Money, what is really going on with it?

I find that I spend inordinate amounts of time thinking about money and economics and trying to understand what is really happening in the world of finance. It all started in the middle of the 21st century when I saw the real estate market bubbling up. I had never been aware of a bubble before, and at first I did not realize that the real estate market was a bubble. All I knew is that homes were getting more and more expensive, and I was beginning to wonder if I was ever going to be able to afford one.

We all know what happened to the real estate market, and it turns out that the real estate bubble was just another mis-allocation of money. My curiosity was piqued so I set about trying to understand what happened. To this day, I still do not completely get it, and that is what this blog post is about. I am hoping that others might understand and be able to offer me some insights.

The real estate bubble, like the tech bubble before it was the result of the Federal Reserve making too much credit and "money" available to the world. After the tech bubble (the "dot com boom and bust") imploded in the early 2000s, the Federal Reserve and the United States government had a problem on their hands. This is where I believe the problem started. And this is what I need to understand.

As of late, I have been getting the sense that "money" on one level represents control. It represents the collective will of a few powerful interests. Now without going too far into conspiracy theories, it does not seem at all implausible that there are groups out there with access to resources who feel that they know what is best for everyone else in the world. Using the banks, the Federal Reserve and the United States government as fronts, they set about guiding the world for what they believe is the best.

In the late 1990s and early 2000s, it was decided that a global information system was needed. Resources were poured into the technology sector and many great technologies were invented. Stock prices went through the roof and lots of people made "money", but in the end the bubble burst. The technology companies served their uses and then the funding was withdrawn. At the end of the bubble, companies with no business plans were getting millions of dollars in funding based on the buzz around "the internet" and "technology". At that point it was too late. All of the big, important ideas had been invented and the resources needed to be moved.

It might be hard for some people to fathom, but there are a limited amount of resources on the planet. There is only so much food, so many raw materials, so much fuel, etc. At some point, money has to be tied to resources. That is what inflation is about. When too much money is printed, resources become too expensive. At some point, if resources become too too expensive, then society begins to break down because people cannot afford what they need to live. A balancing act is required. There needs to be enough money channeled into essential sectors to attract intelligent, capable people to perform the work that needs to be done. But, not everyone can earn a million plus dollars a year because then gas will be $250 a gallon and bread will be $50 a loaf.

It is said that the dot com crash destroyed $5 trillion dollars in equity. Likewise, it has been said that trillions of dollars could be lost as a result of the housing bubble. (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=amTFyi_htQvI)

So what is going on? We have trillions of dollars appearing and disappearing. In each cycle resources are allocated to a specific cause. First it was technology and the United States, and the world developed the internet and improved communications. Then it was the housing bubble, and millions of new homes were built. In 2005 alone, over 1.2 million new homes were sold.

I don't know. I need to put more thought into this. I think it's heading toward one world currency and a global financial reset. It has to get to the point where every country holds so much bad debt from every other country, that everyone can agree that it is too complex to sort everything out and the best way to move forward is to agree to forgive all debt... or, to roll over all debt into loans issued in a new currency.