overnight rates..." So what? What does that have to do with how much the guy at the pawn shop charges to hold on to my second-favourite guitar?

[@-Pol-]

Beer, s£x and axe heads.

[@Marek-o3u]

I have an average or 112 ish IQ, but I just couldn't understand inflation for the first 46 years of my life. When the light went on, I realised why my savings were near worthless. Oh to know about that 40 years ago. Well, 60 years ago. When you understand something, it's clear as day. But before you understand, it's simply opaque. Frankly I still struggle with the abstraction. I find boring people who complain about how expensive everything is by rambling on about how it's relatively unchanged in value has not been my most successful conversational gambit. It elicits actual anger on car forums, at very least. Oh, and for us relatively poor types, it's rather depressing. Give me some gold coins any day.

[@capnkirk5528]

@@Marek-o3u I hear those gold coins have a lot of nutritive value when society collapses. More than Bitcoin, anyway?

[@MarcoMasseria]

Frank, how do you explain standing on dry land to a fish in water? Yes, I stole that from Buddhist tradition, but I think it works well for us here. The system works because it works. How it works? CONFUSING! Add to that the fact it takes more than a couple seconds worth of thinking, and the average person checks out. I've tried for a decade to engage people in discussions of Oil and Money, the only two things that impact everyone and folks weren't interested. I had one couple in Philadelphia, Penn that gave me several hours complete with my diagram of hydraulic fracking works. So they are out there, but they're less than 1%, by far. I think what you are asking is almost akin to the afterlife. They can't imagine what things could be when they are completely different than everything they are. What I believe will happen, is that you will own what you actually own (physical stuff) MAYBE. For me, this thought was the driving force to purchasing a ranch property and stocking animals in Uruguay. Extreme? Maybe. But the security and calm is real. What's that worth? I want to say thank you to you and the other commenters for excellent civilized discussion that makes me feel there's others out there. Good day, sir!

[@waynecartwright-js8tw]

Back in the 90s I read Crashes by Robert Beckman, gave me a good dose of cynicism. Excess credit with overvalued assets.

[@clive-live]

The continuity of work on your channel is very useful in understanding the difference between money and capital assets in regards to our everyday lives and the choices that we have made or need to make in the future.

[@spaceshipearth356]

Southpark: "Aaaaaand it's gone." 😂

[@erongi233]

In a crisis the myths rapidly collapse. During the 2008 crisis one ,at least, of the banks in the UK was signed off as "a going concern" by the auditors when in fact it was bankrupt. When asked afterwards why they had signed it off as a going concern the auditors said because they knew the govt would bail it out. A reasonable question was why did they receive huge audit fees to give the going concern stamp of approval when according to them the bank concerned would be a going concern under any circumstances. Ernst and Young did not get off so lightly over their dealings with Lehmann Bros.

[@Paul-dorsetuk]

That's a brilliant episode thank you! Let's hope the "slowly, then all at once" crash moment doesn't come any time soon.

[@davideyres955]

It’s always that something is worth what someone is prepared to pay for it. When house prices crashed in the 80s they dropped in value because no one wanted to buy. This is the problem with house prices up until recently. House prices rose in the Blair era because they let banks lend as much as they wanted to. Houses are worth what banks will agree to lend you. So that coupled to the lack of council house building and private landlords buying up properties they created the housing inflation.

[@spankymcduff9683]

Money is a storage of wealth..ie..physical gold and silver. Fiat currency is not money as it is getting inflated away.

[@alexjav21]

not sure if its the same in the UK, but in canada you don't need to open accounts with multiple different banks for CDIC coverage. you can purchase "interest savings account" from several different banks in a single brokerage account

[@mysteryman480]

Before watching your video, I already knew this information. But there is something about it that feels mysteriously hard to grasp.

[@LivefreeLoz]

Hit 240k today. Appreciate you for all the knowledge and nuggets you had thrown my way over the last months. Started with 24k in October 2024…

[@IvanWilson-c5k]

I would really love to know how much work you did put in to get to this stage

[@LivefreeLoz]

I will be forever grateful to you, you changed my whole life and I will continue to preach on your behalf for the whole world to hear that you saved me from huge financial debt with just a small Investment, thank you Jihan Wu you're such a life saver

[@ElliGConcepcion]

As a beginner in this, it’s essential for you to have a mentor to keep you accountable. Jihan Wu is also my trade analyst, he has guided me to identify key market trends, pinpointed strategic entry points, and provided risk assessments, ensuring my trades decisions align with market dynamics for optimal returns.

