> I also didn't say that the money disappear, I said the money may just end up getting parked in the modern day equivalent of dragon hoards. There's plenty of things to park idle money in hopes of returns.
You miss the point. What does the person who sold the assets in which the money is "parked" do with it? If they buy a bonds what does the seller of the bonds do with the money? Leave it in a bank account? The bank will lend the money to someone who will either spend the money (stimulating the economy) or reinvest it. They might buy another asset. If that asset is newly issued shares or bonds, the money will then go to a company planning to reinvest it. Anything else and it just pushes it another step to another person.
Eventually it goes back into the economy.
> I was just pointing out that the idea thaf it would just become investment in other parts of the economy is naive.
The naive assumption is that "parked" money somehow leaves the economy. its "parked" from the point of view of the person making the investment, but it has to go somewhere.
> I hadn't downvoted you, but I will do so now. I always downvote people that are butthurt about internet points.
How mature and charmingly expressed!
My point is that there is a lot of Dunning–Kruger in HN discussions of economics and finance.
> You miss the point. What does the person who sold the assets in which the money is "parked" do with it? If they buy a bonds what does the seller of the bonds do with the money? Leave it in a bank account? The bank will lend the money to someone who will either spend the money (stimulating the economy) or reinvest it. They might buy another asset. If that asset is newly issued shares or bonds, the money will then go to a company planning to reinvest it. Anything else and it just pushes it another step to another person.
I miss no point. I understand quite well that "parked money" still exusts. What you ignore is that value is sometimes "destroyed". Investiments that underperform or go in the red, loans that default, crashes in real estate, etc. if money is invested in stocks, and the stocks value go in freefall, the nominal amount of money that existed previously in the economy is the same, and everyone is still poorer because of it.
The massive AI hype is massively pumping a bull run in a very small sector of the economy (if this is a bubble is not something I can answer). A lot of money is moving around around a small subset of companies pumping revenues of one another in a circular fashion, which increases the value of those stocks (thus creating economic growth, real or otherwise). Without this mechanism, this value wouldn't have been created. It's anyone's guess how things would perform without it.
During a crash, the same amount of money that existed prior to the crash is still there. The crash still happens and the country can still go into recession.
> How mature and charmingly expressed!
Thank you. I, too, think I am mature and charming.
You are shifting what you talked about. The comment I replied to was about tech companies putting money into stock buy backs instead of AI. You are no talking about AI being a bubble.
You also failed to understand that money put into an investment has to go somewhere pretty much immediately. If someone defaults on a loan they must have used the money, so someone else has it, so it is still not destroyed.
If this was true universally then the total amount monetary value in the economy was constant, apart from the feds printing some. But it's not. Value comes and goes. You can definitely lose money without it going elsewhere.
> You are no talking about AI being a bubble.
I explicitly did not talk about AI being a bubble.
You may understand of economics (at least you say so). But reading comprehension is not your forte.