Someone bargaining to buy a melon at a market can negotiate a price with the seller. Then the next buyer may negotiate a better price. You could record that the price of melons has fallen. However, all of the melons and all of the currency in the transactions is accounted for. Nothing has been lost.
Comment on $1.8 trillion was wiped out from the US stock market yesterday, where did it go?
SpaceNoodle@lemmy.world 1 day agoHow is it a zero sum game if prices can just go up or down almost arbitrarily?
workerONE@lemmy.world 1 day ago
SpaceNoodle@lemmy.world 1 day ago
Sure, but there’s nothing material actually backing the stocks.
anton@lemmy.blahaj.zone 10 hours ago
Because the main way money moves in and out is by people buying in and cashing out. If no company injected more (by dividends and stock buy backs) and no company took money out (by IPOs, funding rounds or stock options), it would just be a box people would put money in and get money out.
ln that case it would be a zero sum game, because every dollar taken out by someone was put in by someone else, but because there is a flimsy connection to companies creating/extracting value in the real world it is not.