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I voted you up, even though I don't know that I agree with your coming predictions. But I've been thinking about a similar topic tonight, as I read columnists

I voted you up, even though I don't know that I agree with your coming predictions. But I've been thinking about a similar topic tonight, as I read columnists and reporters talking about how complex financial instruments are these days and how no one really understands them. Because the basics of them aren't all that complicated. CDOs, CDSs. ETFs, whatever. None of them are particularly complex concepts. Anyone with a CS degree has mastered concepts many times more complex. I accept that the details get tricky, but the details of lots of things get tricky, and a lot of people make solid livings being responsible in managing tricky concepts. None of these financial instruments are magic. I'm a curious layman, I get the gist of all of it. And then there's people who claim their variable rate mortgage was too complicated to understand. Come now. So I was thinking that it's really just in everyone's interest to pretend this stuff is hard to understand, that it's complicated, that it's magic. Because then no one is responsible. And then, as the saying goes, was I enlightened. The housing bubble was easy to see. Everyone saw it. Many, perhaps most, ignored it. Because they wanted to. It let them gamble and not be responsible. From Joe Homebuyer to James J. Investmentbanker IV. Some things are complicated, sovereign bonds and currencies among them. There are many reasons that nearly all the powers that exist want to keep that music going, and they have many tools at their disposal. I honestly don't know what will happen there, which is why I'm not sure I agree with your predictions in those areas. There's real magic at work there, and it's one of the few areas where make-believe becomes reality. The US has a very strong hold on centrality in the global economy, and I can't see how it's cleanly broken without severely damaging anyone who has the power to break it. That's the magic part.

lzw 16y ago
Currencies are a really interesting thing. After I started to get into commodities and read up on the history of central banks-- the creature from jekyll island is a good book on the subject-- I found I started tobsee money fundamentally differently..... I see the paper in my wallet like i see the huge bundles of worthless notes from Zimbabwe.... Worthless. I know intellectually that I can exchange it, but knowing it's eventual and intrinsicev value changed my relationship with it. And in doing so, I realized just how strongly I'd been conditioned, emotionally, and thru rationalizations, to see this paper as money. Not sure if that resonates. One thing I'd like to also put yor ear is the idea of moral hazard. Even when everyone was in denial about the bubble, and trying to not be the greater fool, they had in the back of their heads the moral hazard.... Knwoing if it was really bad, they'd get bailed out by the government. Im not talking about banks, but about real estate agents and home buyers, etc...and they were right!

lzw 16y ago

Currencies are a really interesting thing. After I started to get into commodities and read up on the history of central banks-- the creature from jekyll island is a good book on the subject-- I found I started tobsee money fundamentally differently..... I see the paper in my wallet like i see the huge bundles of worthless notes from Zimbabwe.... Worthless. I know intellectually that I can exchange it, but knowing it's eventual and intrinsicev value changed my relationship with it. And in doing so, I realized just how strongly I'd been conditioned, emotionally, and thru rationalizations, to see this paper as money. Not sure if that resonates. One thing I'd like to also put yor ear is the idea of moral hazard. Even when everyone was in denial about the bubble, and trying to not be the greater fool, they had in the back of their heads the moral hazard.... Knwoing if it was really bad, they'd get bailed out by the government. Im not talking about banks, but about real estate agents and home buyers, etc...and they were right!