[@lalsingh7340]

Jihan Wu Services has really set the standard for others to follow, we love him here in Canada 🇨🇦 as he has been really helpful and changed lots of life's

[@NielsVanTichelen]

His instruction allowed me to bring up my retirement plan, resulting in an estimated $700 thousand more by the time I retire.

[@ruthguthrie1099]

Good content thanks Richard 👍🏻

[@L8rCloud]

New money can’t “just simply be created” because eventually the printing of money causes it to lose its value. Inflation results. ….which is where we are today. The Governments of today are being blamed for inflation today but the inflation was caused by decisions made by several admirations before them during the GFC. It was exasperated by the pandemic however this only pushed the economy over the edge accelerating the inevitable…but it was the printing of money (‘quantitative easing’) that is the culprit. Fascism (blaming the ‘usual suspects’) is now on the rise everywhere JUST AS IT WAS IN THE 30s

[@CurtOntheRadio]

If QE was inflationary then it must be disinflationary during its unwinding? Presumably leaving a near-null impact?

[@L8rCloud]

@@CurtOntheRadio ? The money stopped being handed out but it’s still in circulation. They didn’t burn it.

[@sudo2998]

Thanks for answering a very interesting question.

[@ryantennyson7562]

It's sobering to remember our entire economic edifice is based solely on something as nebulous as a promise which can so easily be broken.

[@daveansell1970]

The problem comes from people trying to reduce their apparent risk to zero, which is impossible and has the effect of producing much greater systematic risk because all the risk is concentrated on a few organisations - banks - and if they fail everything else goes down. If everyone got 5% less wealthy there isn't much of a problem, but if done people get 200% less wealthy there are problems.

[@davideyres955]

It does depend on what type of debt, if it is unsecured then there is only the legal recourse, if it’s secured against something directly so it will be removed from you. This is something that the MMT tend to scoot around.

[@Sujki19]

a bit like a religion

[@ryantennyson7562]

@@Sujki19 Thanks. Gave me a chuckle.

[@blackbulldog4897]

@@davideyres955 Can you explain how MMT scoots around this?

[@thecarpenter645]

Collateral is what is disappearing world wide at the present moment and in that the banks security is slowly disappearing, in a lot of cases the banks are not aware of this.

[@Ido-w8w]

Thank you for recommending Daniel J Florence on one of your videos. I reached out to her and investing with her has been amazing. I paid off my $529k 15 years loan in 8 months. Now totally debt free with 2 paid off rentals. Love having no debt for the last 5 months. Thank you DANIEL J FLORENCE.

[@AruzHayatudeen]

Wow, congratulations on your impressive investment success!

[@freePalestine-c8n]

I'm curious, what are some of the key factors that you consider when making investment decisions? Do you have any tips for those of us who are just starting to dip our toes into the world of investing?

[@freePalestine-c8n]

I'm curious, what are some of the key factors that you consider when making investment decisions? Do you have any tips for those of us who are just starting to dip our toes into the world of investing?

[@Ido-w8w]

​@@freePalestine-c8nYou need a pro that is good at navigating the market. Someone like Daniel J Florence. she trades for me.

[@Precious-w7w]

I agree just reached My goal of $300k after a massive drawdown earlier this year

[@andybryant3052]

I had 500k disappear. The flip side of that is since i didnt utilize it, it never really existed. The value existed but just not the capital.

[@lateralus6512]

When debt is paid off (or wiped out due to bankruptcy) then the money is removed from the system.

[@schnodderbürstchen]

'Money can simply disapper, because it is not real, it is merly the promise to pay a dept' -so true! Thats the reason why in times of crisis, people invest in a harder currency, like noble metals or other valuable assets, instead of stocks or cash. Sure, in a crash, that will still lose potentially a lot of its value too, but not everything at least.

[@GlennLeinster]

A great video Richard;-) thanks for your work;-)

[@chriswills9437]

I had not realised people were being advanced credit against something as volatile as cryptocurrency.

[@maemorri]

I remember 2008. The phrase that was really made it click for me was "It goes to money heaven." I don't know why, but that seems different than: It disappears".

[@ickster23]

Thats why you turn a portion of your "promissory notes" into hard assets that will hopefully appreciate in value or, in the worst case scenario, remain viable in a everyday life.

[@martinjohnson1534]

In other words, money is bollocks and it only exists because we all agree it does. I'll try to remember that next time the rent is due.

[@CuriousCrow-mp4cx]

Try reading some financial anthropology. Then you'll understand.

[@TheElementAce]

​@@CuriousCrow-mp4cx By "financial anthropology", do you mean stuff like the work of David Graeber?

[@glenmurie]

But your promise to pay the landlord is real. :) As is the promise of the government and legal system to destroy your life if you choose not to pay.

