Think about it like this. A massive company is about to go

Posted on: December 16, 2020 at 22:05:03 CT

under because it is way under capitalized and cannot get short term funding for day to day operations. That company had issued shares in the past, whose value would be wiped out if the company goes under.

An investor appears. One with taxing power over 330 million people and can print its own money.

That investor tells the company it will give them $45 billion in exchange for creation of new shares at an agreed upon price value. Current shareholders don't care theirs will be devalued in the short term as it will keep the value from being completely wiped out.

That $45 billion investment keeps the company afloat through its crisis and profitability recovers to normal. But that company never pays me money back. Instead, with profitability restored and thus share value recovered, I start selling off the shares I own to other investors. When I have cleared my books of all the shares, I got $48 billion for them.

This company then says the paid me back in full plus interest.

Did they pay me back if I didn't see a dime from them? The $48 billion I have now came from people buying stock from me. Not the company.