The sub prime mortgage crisis wasn’t overblown. Most don’t realize how close we were to a financial meltdown. Think getting .75 a $1 on your money market fund and what type of chaos that would bring. We were right at that point. Hopefully lessons were learned, but I have my doubts. I’ve been in the investment industry 33 years and 08 was terrifying know how the sausage was made.
What you say is both true and not true. While we had a financial crisis, all the factories, warehouses, and offices of the real economy were still intact, and the workers were still there to produce goods and services with them. Money is a useful medium of exchange, but should not be confused with actual wealth.