[@derikuk2967]

@@glenmurie Some promises are more real than others.

[@1995taiwo]

The loan promissory note may be an asset because obviously it goes on the asset and liability side of the ledger but it is not an equity of the bank and therefore it is not a security that the bank has a equitable claim over. It’s always advisable to hold some gold and silver in hand.

[@abcabc-m1q]

When a buyer pays the seller for an asset, the payment transaction realises the monetary value of the asset. As the market value of the asset changes, the perceived monetary value changes accordingly but that value hasn't been realised in a tangible form yet. Thus, we cannot say that the money has disappeared. It would be more accurate to say that it just hasn't come into existence yet.

[@SarahWalker-Smith]

I presume Richard Murphy is covering this subject at this point in time for a reason .

[@holgre3470]

Trump is going to crash the global economy with trade wars apparently.

[@helenheenan3447]

Yes, bitcoin. The latest asset bubble ready to burst.

[@billB101]

@@helenheenan3447 No one knows this. Unless you have a crystal ball.

[@SarahWalker-Smith]

@@billB101 No they don’t, quite true ,but we should listen to a wide range of opinion and make a rough guess like everyone else. It might affect our decisions about mortgages, savings spending ,business plans etc.

[@billB101]

@@SarahWalker-Smith There are no rough guesses when it comes to market crashes. That's why they crash.

[@n-tertainmentx-tended4760]

Money can't be destroyed - it can only be transferred into fewer hands.

[@yootuub301]

The government IS the insurer. It ensures the payment of the most essential promises as seen by the dominant culture. Thus ordinary people lose their jobs and homes but financiers continue the dance and even get more chairs!

[@seanhewitt603]

Money is a counter of the value of time given over to someone else's purpose. It is a slaves collar that is unrecognizable to the slave.

[@phoneticau]

Very good FAQ for money savings debt & assets

[@user-xu5vl5th9n]

It doesn't disappear, it was never there in the first place.

[@enderwiggin8947]

When a stock or index goes up in value it’s because people bid it up. It’s illusory, we call it stock capitalisation but the money really isn’t there. It’s an illusion of potentiality that’s all. Therefore how can anything be lost?

[@littlemanhovis]

Yes the bank can come and take your property even though they produced the currency for the mortgage out of thin air. If your holding gold it matters not if the bank crashes you have no third party liability. The bankers don't want you holding gold it is their cryptonite

[@keithscothern3398]

banks cannot create money only the government can.

[@CuriousCrow-mp4cx]

Never heard of Gold certificates? Doh. Not true. Gold isn't their kryptonite, otherwise Putin would not be trying to launder gold purchases through the banking system. This is not 1914.

[@jamesholt5963]

Of course for the Layperson you use the term Money. Its actually Currency. Money is a Produce. Be it exotic feathers, nice shells. Pretty rocks like Diamonds and gemstones. Produces like metals. Caviar. Art. That is Money. Quote me. The only Equitable Exchange for a Produce is Another Produce. Money for Money. Not Exchanging Produce (Money) for and IOU (Currency). Money does Not "Disappear". Not bullet proof. It can be destroyed. Its value can change. Currency however, being a Debt? So the rest of the discussion is accurate. Just use the word "Currency" please! Gees!

[@derikuk2967]

Money is a social ledger of owned (stored) value in a network or society. Currency is the accepted or "trusted" medium that we use to move value around on the ledger... and that trust can easily wear thin. Never store a significant amount of value in a fiat currency. In November of 1923 there were Trillions and Trillions of Reichsmarks in Germany's economy. They still existed. But nobody wanted them... except as wallpaper and fire-starter.

[@joemarion2284]

the 2008 crash was handled badly. The government was only interested in the banks and keeping them going. The bank created the crash with it's greed and then put it's hand out. The average person who lost their home because of the banks greed, got forgotten and even blamed for their foreclosure. The banks got bailed out and the took the homes too. So. the bank got even richer. If the government bailed out the homeowner instead of the bank, the bank would have got their money and the homeowner would have kept their home. People wonder why there is should a antigovernment sediment when the government for working against their interest.

[@Weaseldog2001]

Don't forget that the banks, collected on their mortgage insurance, also. So they got paid three times with every foreclosure.

[@Weaseldog2001]

I'd argue that the 2008 Crash worked as designed.

[@d.s.7411]

During a recession the lost money does not disappear. In the U.S. when the economy is contracting and people lose money, but where does it go? It goes to the Federal Reserve which the Fed uses to reflate the economy by giving it to the government to spend or give to areas of the economy that will help stimulate the economy. In hopes the money spent in the economy will increase growth in the economy.

