3 ms·
I short, an asset (whether a stock, a house, or a bar of gold) only has any meaningful economic value if you can actually sell it in exchange for traditional cu
by drcode 9y ago
I short, an asset (whether a stock, a house, or a bar of gold) only has any meaningful economic value if you can actually sell it in exchange for traditional currency.
Stock markets make it easy to sell your stocks- If you can't sell a stock it's just a useless piece of paper.
- boxy310 9y agoFurther: before stock markets had a relatively clear bid-ask price range, everyday people would treat stocks as the same as paper currency (which was also relatively new at the time). This led to inflationary bubbles and crashes. The John Law Mississippi Company bubble in early 18th century France caused a significant economic crash, which exacerbated the economic situation leading up to the French Revolution a good 70 years later.