Wednesday, February 03, 2021
HARDASS clarity
Wolfstreet is a reliable source of economic clarity. Wolf pulls together facts into the best graphs in the world, and always places numbers IN CONTEXT, which nobody else does. Wolf doesn't understand medical or scientific frauds, but he's the champion solver of purely economic crimes.
Another provider of economic clarity, at least within the intentionally confusing world of Quora, is Pascal Morimacil. He doesn't do graphs, but he has a way of stripping off nonsense to show the basic criminality of NYC.
Question: Where does the money go when stock markets crash?
Most of the answers go into pointless detail about nonexistent transfers of options and derivatives.
Pascal says:
The framing they use, along with most other people, is that when people dump their money into the stock market, it “creates wealth”. And then, when people try to take their money out? That “destroys wealth”. The reality is that no wealth was ever created. The money was gone as soon as you paid it. You didn’t realize it was gone until you tried to withdraw it, but that’s a different matter. When the stock market crashes, money doesn’t go anywhere. People simply realize that the money they previously paid is gone.Gone as soon as you paid it. That's the simple HARDASS truth, expressed in a sharp and memorable way. Before you move the money into NYC, it's value that you can trade for other value. You can spend it on food or clothing or charity or fun. At the exact moment when you move money into NYC, it simply ceases to exist. If you burn the cash, at least you can get some warmth. If you flush it down the toilet, you can get some exercise by plunging the clogged pipe. If you scatter it on the street, you can watch people gather it. None of these minor rewards happen when you put the money in NYC. It's simply nothing.
Labels: Answered better than asked, Metrology
¶ 11:17 PM
