Here is how economies really work in a nutshell. This is an extremely obvious economic fact that most people completely forget. If people work together in harmony value is created. If people fight among one another value is destroyed.
Nothing in the world we perceive is in itself of value at all. Only those things that at least two people agree are of value become worth something. Ponder this forcefully for a moment. Is gold really of value at all? It is just an inert metal. There are tribal societies who do not perceive any value whatsoever in gold. You can't eat it, drink it, or smoke it so it definitely does not directly change the way you feel. The only reason it is value is because people in general say so!
I was listening to a lecturer who is extremely competent at changing people's belief systems. I was amazed to hear him talk about the creation of fiat currency, money that is not backed by a physical commodity, as a bad thing. This to me was impressive. Here was a very intelligent person implying that an inert metal was somehow valuable in itself completely oblivious to the fact that the gold standard caused as many problems as it solved for country economies!
The gold standard did impose a common standard of value for all national currencies that gave some stability to international trade and investment, dampened interest rate fluctuations, and stimulated the expansion of commerce and investment abroad. In addition the gold standard imposed economic discipline on a country but these advantages were offset by a number of limitations such as the necessary maintenance of free trade, restriction of a country's money supply by its gold stock making a nation unable to respond to problems of lagging economic growth or rising unemployment.
Now I want you to ponder the stock market. If gold has no inherent value then of what value is a stock? Again, a share of a stock is only of valuable if at least two people consider it valuable. Stock market pundits push things like earnings and healthy financial statements both of which are subject to creative reporting within legal yet wide accounting standards.
Inside corporate executive have been caught red handed in the last few years cooking the books making estimates of any fundamental share value highly circumspect. Again, it all goes back to whether there are more people buying or selling a company's stock and executive corporate insiders with their gifted stock options are the biggest beneficiaries of the corrupt Wall Street machine.
Corporate America owns the American media. Executive insiders control corporate America. Don't let Wall Street fool you into thinking that the path to stock market investing riches is through laborious financial analysis because it is a fool's journey. Learn to read how the public's emotions in the stock market are being manipulated by unseen corporate forces and you will have the best shot at coming out way ahead!
Nothing in the world we perceive is in itself of value at all. Only those things that at least two people agree are of value become worth something. Ponder this forcefully for a moment. Is gold really of value at all? It is just an inert metal. There are tribal societies who do not perceive any value whatsoever in gold. You can't eat it, drink it, or smoke it so it definitely does not directly change the way you feel. The only reason it is value is because people in general say so!
I was listening to a lecturer who is extremely competent at changing people's belief systems. I was amazed to hear him talk about the creation of fiat currency, money that is not backed by a physical commodity, as a bad thing. This to me was impressive. Here was a very intelligent person implying that an inert metal was somehow valuable in itself completely oblivious to the fact that the gold standard caused as many problems as it solved for country economies!
The gold standard did impose a common standard of value for all national currencies that gave some stability to international trade and investment, dampened interest rate fluctuations, and stimulated the expansion of commerce and investment abroad. In addition the gold standard imposed economic discipline on a country but these advantages were offset by a number of limitations such as the necessary maintenance of free trade, restriction of a country's money supply by its gold stock making a nation unable to respond to problems of lagging economic growth or rising unemployment.
Now I want you to ponder the stock market. If gold has no inherent value then of what value is a stock? Again, a share of a stock is only of valuable if at least two people consider it valuable. Stock market pundits push things like earnings and healthy financial statements both of which are subject to creative reporting within legal yet wide accounting standards.
Inside corporate executive have been caught red handed in the last few years cooking the books making estimates of any fundamental share value highly circumspect. Again, it all goes back to whether there are more people buying or selling a company's stock and executive corporate insiders with their gifted stock options are the biggest beneficiaries of the corrupt Wall Street machine.
Corporate America owns the American media. Executive insiders control corporate America. Don't let Wall Street fool you into thinking that the path to stock market investing riches is through laborious financial analysis because it is a fool's journey. Learn to read how the public's emotions in the stock market are being manipulated by unseen corporate forces and you will have the best shot at coming out way ahead!
No comments:
Post a Comment