So where has all the money gone?

I guess this article will prove that I didn't learn much when I did economics at school!
Where has all the money gone?
We receive money, both individually and as nations, when we do a job or sell something or provide a service. We pay out money when we buy goods or services. This suggest that if the money goes out of my pocket, it goes into someone else's. On a global scale, surely it means that if one country is spending the money, another country is receiving it.
This is the basis for my simplistic view that money is like the tide. If it's out here, it must be in somewhere else!
So how can there be a global recession?
Is there a country somewhere receiving lots of money and then burning it as fuel? I just can't get my head around it.
I just know that the news this week that the UK may not get out of debt until 2018 at the earliest is very bad news.
Everything has gone topsy-turvy in the world. How can you be in boom one year then just a few years later be in recession? How did it happen? What changed and why did no one see it coming?
My final mind-boggling question is, "Is it real/true anyway?" (I know- I'm beginning to sound like a conspiracy theorist!)
Take people I know. Essentially life is the same as it was before, except that they are more worried about the future, financially, and less inclined to spend money. This leads to a reduction in sales and demand for services, which affects businesses. Those businesses become worried about the future financially and start to reduce their workforce. People lose their jobs and it gets in the paper and on the TV. Then my friends and neighbours read the news and become more fearful about the future and the whole thing goes round in a self fulfilling prophecy loop. So who started the loop and on what basis?

I suppose I am not really questioning whether there is a recession- the evidence is all around me BUT I just can't help wondering what it all really means...........................