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What's a financial instrument ? Usually a debt (a stock, a bond) which makes others live. Even to buy a house you need to give money to someone else who uses it
by xwolfi 5y ago
What's a financial instrument ? Usually a debt (a stock, a bond) which makes others live. Even to buy a house you need to give money to someone else who uses it for their own retirement or whatbot.
If the millionaire receives gold and bury it in his garden, sure, but if he puts it in a bank or an instrument, chances are you're paid by it.
And sure, giving money to non value added non productive endeavour like you propose works, but who gives this money? Wait a bit eventually all people do is pay taxes to receive money to pay taxes: you need an escape valve, something more valuable to happen, than just feeding hoboes with money.
But granted, trickle down has never been hosing down. A trickle it is and it's better if you can produce clear visible value that compensate you even if millionaires arent involved. Like say, make bread or cut hair...
- Applejinx 5y agoThe cleverest people around have gone into finance to invent instruments that are ever more abstract, specifically to avoid tying finance to inconvenient, fallible things like… business. It all has to perform way better than anything tangible could hope to do, and this starves out the type of investing to which you refer. Newest example: crypto. Like burying capital in pure abstractions, except they pollute (which gold doesn't)
- ianai 5y agoGold does pollute-but it’s probably a lot less polluting once it’s out of the ground. You make an excellent point about modern finance. Increasingly to me it seems modern finance should be considered for its affects on money supply and finance not dissimilar to actions of central banks and certain government spending. It’s probably gone unnoticed largely exactly because the corporate finance machinations are not anywhere near as visible and widely disclosed at a Fed decision.
- thinkcontext 5y ago> Gold does pollute-but it’s probably a lot less polluting once it’s out of the ground. How could you possibly think that? Most gold today is produced through hard rock mining, which involves either enormous pits or tunnels. Many tons of ore is crushed and processed with either cyanide or mercury to get a few grams of gold.
- ianai 5y agoYou’re arguing over definition. “Out of the ground” implies processing/refinement. Once it’s truly out of the ground it’s stored in a vault in elemental form or something similar. Look it’s the internet. I know we all want to pretend that we’re super pedantic lawyers. Oh wait. I never agreed to those terms.
- p_l 5y agoThe very point of capitalism is to separate as much the act of making money from anything that isn't money itself.
- romwell 5y agoCitation needed for "make others live". You're just saying "trickle down akShUaLLy works", you do realize that, right? The effect of investing in financial instruments is effectively the same as burying gold (as the study shows). My citation is TFA. Bonus: tell me again who gets to "live" from someone shorting Tesla stock on the dip. Side note: your houses argument is cute. In this case, we should just buy that house and cut the middle (billionaire) man out. The only thing the billionaire can do with the house is either rent (taking money out of the economy) or sell (and we're back where we started, minus whatever profit they made). So clearly, a better move is to pay someone to give up their house (retirement money), and let someone else live there rent-free. While we're at that, instead of having the rich person buy stock (and pay for seller's retirement), we should buy that stock ourselves, since it's the same effect. Congratulations! We now have socialized housing and nationalized corporations. Welcome to the Socialist States of America! TL;DR: if trickle-down works, The Man should own everything. Strangely, Reagan wasn't a fan. Huh.