If our consumption of information was analogous to food-diet, what diet plan would we be on? What is the informational equivalent of vegetarianism, veganism, paleo-carnivorism, or Old Roy dog chow? It is hard to see all the analogies. But one can be seen: most people are on an information-diet analogous to eating all of their food out of gas-station-convenience stores. That is, their informational junk food comes from the mainstream media, mainly television.
What a shame. The financial turmoil going on now should be an opportunity to ask fundamental questions about our banking and political systems. At the very least, the general public should learn how our system really works, not just in theory, but the brutal and unseemly realities of it.
Who is benefiting from the basic policies?
What are the incestuous relationships between banking and political power?
How do they hide it or at least deodorize it from the general public?
Why are the losers so complacent to the winners?
Why is debt held up as the magical path to prosperity?
How could the chairman of the Federal Reserve ever get such god-like powers in a country that sees itself as a "democracy" and a "republic"?
Could these bubbles and busts ever get so bad that the country reassesses its basic policies towards debt, banking, and political influence? Or will the crises just be used for a bigger dose of the policies that caused the problems in the first place?
From time to time I read editorials that make me think I have learned something fundamental about "our" money-and-power system. But the editorialist never has to answer questions from the other side, so it isn't really a genuine discussion. But at least it's not the informational junk food of minute-by-minute, play-by-play, ups-and-downs in the stock market.
What a shame. The financial turmoil going on now should be an opportunity to ask fundamental questions about our banking and political systems. At the very least, the general public should learn how our system really works, not just in theory, but the brutal and unseemly realities of it.
Who is benefiting from the basic policies?
What are the incestuous relationships between banking and political power?
How do they hide it or at least deodorize it from the general public?
Why are the losers so complacent to the winners?
Why is debt held up as the magical path to prosperity?
How could the chairman of the Federal Reserve ever get such god-like powers in a country that sees itself as a "democracy" and a "republic"?
Could these bubbles and busts ever get so bad that the country reassesses its basic policies towards debt, banking, and political influence? Or will the crises just be used for a bigger dose of the policies that caused the problems in the first place?
From time to time I read editorials that make me think I have learned something fundamental about "our" money-and-power system. But the editorialist never has to answer questions from the other side, so it isn't really a genuine discussion. But at least it's not the informational junk food of minute-by-minute, play-by-play, ups-and-downs in the stock market.
Comments
If the general public could come to grasp just this one principle that good old Ludwig presented that would be a huge step toward answering many of your questions.
"An increase in the quantity of money can no more increase the welfare of the members of a community, than a diminution of it can decrease their welfare."
The bottom line is that asset price is what pays. It pays your bills and funds your early retirement. Sometimes you need to suspend logic and invest illogically. After all, the markets can remain irrational longer than you can remain solvent. The trick is to avoid those reversion to the mean (to reality) events (1929, 1973, 1987, 2000, 2008, 20??).
In regards to bubbles and bust. John V notes the dates of these events in the last century. In my view it is no coincidence that we have had more of these since financial deregulation. We learned something in 1929 and put some rules in place. We learned something in 2008 but money's influence trumped good governing and the feeble effort of Dodd-Frank was effectively gutted and they are still working to do away with the rest of it.
Jim