>> If it is worth less relative to other goods and services, part of its value destroyed and that much of your wealth is gone. <<
But that’s just it; the article describes the entire system, and it is a closed system. If it said, “Global crisis has destroyed 40pc of the UNITED STATES’ wealth,” we could discuss how our wealth changed relative to, say, China. But China’s been just as badly hurt.
If the value of your house drops in half, or $200,000, you’re out $200,000... but I can now purchase your home for $200,000 less, so I gain.
The loss in the world’s wealth is that the economic output of the world did shrink considerably in the fourth quarter. I think I read S. Korea’s shrank by 22 percent! ( at an annual rate, so even that’s only 5.5%) That loss is real; we produced less than we had been producing, and we kept on consuming. And the disruption to our fiscal systems may certainly mean a drag on our future production for years to come... but we did not lose much of our current wealth.