WHERE HAS ALL THE MONEY GONE?
As I listened to the news on NPR this morning I wondered how long will it be and will the economy ever get back to where it was?
And then I wondered how did we get here and is there an easy way to understand what happened in the past year or two?

The other day I heard an "economist" say that we need to start buying again ! Isn't that what got us here? Don't we have enough "stuff ?"

I think that in order to keep the economy expanding the financial powers have given us more money. The way they have done this is by helping us buy houses, driving the home values up and providing home equity loans for additional spending. Just owning a home necessitates spending a lot of money which stimulates more business. The problem is that we couldn't afford those homes. We couldn't keep buying stuff just to have more of it. The cost of houses was driven up beyond their real value which created imaginary wealth. We might have been able to slide back and adjust the economy except that the financial institutions began to "bundle" that imaginary wealth and sell it to investors. This got really confusing and with computers it started to accelerate. Instead of going downtown and talking to your banker about investing a little extra cash it was a click of the mouse and millions of dollars jumped around like popcorn. When we finally realized the Emperor had no clothes all the investors tried to call in their investments but very quickly the fat was in the fire and the imaginary wealth evaporated.