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Do you believe that wealth can not be created or destroyed?

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pinoy_abroad

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It's just my opinion..

Post Merge: May 27, 2011, 07:30 AM
that is why I think Filipinos working abroad and being globally competitive are really important. Filipinos abroad sending billions of dollar a year, athletes(like Pacquio), when they invest or spend there money in the Philippines. May kababayan tayo na makikinabang, more money will exist in the circulation. A transfer of wealth from another country to ours.
« Last Edit: May 27, 2011, 07:30 AM by pinoy_abroad »


allanmm13

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Can you elaborate more as transfer and creation are not synonymous.




Payback

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I think you are equating wealth with matter - it cannot be created or destroyed.



lowbatt99

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The theory is flawed.  If wealth remains contant while the population is growing then everyone will become poorer every minute.


richpulubi

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Of course, wealth can be created.  It is created when you either find or create something of value, then monetize it by selling it, either manufacturing or distributing that thing of value.  The rarer and more valuable, the more expensive and profitable.  Example, in the 80's, there was no Google, facebook, or even internet.  When these were created and marketted, the creators became billionaires.

OFW's are valuable cuz they have skills and education that many western countries' workers lack, or demand too high a pay.  And so, there is a demand for them, though they may be paid lower than native workers in those foreign lands. But make a lot of money, compared to the same job if they stay in the phil.


richpulubi

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If wealth cannot be destroyed, then where did the TRILLIONS of dollars that were lost in the Great Recession go?  Shouldn't that money have gone somewhere?  Where did the money Lehman, Fannie Mae, Freddie Mac, Citigroup, and the hundreds and hundreds of banks that closed go?

Even China and India lost billions during that crisis.  So did the philippines.  Where did all that money go?



Post Merge: May 31, 2011, 08:46 AM
For hundreds of years wealth was land, agriculture and natural resources.  That's why lands were conquered.  That's why royal families intermarry, to keep the land thus, the wealth, within the family.  Then came the industrial revolution, wherein wealth was created by making things that people wanted to buy, like cars, tv's, radios, appliances.  Then, the information age came about, and wealth was greatly created from the internet and IT.

Now, wealth may go back to the old ways, when natural resources are running low.  Land, agriculture, and natural resources like gold, oil, and coal become very very valuable.
« Last Edit: May 31, 2011, 08:46 AM by richpulubi »


richpulubi

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I agree with you that wealth is more correlated with value than with money.  But value is subjective.  Therefore, wealth is subjective.  Since it is mainly a product of your mind, then wealth can be created or destroyed by your mind.  It depends on what you perceive as valuable. As in the great recession, wealth was destroyed, not transferred anywhere else, but destroyed when people perceived all those derivatives to be of little actual value.


neo

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I also think that the theory is flawed. Wealth is not even close to energy.

Energy cannot be created nor can be destroyed. It just transform from one state to another-Law of Conservation of Energy.

The problem regarding wealth is, while it can surely transform from one form to another, it can definitely be destroyed.

Example, may 1 Million Pesos si Juan, tapos ibinili mo ng maraming maraming pagkain. Tapos, "nilamon" nya sa isang upuan lang (hopefully buhay pa siya). By the process of digestion, na-destroy yung wealth ni Juan na worth 1 Million. It does not even converted in to another form of wealth. May bibili kaya nga tae ni Juan for 1 Million pesos?

Regarding wealth creation, depende kung kaninong point of view or definition. As far as Finance is concern, wealth can be created but definitely can be destroyed.

So, to revise the theory, -- "Wealth may be created but can always be destroyed."


neo

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^Lalo naman pong napamalian yung theory nyo nyan.

May basic equation po tayo para diyan (actually may complex equation for advance concept po ito medyo magulo lang).

Total Wealth = Farmer + Grocery + Juan
2,100,000 = 500,000 (food) + 600,000 (money) + 1,000,000 (money)

Ibinenta po ni farmer lahat ng food for 600,000.

No effect on wealth. It was just converted from one wealth to another.
Total Wealth = Farmer + Grocery + Juan
2,100,000 = 600,000 (money) + 500,000 (food) + 1,000,000 (money)

Ngayon, nagbenta si Grocery kay Juan; All foods for 1,000,000

No effect on wealth. It was just converted from one wealth to another.
Total Wealth = Farmer + Grocery + Juan
2,100,000 = 600,000 (money) + 1,000,000 (money) + 500,000 (food)

Ngayon, nilamon ni Juan ang lahat.