[@Rex-G8UBJ]

I love the fact that when an organisation fails those owing them money are swiftly transferred but those lending loose their shirt

[@billB101]

Privatise the gains, socialise the loses. Been like this for decades.

[@alexjohnward]

Depends on the type of money, I think that should be specified. While modern fiat currency fits the description, some modern digital money, and some ancient money, don't. Putting aside the fact that Bitcoin and Gold are not a good money because they aren't good for most payments, a modern fixed supply digital money that is good for payments doesn't require debt, banks, government issuer, or the ability to vanish. Granted these new fixed supply monies are a tiny fraction of the economy, with only a few dozen people currently living on them, but they might catch on with enough time.

[@RichardLennon-w6b]

I'm glad you made this video it reminds me of my transformation from a nobody to good home, $34k monthly and a good daughter full of love..

[@SuaraCheng-hp9vx]

Hello 👋 how do you make such weekly amount?? I'm a born Christian and sometimes I feel so down of myself because of low finance but I still believe in God's.

[@RichardLennon-w6b]

Yes,Thanks to Mrs Elizabeth Regina Nelson's time in my life,which had a profound impact on me.

[@DrMike-vy7oc]

Wow! I'm kind of in shock that you mentioned the expert, Elizabeth Regina Nelsen. What a coincidence!!

[@jamesliamedward5915]

Elizabeth Regina has really set the standard for others to follow, we love her here in the UK as she has been really helpful and changed lots of life's with her crypto experience.

[@HazelLeo-cf4pi]

Unfortunately, not all of us were financially literate early. I was 35 when I finally educated myself and started taking steps. I went from $176,000 in debt with zero savings or retirement to now, 2 years later, fully debt-free and over $1000,000 net worth. I know that doesn't SOUND like a lot, but I'm incredibly proud of it. Now I'm fast-tracking my wealth building (investing $400,000 annually) and don't owe a dime to anyone. It's a good feeling!

[@coachhannah2403]

Technically, nonexistent money disappears in a crash. Just clarifying.

[@Shepz-123]

"The Trading Game" by Gary Stevenson is a great book with insight into one person's experience of the UK financial trading system.

[@Nousmourronsseuls]

Did you know Gary was the best trader in the world (despite only doing it for a few years) but gave it all in to fight for poor people and the revolution. He’s an amazing guy (or so he says).

[@CuriousCrow-mp4cx]

Not quite. It an exposé of how international money markets work, and how the dealer banks trading in it make their money. It's really an exposé of the global financial payment system works. Not banking specifically. There is a difference, because the Lehman Brothers and JP Morgan, etc are investment banks and not retail ones. And retail ones are your high street bank for the public. Whereas the investment banks make their money trading financial assets, and operating in the wholesale financial markets, where the minimum transaction is in the millions of pounds. So most ordinary people will know very little about this and the Offshore finance markets. Those were the assets Gary was trading during his time in the City.

[@billB101]

@@Nousmourronsseuls Gary wasn't anywhere near the best trader in the world. I like the guy, but that statement is a complete lie.

[@physiocrat7143]

Not a very good explanation. A mortgage is not what it seems. The borrower is the lender's tenant for the duration of the loan. What is labelled "interest " is in reality RENT. The process involves the creation of money, at negligible cost, for the purchase of the asset by the lender. In reality the process involves the purchase of land and buildings. From this perspective a crash is the collapse of a speculative land price bubble. The lenders are land speculators. Prices of land rise faster than the rent which supports that price, from a sustainable 20 times to an unstable 30 or more, and eventually the system breaks, as in 1974, 1992 and 2010. The next thing is a wave of defaults and the lenders are stuck with a pile of vacant property. There is a reluctance to dispose of this property as this world crystallise the loss. They therefore hold on to it, which keeps it off the market, creates a shortage and prevents the real economy from functioning. The damage is then aggravated by a general shortage of the credit which is needed for the economy to function.

😂are you a landlord? No your thesis is, sorry, bollocks!

[@physiocrat7143]

Please point out the flaw(s) in my thesis. It isn't "my" thesis, incidentally. I am not smart enough to be able to make up such a thing. "My" thesis has been around for nearly 150 years.

[@physiocrat7143]

No reply came...

[@MrMigido]

Lulz You upset a homebuyer stuck with dream they they are losing sleep over. Domestic home purchasing, on the never never, is most succesful psyop ever.... A dream payed for with nightmares. Even if the home is paid for in cash, it is not owned what is owned is a registered title that taxes get first bite of if unpaid. Secondly all registeredvtitles are subject to compulsory pu😅rchase at the whim of anything bewteen local town all and the (supposedly) elected. government. Far better to get a Trust to buy the property and rent it out to trust owner to gain maximum rebates and a legal fiction to keep debtors at the trust office address? ​@@physiocrat7143

[@MrHughk1]

@@physiocrat7143 You are not the tenant of the lender, you are the tenant of the crown estate as all property titles are held by the crown. You can only buy the beneficial use of the property, you can never buy the title so even when the mortgage is paid off you are still the tenant.

