[lbo-talk] Stock Markets vs the Real Economy

Bill Bartlett billbartlett at aapt.net.au
Wed Aug 10 00:33:05 PDT 2011


At 3:01 AM -0400 10/8/11, SA wrote:
>
>The answer is that it never stops. A dollar, once in circulation,
>basically never stops being in circulation. So it keeps going round
>and round.

Unless it falls into the hands of a collector. ;-) I have a couple of 19th century US silver dollars which met this fate, they thus dropped out of circulation permanently. I understand this same fate befell quite a lot of such coins, in fact it is the only thing that saved many old coins from being melted down.

Another exception is if the said dollar falls into the hands of a miser, a hoarder of money. A miser is distinct from a collector, in the sense that the miser is reluctant to spend his money because he values it too highly. Whereas the collector is happy to spend a fortune buying useless things, because he values money too little. But values things (like old coins, which he wouldn't dream of spending) too highly. ;-)

The one thing these people and the investor have in common of course is that they are all completely irrational. Which is why all forms of investment are essentially no more than gambling. You might as well put your spare money on black 13 at the casino as invest in shares. Since all investment decisions are made without a shred of commonsense, it is impossible to know what the future holds for them.

Speaking of shares, I came into a little package of shares in a bank recently, when the mutual credit union I had an account with de-mutualised. It makes me sick that it is even legal for that sort of thing to happen, and I know from experience that the bank was run by total incompetents. But none of that has any bearing on whether my lottery tickets (shares) appreciate or decline in value.

Bill Bartlett Bracknell Tas



More information about the lbo-talk mailing list