Where did all of the money go during the Great Depression?
Some of it did vanish. Like if you buy a house but then can’t keep up on the payments. The bank forecloses, you have no house plus you’re out the money you did spend. An example from Depression times is this: people bought stocks on the margin. Meaning they bought stocks but only paid 10% of the price. So if I wanted $10 worth of stock I could get it for only $1. I agree to pay the other $9 later. I’m betting that the stock will go up so when I sell it, or other stocks I own, I can pay you. Instead the stock goes down. All the other stock I own goes down too. I still owe you the $9 but now I have nothing. The other guy who was counting on the $9 is out of luck too. And the money that we were both counting on earning in the future never really existed. So it did just vanish in some cases.
