I'm still have trouble wrapping my head around how Materia is a gil sink. Sure the item is gone, and you lose all selling power, but the money you invested to buy it in the first place is still circulating with whomever sold it to you.

I've always assumed that Gil Sinks is something that would take Money out the system entirely, such as buying from an NPC, Retainer stalls and taxes, and Airship fees.