How can a recession see a drop in profits and a rise in poverty? Where does all the money go, if not to the businesses or people?
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As other’s have stated, it’s that “money” isn’t going anywhere. Elon Musk “lost” 100 billion dollars. He didn’t actually lose anything. He didn’t spread his wealth out to other people, the gov’t didn’t take it.
Another way to think of it is if someone had a Mona Lisa painting. We can pretend it’s worth 100 million dollars, and then we say that person has 100 million dollars, but in reality, they just have a painting that is “currently” worth 100 million dollars. If no one wants a Mona Lisa anymore, the value of it would drop, and now they’re only worth 50 million dollars. But in reality, they still have 1 Mona Lisa.
When people stop buying houses, the value of houses drop. Money didn’t “go” anywhere. When people stop shopping at a grocery store, sure the grocer actually loses money in the products not being bought, but also the grocer “loses” money because the value of its stock generally drops as well.
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