[@zlamanit]

If I create a private limited company with 1,000,000 shares and sell one of the shares for £10 then on paper the company is worth £10,000,000 while having £10 in assets. It's similar with stock, all shares are valued at the latest seen price but it's not possible to ever sell all shares at this price unless the company makes profit and buys them back.

[@jamesrav]

this actually happened in the US a few years ago. "There's a little deli in Paulsboro, New Jersey, called Hometown Deli. It is mostly unremarkable except that it is publicly traded, on the stock market, where it is valued at over $100 million, for some reason.Apr 28, 2021". Being publicly traded it couldn't be kept totally secret, and was finally exposed

[@baumulrich]

The best way to think about and investment is not as money, but as value. Anybody with a house should know this. As long as equity is tied up in the house, you cant spend it, and you can only "take it to the bank" once you sold it and cash hits your bank account.

[@derikuk2967]

Just sell small fractions of your house as needed, e.g. to buy groceries. (I'm kidding of course.) You are far better off storing your (longer term) value in Bitcoin, and accepting that the value of your house is its utility in parking your butt and your booty. We still need small fiat holdings as our medium of exchange for now. Go watch some videos by Rajat Soni.

[@richardharvey1732]

Hi Richard J Murphy, I tell people that all the money that has ever been invented still exists, even if only in human imagination. What they mean when they tell you that you have lost your money because the investment you thought you had made was just another fantasy and your money is gone! usually what this really means is that some other person or body has taken control of it. Cheers, Richard.

[@purerlogic4811]

When it comes to a stock crash, and people have money in held in the account with an investment platform (rather than actively invested), would you say that is protected during a crash provided the platform doesn't go bust?

[@rajTrondhjem10]

Amazing 😍

[@tblspn]

serious question: what happens when a government fails (eg. Syria this week) and so there is no central bank creating money, or for that matter taxing it back?

[@jamesrav]

I bet they are doing some bartering right now. Even read an article that said Russia - due to sanctions - is bartering at the highest level, Mandarin oranges for some grain.

[@arthurdixon5890]

Another very interesting video, thank you. Are Premium Bonds safe?

[@petermcarthur7450]

😂 If you buy in bulk, yes, they're safe.

[@Mindsi]

System of integrity🎉🎉🎉🎉🎉🎉🎉🎉🎉

[@Questioneverythingg730]

It’s not the government who insures the accounts to the value of 85k. It’s a private insurance policy with a fund of 500 million. All this means is that if the banks fail, then that money will used to cover a small percentage of the lost cash. They know this too. Buy gold and silver while your still can

[@Chav-j2z]

Right then, Richard: is it worth investing in gold as some form of insurance?

[@janeknight3597]

How would you realise its value?

[@keithscothern3398]

I would say the price of gold is volatile, and could fall in a crisis when people try and sell to create liquidity.

[@goldmother2238]

The money ends up as goods and services that are consumed. If the money were loaned to develop tangible assets like real estate, it might be recoverable

[@BoredomIncarnate1]

Banks used to depend on people to function - they could only lend what their customers put in. There were many banks, and one going under might screw a town, but its reach was limited. Now people depend on the banks to function - they create money out of the ether, so they are not dependent on people or their deposits. We now have 5 big banks that are too big to fail, any one going under would cause countrywide catastrophe, so the government is forced to bail them out upon failure.

[@stevendevilliers471]

It is so pleasant being broke, no worries about crashes

[@alexandrebenois7962]

How about after the crash?

[@Don.Challenger]

Well, of course, a good deal of wealth isn't based on commercial, mortgage and consumer debt - your promise to pay, it is based on expectations of future growth in valued asset lines and much of that expectation is based on the very thin transactional exchanges expressed as the market spot and various future prices (and their various derivations) representing a tiny fraction of the existing stock of those positions, but still taken to have the same price if sold at that moment as well - of course, if the entire stock of any good was to be tendered on the market simultaneously, its valuation would rightly collapse. The market is an orderly crystalline thing very little of it warm enough at any one time to barely trickle along, the avalanche occurs only when the melting point is reached and preconceptions fail large block on block.

[@softfocus87]

Thank you. Money does not exist.