Effect: Bumaba ang wealth
Total Wealth = Farmer + Grocery + Juan
1,600,000 = 600,000 (money) + 1,000,000 (money) + 0 (tae)
« Last Edit: May 31, 2011, 09:49 AM by neo »


richpulubi

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pinoy abroad, I thought the same as you for a time, but neo is more correct.  Wealth is also CONSUMED.  Like our natural resources like oil and food, it is limited.  And so, when it is consumed, it is no longer wealth.  Even if you say you paid for that food with money, if there is less and less food, then you'd need more and more money to pay for food. 

Therefore, wealth can be destroyed when we consume our natural resources.


allanmm13

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If wealth cannot be destroyed, then where did the TRILLIONS of dollars that were lost in the Great Recession go?  Shouldn't that money have gone somewhere?  Where did the money Lehman, Fannie Mae, Freddie Mac, Citigroup, and the hundreds and hundreds of banks that closed go?

@RP, they were remove from their balance sheet, in accounting they call it Write off. Unfortunetly for Lehman kasama siya nabangkarote.
http://en.wikipedia.org/wiki/Write-off

There's a conspiracy theory about this.

Since they remove this on their balance sheet, they seek help from the US govt.. Kaya me 780$B pump by the US govt to save those companies.

Where did US Govt get that 780$B? Borrowed from Federal Reserve (a private company).

Where did FedRes get that 780$B? They printed it. So they create money out of thin air.

Ano arrangement nila don? Of course the US govt needs to pay back the FedRes with principal + interest. That's why US citizen are burden now with this loan for many years to come (via taxes from their govt).

Now a wealthy person 10 years ago with let say Php1M is not the same with a person today with Php1M.
Noon 1M can buy you alot, now 1M can buy you little.

Technically, wealth was in the same amount of money (or mas appropriate sabihin eh currency), but the value changes.
The currency was devalued because the financial system can print Unlimited Supply of Money. 

This is the FIAT currency na ginagamit ng lahat ng pera sa mundo.




neo

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Opportunity is definitely NOT wealth.

Now, if I will follow your logic then, Juan should also have the opportunity to earn another million. So, the wealth increases and thus,

3,100,000 = 600,000 (money) +1,000,000 (money) + 0 (tae) + 500,000 ( opportunity for farmer) + 1,000,000 (Opportunity of Juan)

Definitely not logical.

Now, should the farmer nor Juan take the opportunity,  and the grocery is not willing to take it, then, where does the wealth go?

Let make it narrower.

Wealth = Adam + Eve
200 = 100 lambs + 100 cows

When all the cows of Eve died, where do the 100 wealth go?

Paano kung si Adan lang ang tao sa mundo? At tupa lang ang hayop sa mundo?

Wealth = Adam
100 = 100 lambs

Tapos, namatay lahat ng tupa nya? Nasaaan na-convert
ang wealth?

Because with this the opportunity for farmer have another  500,000 will be there again.. no transfer of wealth if Juan will not consume more.

Total wealth=Farmer + grocery + Juan + opportunity for farmer
2,1000,000=600,000 (money) +1,000,000 (money) + 0 (tae) + 500,000 ( opportunity for farmer)

So if Juan consume 700,000, then Farmer will have opportunity to have 700,000 by selling more goods..Therefore wealth remains the same..
Question, paano nyo naman po nasabing 500,000 lang ang opportunity ng farmer considering he have higher wealth now? Hindi rin ba siya pwedeng mag-produce ng mas lower?
« Last Edit: May 31, 2011, 01:01 PM by neo »


richpulubi

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...medyo hindi ko magets...

And there IS a limit to how much we can stretch our natural resources.  I suggest you read the book 'Collapse', wherein past civilizations like Easter Island, Anasazi, Greenland Vikings, Maya, and even middle eastern civilizations that appear in the bible, go extinct primarily due to exhausted natural resources.  And so, their 'wealth' is consumed.  Their 'wealth' is destroyed.



richpulubi

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So, where did the wealth of Zuckerburg come from? Who became billions of dollars poorer?


richpulubi

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Why are they giving away their wealth?  Cuz it isn't the money that they worked so hard for.  It was to change the world, to create something so valuable that people need.  Even when they have given so much away, THEY'RE STILL VERY RICH! There was no belief in creating a balance.  Only a need to help more people.

One thing you don't want to accept is the fault in your premise that wealth is a finite, indestructible object.  That it is just passed from one person to another.

My premise...actually EVERYONE ELSE'S premise is that wealth CAN be created and can be destroyed.  Created by inventing new things, and destroyed by consuming these items, or these items becoming obsolete(like the Betamax).

If you still do not see the light...then let us just agree to disagree.


 


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