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Ask HN: Trillions of new Dollars and Euros have been printed – where are they?

2 points by TekMol ↗ HN
In the USA, about 5 Trillion have been created:

https://fred.stlouisfed.org/series/M2SL

In Europe it was similar. Also trillions have been created.

Where is all that money?

It must be on the bank accounts of some peopl, companies, institutions, right? But where? And how did it get there?

I for sure do not have it. My bank account did not get bigger during Corona.

Any "Corona winners" here?

9 comments

[ 1.7 ms ] story [ 34.3 ms ] thread
GFischer
https://www.investopedia.com/articles/investing/081415/under...

Basically, banks are the ones that get the money.

The Federal Reserve buys Treasuries or other financial papers with the "new" money.

Banks can then turn around and loan that money.

So, institutions and individuals in good terms with banks are then which benefit from the "new" money (if you get easy loans, you can get real estate, buy stocks, etc...)

TekMol
If the loans are used to buy real estate and stocks, then the money is on the bank accounts of the people who sold the real estate and the stocks.

Does this hold true? Are those trillions on the bank accounts of people who sold assets to people who loaned money to buy them?

Shadonototra
In the pocket of the same people who ruined the world in 2008

In an attempt to stop inflation, central banks, yet again, ruined their own people

The people with the money probably went investing in Asia instead

muzani
Gov has been paying out lots of financial aid. Loans have had much more generous terms and lower qualifications. Some of it is propping up the real estate bubble.

Usually the middle class are the only ones who don't benefit from it.

d--b
I think that too. It probably also fed some of the stock market, vc and crypto bubbles.
muzani
That's an interesting thought. It was a direct influence on the GME stock event. Who's to say people didn't put it into crypto?
TekMol
Loans: Ok, and who took the loans? And do they still have the money on their bank accounts?

Real estate: Buying real estate just moves the money around. After A buys a house from B, now B has the money. Who is B?

muzani
Yes. It's not that simple because the money does move.

Companies that deal with conventional loans took more. So usually not the VC fuelled tech industry. Still, they spent that money. People like to think their numbers going up was a result of their product market fit and hustle, but maybe it's just that a lot of people had a lot more cash.

On real estate, B was probably losing money for a while. People stopped buying/renting offices during lockdowns, some froze their house ownership ambitions, plus some countries didn't enforce laws on people who didn't pay rent for a while. So for a while it froze.

Also a lot of people hoard. People take loans and then sit on the money. Some expected a recession or at least personal hardship.

There was also the "Great Resignation" which might just be because some people were no longer living paycheck to paycheck.

I'm also personally seeing a sharp increase in chicken and grain prices, almost double what it used to be. Blue collar salaries have gone up significantly. People are blaming the Russian war, India food shortage, China-US trade war. But I think the story is more complex.