[@drscopeify]

You are mixing ideology/theory with reality, in reality money is absolutely real. It is a reward for work = it is real because someone spent the time to work or whatever to received compensation for their effort with money.

[@MrHughk1]

@@drscopeify You are both confusing money with currency. We have no money in our economic system, only promises to pay which are debt.

[@helenheenan3447]

@@MrHughk1 Absolutely correct. A lot of confusion in these comments, with people making their own definitions of money, cash, currency.

[@drscopeify]

@@MrHughk1 Currancy is just the legal money in a county like Euro in Germany. That is currancy, the local legal tender. But money is just all forms of liquid assets AKA cash or bitcoin or gold but it is all 100% real. Even back when we had Gold standards as people had less faith in Governments like in the 1800s so we had a gold standard to create trust but that system is a bit silly becasue it was fractional. No Government had 1 to 1, gold for every bit of local currancy issued it was always fractional, they only had a small amount of gold in the safe. These systems are very faulty, in 1965 France for some reason, still not 100% known today why, began to liquidate all of the assets in the USA, like bonds France bought and held at the US Treasury or properties that France owned in the USA like homes of diplomats or whatever. France began to sell them all and since they are a country, they could demand gold as payment and began to empty out the US gold reserve. VERY strange, most likely just Charles De Gule really just did not like America, France actually left NATO as well by the way so they really went nuts. This activity forced Richard Nixon to end the Gold standard in 1971 because of France's actions. Pretty wild. No wonder the USA and France have had a cold relationship for a long time so it was good to see Trump and Macron together at the recent re-opening of Notre Dam. I don't like Trump at all but it is important to keep good relations in the west.

[@ausfyausfy2455]

Yes... I always had a feeling that bitcoin would be used to make promises disappear by their inherit nature of high fluctuation value... with an illusion that virtual property is finite and unique. Ai and other super computers all think that in about five to 10 years, they can solve encrypted block chain. I am not sure if this is true, but I am still surprised how block chain is still a thing with the trust that the founder of Bitcoin would not suddenly increase supply and rug pull them.

[@MathewLewit]

Quantum computing can potentially break BTC. However that would destroy conventional banking too, so it's not a big deal if that actually happens (in grand scheme of things). However Google said they have quantum machine with 105 quibits and BTC can resist up to 1M in current state. Also new quantum computer resisting algorithms exist and it is possible to migrate to them as need arises. None of this however seems a problem for next one or two decades and it is problem that can be solved. Which is important for both BTC and conventional banking that also depends on encryption. AI has nothing to do with this.

[@piaeichberg]

I would suggest you get educated a bit more on bitcoin, as your comments make clear that you have not done this yet. Nobody knows who the founder of bitcoin is and he/she/they have effectively vanished, so your comments make no sense. A limitation of 21 million bitcoin is programmed into the code, so there is no illusion that it is finite, it is in fact finite

[@martinbisschoff988]

Only one problem! Us suckers that actually work...did not "promise" to work.....we WORKED. 😊😉

[@scottyfive4319]

Hi Richard just a quick Question, I thought that FSA guarantee was for 3 separate accounts only and must not be accounts from a bank in the same group i.e. Halifax and Bank of Scotland only one is covered. I am I wrong??

[@ACCPhil]

One thing I have never fully got is how banks borrow short (deposit accounts) but lend long (mortgages, multi-year loans). That just seems to leave the system wide open to bank runs. It's almost as if the whole system is stupid.

[@vmoses1979]

That's why there is a government backstop ie you and me and other taxpayers will bail them out like in 2008.

[@karlkerr7348]

Think of money as one of Starmers pledges, they fail to materialise

[@Shepz-123]

Patience is a virtue you clearly lack. The last lot had 14 years and materialised nothing but further poverty and division. Perhaps we should give them a bit longer than a few months.

[@davidmcculloch8490]

And much of it disappeared under the Tories.

[@GerhardBothaWFF]

“Igor! What are we going to do? The money is all gone! It’s all gone!” “Dont worry Alexander. It’s not gone. It just isn’t yours anymore…”

[@nfpnone8248]

Value disappears, and value is not money, it’s subjective.

[@user-je4xp5hq2e]

Money is a measure of value. When the value disappears, the money disappears right along with it. Otherwise, how would you know the subjective value has disappeared? The value of money (purchasing power) is determined by how much goods/services you can buy per unit of measurement (e.g., milk at $3/gallon vs $6 for the exact same amount - price goes up, indicating a loss in value, aka inflation). When we say "fiat currency," what we really mean is "fiat value." Since all value is fiat (subjective), whatever we use to measure that value is also subjective and fluctuates. This is why I find the rationale for bitcoin and gold to be... interesting. They are no different than the dollar, or pesos, or cow dung or sea shells.

