this is my new metaphor, and i'm sticking with it
Two articles that are well worth reading.We pumped a souffle massively full of air. And now the air is leaking out, and the souffle is deflating, and our pundits and politicians are screaming that, my god, WE'RE LOSING ALL OUR EGG AND CHEESE, WE'LL ALL STARVE AND DIE!!!!!!
We're not. We won't. It was fake wealth. The world produces $50 trillion dollars worth of actual financial value every year; outstanding financial derivatives had a paper value of $400 trillion. The financial industry created pieces of paper that they could sell to each other, pretended the printing of the paper created value, and bought some hookers and swank Connecticut mansions with it. It was paper. P-A-P-E-R, capital-p and some other letters behind it. Fuck it, fuck them, stop the government printing presses, stop handing out Monopoly money to every corporation that poormouths at the Treasury, watch the deleveraging, have some lunch, take a walk. Drink a beer. Nobody's fucked but the bankers. There will be a constriction of credit, which means that inflation will moderate and your paycheck will be worth something. You can pay cash, and live to tell about it. The crisis will only come if we bring it on. Worst possible step: Demanding that Congress do something. Because they will. They'll do lots of something. And then we're really fucked.
We're in real trouble, folks -- quickly, somebody get Steve King and Jane Harman in here! We need them to take bold action with the very foundation of our economy!
Fuuuuuuuuuuck.
posted by Chris Bray @ 11:50 AM
1 Comments:
I have a pet peeve about people talking about gold as a measure of solid value as they do at one point in the second article. They always count from 1970, when gold prices were artificially low, run the "investment" through the hyper-inflation of the 1970s, and count to a peak when prices are temporarily inflated by flight from other investments ("At the time of writing, with gold trading at $900 an ounce"). They then state or imply that this shows that gold is more real than other investments or is intrinsically more secure. If the author had counted from 1980 instead of 1970 (not the crazy peak of $850/oz at the beginning of the year but an average value for that year), even going to the $900/oz peak mentioned the investment would have gained only about 50% over the course of over a quarter of a century, compared to an increase of 800 to 900% in even the "devastated" DOW. And just since this article was written, the price of gold has fallen by 18% but we don't hear about some tremendous crash related to irresponsible gold investing.
I understand that this wasn't their primary point at all but, like repeating the claim that private industry is always more efficient than government, promoting false claims makes us all just a little bit stupider and leads to sometimes disastrous policies.
Post a Comment
Subscribe to Post Comments [Atom]
<< Home