I was looking at it from one asset class to make it simple. If the OP understands that prices are set at the margin he will have his answer.
I see what you are saying so lets try to look at it. Say you buy a house for 100k before the bubble and sell it for 200k during the bubble and you profit 100k. Sure we all know the guy that bought your house is going to default and the bank will be on the hook for it, but what did YOU do with that extra 100k? maybe you bought a brand new 30k car and paid cash! That 30k went to pay the car salesman, the factory workers that made the car, the chinese people that make the parts for the car, the OTHER chinese people that dug the iron out of the ground to make the parts that were sold to the factory to make the car that you bought and so on. So basically you could say that your money went to china.
===================== Good balanced comments bb. Even the winners lost some; Asian cans of pineapples went from $0.69 to $0.99,[US dollars] tomatoes did much the same.......past 12 month or so. Of course , if your pineapple exspenses are smaller than stock/RE gains, or you have a few homegrown tomatoes to sell or eat, I say you are still a winner. And even those who did not sell @ the top, some made money, because thier cost basis was low.Wealth wasnt necessarly destroyed there .Could sell [to open a position] that a fund sold to close, could be win/win there...... And even though Dave Ramsey admitted {FOX} he lost money buying buying stocks early; since its in his retirement fund, maybe, maybe not a loss, long term.
Hmmm, it seems to me that a lot of people here have missed the REAL enemy and the missing phantom!!! The better question is...what happened to the missing INTEREST and INTEREST PAYMENTS. Much of the "wealth" generated throughout this "boom" was from "interest." The real problem lies in the fact that a $100K loan will generally purchase $100K's worth of real materials in the REAL world. The problem for our economy now is what the banks were "banking on" - the interest payments...which contributed a HUGE amount to the "missing money" - the "wealth creation" from thin air...now promised into 401Ks, mutual funds, REITs, etc. -gastropod
The "conjured up part" was the "interest" - the interest was NOT part of the real economy - monetary base. The "interest" is the thing that has to be created from nowhere! A $100K loan over 30 year may cost $300K when payed off - where did the "other $200K" go? With the "time value of money" many of the banks got rich selling off that "future interest" for real money!!! What did the banks do with the "future interest"? That is the bigger question being avoided here on this board. -gastropod