[@friendlyfire7861]

"The government has to be the provider of all money at the end of the day." That is modern monetary theory 🐎💩 End central banks, go to gold.

[@xge555]

Gold can be declared illegal tender by the government and they can force it to be handed in under an amnesty offer. Bit Coin can be wiped out by governments. One EMF attack on the net / grid and one hacking like happened with blue screen of death is a problem also. Land can be taken by compulsory acquisition. The safest investment is in one's physical health and skills that can be bartered. Seeds and soil are important but storage and water are already a problem for millions of humans. Climate catastrophe is now major entertainment. Time to be kind to each other. Nature Bats Last.

[@sudo2998]

At least in England the GoE backs up bank deposits... no such thing in the US, I don't think. Maybe this thing called Reverse Repo is equivalent?

[@Winspur1982]

Oh but there is! The FDIC does the exact same thing here in the US (up to an even larger limit per bank). And on Nov. 6 my online banking started to remind me of this with a new little advert (I honestly don't know if Donald has heard of the FDIC. It's funded by the banks anyway so it should be safe from his direct tampering) .

[@sudo2998]

@@Winspur1982 Thanks for the reply!

[@derikuk2967]

@@Winspur1982 ...in theory.

[@DanielAnderson-w5j]

Thanks for the breakdown! I have a quick question: My OKX wallet holds some USDT, and I have the seed phrase. (alarm fetch churn bridge exercise tape speak race clerk couch crater letter). What's the best way to send them to Binance?

[@horridohobbies]

The banks can fail to pay their depositors. However, the government can also fail to pay these people in the event of a banking crash. It's less likely, but not impossible. There are no guarantees in life.

[@DistractedDaisy]

It just keeps dissolving into the national debt balance! It doesn’t disappear when accounting is working!

[@jacktbugx1658]

Money disappeared They never existed in the first place Tesla stocks 1000 True value 10 990 air balloon

[@marksharratt-e1k]

How do the BRRD bail-In powers fit in to any fresh crisis we might/will see?

[@dimitardimitrakov2841]

I am in the beginning of the video but the idea that money disappear when a debt is not repaid is wrong. Money actually disappear when the bank credit is repaid. As for the crash what disappears is the accounting balance value of the asset whose price has crashed.

[@irishman9877]

Its not money, its fait currency. It gets delvalued, and real money goes into hiding

[@roseymalino9855]

The money never existed. It was only a number on paper. That stock that went from $100 to $10 wasn't %90 lost because not everybody paid $100 for it. Only 1 person paid $100. 'Same thing with houses, real estate, gold, artworks, etc.

[@indricotherium4802]

It goes without saying that the traditional and unimaginative thinkers in the Westminster political class would ever want to concede ground to the intangibility theory of money. It would leave them like musketeers with no gunpowder.

[@kevinrussell-jp6om]

FIAT money is debt. When money is defined, as the dollar used to be as a certain quantity of silver, or a representative of that silver, the amount of money in circulation was restrained. Debt ONLY got out of hand once all definitions of the dollar were abandoned. The 29 crash was set up by credit creation. Richard is only telling you part of the story.

[@kubluu]

It never existed in the first place because of fractional banking.

[@Prometheus-Unbound]

It's not money, it's perceived value of an asset.

[@soutteruk1]

Money is nothing but pretence that is destroyed by the smallest and simplest act of bad faith.

[@MrHughk1]

No, money is gold and silver, you are talking about our fiat currency which intrinsically has next to zero value and is only a promise to pay ie it is debt.

[@sarahann530]

​@MrHughk1 Gold and silver has no intrinsic value either , it is worth what the market decides it's worth

[@MrHughk1]

@@sarahann530 Gold and silver both have industrial uses which gives them value. The making of jewellery also gives value coupled with the inherent scarcity also contributes to the value. "it is worth what the market decides it's worth" this is how we define value by the market price! The only thing with inherent value if we exclude all commodity's is a human or animal that can do work. I personally do not want to go back to a slave type system that you appear to be proposing.

[@soutteruk1]

@sarahann530 No, the market does nothing but reflects the human theatre around it. No Dan Hannon neoconisn here please.

[@soutteruk1]

How does metal fulfill its promise to pay?

[@alexandrebenois7962]

I'm surprised you didn't mention bail-ins. Governments may not step in in the next global crisis.

[@stiglarsson8405]

All the money that circulate today is about 70-80 dept, the rest is kinda real value! Its both pro and con.. its the banks that"print" more money by dept.. and thats kinda good, becuse they supose to make a profit/balance there sheets.. dont take to many risks! It works in moste normal situations! Soo were did the money disapear in a crisis.. it didnt, it wasnt there in the first place, it was a promise to pay later.. we call this a dept!

