4 ms·
Nevertheless we humans still think of things in terms of pots. The term "pension pot" comes to mind. The reality is the market value of anything is influenced
by nly 4y ago
Nevertheless we humans still think of things in terms of pots. The term "pension pot" comes to mind.
The reality is the market value of anything is influenced a great deal by human sentiment, as well as raw intrinsic properties of an underlying asset or the performance of a business.
Investors like to think they are actually "investing" in Google when they buy Alphabet shares even though not a single penny of their money is going to Google for the board to direct toward productive endeavours.
Even earned income in a savings account is an act of faith... in a system that we hope will continue to value an hour of our labour today to something close to what it will be a year from now. The savings account itself isn't a store of value, it's the nature of the labour market here that is actually the store of value.
- lexapro 4y agoIn the end everything is based on faith. You hope that in the future your stocks/bonds/cash/gold/crypto/bank account/real estate a) are still recognized as being yours and that b) some entity will be willing and able to exchange it for something of the same or higher value as you think it has now
- panarky 4y agoThe author states this myth perfectly: Every cryptocurrency is its own pot of money. When people sell, they are taking money out of the pot. When people buy, they are putting money into the pot. It's a popular myth but it's obviously bogus when you realize that for every buyer there is a seller. So when people buy a gold bar, or 100 shares of AAPL or a cabin at the lake, the money the buyer puts in is exactly offset by the money the seller takes out.