Where has all the trillions of dollars gone that has caused the global financial meltdown?

Answer 1

It was never 'there' to go away. The stockmarkets and banks work on credits and lending, but very often no real money changes hands. If I buy a stock at 100 dollars and it rises to 200 in value, I only get that if I sell at that price. If I hold onto my stock and the price drops then to 160, in theory I've lost 40 dollars - but if I actually sell at that price I would make 60. The fall in value actually reflects more on the 'value' of the company whose stock I hold. The shares the company holds itself lose value. but they don't lose any cash. Maxiogee is right the only thing keeping the whole thing juggling is confidence. When that goes the house of cards comes tumbling down.