[@donaldduck5731]

The more debt in the system the more unstable it becomes and the quicker it falls.

[@lindabastable3021]

Thank you. It is indescribably difficult to make a huge proportion of the public grasp that 'money' is fundamentally an idea. Bits of metal and paper are representative of 'money', but 'money' itself does not exist. Try explaining that the infamous Wall Street crash a century ago made some people very, very rich. What was lost by some was gained by others. I tried valiantly before brexit to explain that this loss/gain was inevitable. I swear I actually lost weight doing so. My frustration was epic. Alas, people stupid enough to vote for brexit were too stupid to understand financial pain was inevitable.

[@Nousmourronsseuls]

Some people were too stupid to realise that Brexit was about more than money.

[@diamondsproglerlivingforev9711]

After the crooks in power have fleeced everyone they spent it on assets which makes it seem like its gone ❤

[@witlesswonderthe2nd883]

Called the great taking as they eye up pension pots to be gone.

[@2011ppower]

When people believe boom when they doubt crash!

[@tealkerberus748]

If you buy shares for $100 one day and they're worth $10 the next day, we know exactly where your money went: to the person you bought shares from for $100. Maybe they bought those shares for $90 from someone who bought them for $80 and in fact the $100 you paid was divided amongst a lot of people, but the person you paid $100 to is the last in the chain. The money isn't lost, it just went to someone richer and more informed than you.

[@goldeneggduck]

This is fundamentally flawed because it only describes half of the situation. Likely this is a deliberate fake truth to hide the real issue. Say, in the sub prime crises, a given house was sold and somebody walked away with that proceeds after selling the house. Those people have to put the money somewhere in the financial system (and not under their mattress). The new owner not being able to repay the loan is one thing, the old owner laughing with the cash should still be laughing with the same cash. That's what I don't understand. Likewise, the mortage bank might now be in crises because people can't repay their loans. But in many cases such loans were sold and securitised, keeping the banks away from the blast zone. For all those securitised fake AAA derivatives from sub-prime loans were purchased with real money and the seller were again laughing with cash, which did NOT vapourise. It is only the buyer tricked into buying those fake AAA derivative products that have their value vaopurised. The seller of those fake AAA derivative products have already received their proceeds and are laughing. SO WHY ARE YOU PUTTING AN INVISIBLE CLOAK ON THEM? YOU ARE NOT EXPLANING THE SITUATION. YOU ARE HIDING THE TRUTH!

[@Marek-o3u]

Kinda bypasses the idea that currency was once backed by gold.

[@RichardJMurphy]

Of course, because that has no relevance any more.

[@Marek-o3u]

@@RichardJMurphy Indeed, I was pondering how it used to work, from Romans to even the USA pre 1970.I found your video quite enlightening. The only question, and I'm hopelessly ignorant, is how or IF value is related to money supply. or total money blob, I think I mean. If so, apart from liquidity, I wonder how currency avoids spiraling into worthlessness. That would be a great follow up video, if you can make it as clear as this one.

[@petermcarthur7450]

​@@Marek-o3uLong story short: because there are practical limits to how much currency can be created. When there aren't then, yes, spiralling into worthlessness is exactly what happens. You see it in online RPGs, for example, unless the devs think like economists and pay attention to the overall flow of value through the game world.

[@blechtic]

@@Marek-o3u Fiat currency is basically backed up by the economy. One of the reasons money has value is that the government requires you to pay taxes with it, which means everything of (taxable) value needs to have a currency value. That therefore makes it the simplest unit of exchange inside a country. Due to that, it is convertable to assets and property (there is a large market for it). Because of that, based on profits, inflation, risk and all sorts of indicators and feelings, the money markets can arrive at sort of a concensus of how the economy as a whole is doing and what the price of money (interest rate) should be for loans, which along with the amount of economic activity, wealth, etc. determines inflation i.e. how the value of money changes, meaning that its value seeks equilibrium. The existing money supply is therefore essentially a claim on the total economy and wealth, or a measure of how much money the economy can support. And then there's the central bank overnight interest rate which allows control over the economy by basically putting a floor to which (risk-free) investments (loans) are profitable for banks to make. (Any bank money not tied in investments is deposited in their central bank account where it accrues interest.) This is how I see it. Feel free to correct me.

[@tropics8407]

Yes. The government then is responsible for the inflation too.

[@CuriousCrow-mp4cx]

Human sentiment creates the inflation. Causes vs effects. It's all about trust in the end. And a lot of governments fail to understand all the implications of their policies.