[Homestead] The Piggy Bank is empty, Wall Street reacts
tvoivozd at infionline.net
Sat Sep 25 18:21:28 EDT 2004
Gene GeRue wrote:
> Two of our resident financial mavens:
>>> So Wall Street reacting to an empty Piggy Bank is unconvincing, Wall
>>> Street's piggy bank never had any actual coins to shake out on
>>> demand, it
>>> has been empty all along.
>>> ---you got that right, James---it's all an illusion---
> Good grief guys. Can't tell if you are serious or just having fun.
> There are impressionable people here.
> Public companies raise capital by selling their stock. Some of that
> capital is used to buy machinery, some for R&D, some is used to perk
> the top dogs. Some companies are managed well and return a profit to
> their stockholders. Some lose. That is life at all levels. There are
> stock market gamblers, including day traders, who operate much along
> the lines of Las Vegas gamblers, except the stock market house takes a
> smaller cut.
> I have always preferred real estate over stocks and am only mildly
> knowledgeable of how the stock market and monetary system work.
> Chris's 401k is invested in mutual funds managed by a large company,
> and she forces me to manage that account, so I have to know the stock
> market a bit. I don't like the short term fluctuations but have
> confidence in it long term. There are responsible and irresponsible
> managers in all fields. Trillions of American and foreign dollars are
> invested in American companies, and people who consider themselves
> very important and very rich make damn sure their investments are safe
> and continue to increase in value. Lots of money is made and lots more
> is lost, the latter usually through impatience and greed. Long-term
> stock market investment returns an average above inflation. I still
> like real estate better, not in the least because I am much more
> knowledgeable about it, but mostly because the product is becoming
> more scarce and the demand is rising. Until the computer revolution
> nearly all great wealth was founded and held in real estate. If Wall
> Street burns to the ground, the ground will still be there.
tvoivozhd---what James is saying and I will corroborate, it is lack of
personal experience to the contrary, that creates the illusion of
economic permanency---that can be shattered at any time, including the
illusion of permanancy of real estate. It looks like you are standing on
terra firma, but quicksand lurks underneath.
The expectation of making money on real estate, stocks and bonds seems
real, and may be for a time---whose duration is unknown and rarely
predictable---today a little more than against land-grabbing Mongolian
hordes, but more recent land-grabbing threats abound---doesn't have to
be riding on a Mongolian pony to wipe you out..
Twice I have had "money" and its short-lived purchasing power dissolve
in front of my eyes---a large Greek Drachma note and $30,000 of
silver-backed Dominican Pesos that the U.S. Government induced their
puppet Joaquin Balaguer to dishonor by devious means.
I have had a factory AND the real estate under it stolen at gunpoint by
the nephew of Papa Doc Duvalier who slept at Papa Doc's
feet---literally. Don't place too much faith in your "ownership" rights
to real estate in the United States either---Eminent Domain confiscation
is a frequent fact---and not just for verifiable public purpose, more
frequently of late it is to benefit politically heavy-hung
politician/developers---BANG, your "property rights", your supposedly
permanent real estate and your money is gone.
And the most fearsome threat to ANY illusory ownership today is that
your "investment" is represented by 1's and 0's on bank and government
computers---how's that for terra firma turning to quicksand?
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