Trillions and trillions of dollars! Again, because of the sheer size of this stupidity I will find it hard to believe the economy doesn't at least slow down drastically.
1 comment:
Anonymous
said...
The dislocation could have significant impact. However, it is important to remember that a loan does not by itself create wealth - it is a temporary transfer of possession. The failure to repay a loan does not destroy wealth - it is a transfer of that wealth.
So the subprime meltdown is a big wealth transfer from lenders/investors to borrowers (or to the parties to whom they spent the borrowed funds). The wealth is still out there somewhere.
1 comment:
The dislocation could have significant impact. However, it is important to remember that a loan does not by itself create wealth - it is a temporary transfer of possession. The failure to repay a loan does not destroy wealth - it is a transfer of that wealth.
So the subprime meltdown is a big wealth transfer from lenders/investors to borrowers (or to the parties to whom they spent the borrowed funds). The wealth is still out there somewhere.
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