Well, what’s already happening is circular self-contained greed “economies” were money (not actual wealth just value-tokens such as money but also assets which have valuations expressed in said value-tokens, from crypto coins to realestate and stocks) is made from merely money being passed around whilst no actual value is created (in fact, value is mainly destroyed as those things are consuming actual resources to produce no real value at all, only boost the count of value-tokens)
This is destroying the capability of currently accepted value-tokens to actual represent an underlying utility value.
In other words, thing like stocks but also things like currency are decoupling from the underlying value they used to represent:
Stocks were a share of ownership in a structure - the company - that created things, either directly - manufacturing, extraction - or indirectly by increasing the efficiency of direct value creation - i.e. services that indirectly made manufacturing or extraction more efficient or helped in distributing the products of those - whilst nowadays the most “valuable” by market capitalization of stocks have almost purely speculative valuations or are for companies in rent-seeking activities which don’t create value but merely take a share of the value created by others.
Currency used to be (and still is to a large extent) value tokens which were a claim on the value produced by the Economy. What we’re seeing is that as more of those value tokens are created in those circular “economies” each token can claim less and less quyantities of the traditional underlying value things - just notice food inflation. Also rent-seeking activities (such as realestate investment) have even faster devalued how much each value-token can claim. Whilst official Inflation numbers don’t tell us this story (there is a strong motivation for politicians to have Officially recognized Inflation be lower than reality, because Mathematically that makes GDP seem larger), most people are actually feeling the real Inflation, especially in the most ancient and required concrete assets: Food and Housing.
I expect that something is going to break, though I don’t know when and exactly how it’s going to materialized (though the way the ultra-wealthy are trying to transform the powers they captured from Democratic to Autocratic, leads me to believe that they’re preparing for a break in the functioning of the current value-tokens by having a more direct control over just about everything than indirectly by merelly holding lots of value-tokens).
The societal consequences of the value-representation structures we have (literally, of thing like money, stocks and even certificates of ownership) unwinding would be huge.
money… is made from merely money being passed around whilst no actual value is created
Crypto is a zero-sum game, so money is never “made,” it’s exchanged. So if one person does well, another person must do poorly. That’s the same for stocks, though stocks are a bit different in that the stock price includes the actual, physical assets a company owns.
Real estate isn’t. When real estate increases in value, that doesn’t mean another property decreased in value, it just means people value that property more today than in the past. This could be due to limited supply (there are only so many plots a geographic area) or renovations, meaning its intrinsic value changes (higher expected rents), therefore it’s not a zero sum game.
So you really need to define what “wealth” is if you’re going to lump real estate in with stocks and crypto currency.
Stocks were a share of ownership in a structure
They still are. The stock price includes the intrinsic value of the company, as well as expected future growth in its intrinsic value. It’s that expected future growth that is doing a lot of work here, and it’s why companies like Palantir can trade at ~1700 times earnings when a “normal” company would be around 10-20x (for reference, Nvidia trades around 50 times earnings, Johnson and Johnson is around 20), people expect Palantir to grow way faster than “normal” companies.
Expected future growth has always been a part of that equation, that’s not new. What is new is the amount of hype around certain stocks, and that probably has more to do with the news cycle (people have access to information way quicker than 50 years ago or even 20 years ago).
each token can claim less and less quyantities of the traditional underlying value things - just notice food inflation.
Inflation has also been a thing as long as fiat currencies have been a thing. The target has been 2%, and the average between 1913 and 2020 was about 3.6% (source; I took the total 2555% and divided it by the 87 years of that period).
Whilst official Inflation numbers don’t tell us this story
Do you have evidence of that? The CPI the US uses has been criticized for various reasons, but it’s still the official measure used, and there’s a good reason for that: it’s pretty good.
Things like housing are very location-dependent, so changes in one region won’t really reflect on overall inflation figures if other areas aren’t experiencing that as well. But if you look at expenditure figures using percentages of peoples’ incomes, housing stays relatively constant in overall percent, which is around 30%. Again, these are national numbers, things may certainly vary by region, since areas like LA will be quite a bit different than rural Texas.
The societal consequences of the value-representation structures we have (literally, of thing like money, stocks and even certificates of ownership) unwinding would be huge.
Sure, if what you say is actually true. But I don’t think that’s the case. I think instead, salaries increases tend to trail inflation, and some people still haven’t yet caught up from the high inflation just after COVID. The averages look good, but that breaks down in individual cases.
Rents, for example, are starting to come down in my area (about 6.5% from last year), which was one of the hardest hit. A lot of the problem was due to new construction projects getting delayed due to COVID supply-chain disruption, and we’re finally catching up to where we should’ve been.
Well, what’s already happening is circular self-contained greed “economies” were money (not actual wealth just value-tokens such as money but also assets which have valuations expressed in said value-tokens, from crypto coins to realestate and stocks) is made from merely money being passed around whilst no actual value is created (in fact, value is mainly destroyed as those things are consuming actual resources to produce no real value at all, only boost the count of value-tokens)
This is destroying the capability of currently accepted value-tokens to actual represent an underlying utility value.
In other words, thing like stocks but also things like currency are decoupling from the underlying value they used to represent:
I expect that something is going to break, though I don’t know when and exactly how it’s going to materialized (though the way the ultra-wealthy are trying to transform the powers they captured from Democratic to Autocratic, leads me to believe that they’re preparing for a break in the functioning of the current value-tokens by having a more direct control over just about everything than indirectly by merelly holding lots of value-tokens).
The societal consequences of the value-representation structures we have (literally, of thing like money, stocks and even certificates of ownership) unwinding would be huge.
Crypto is a zero-sum game, so money is never “made,” it’s exchanged. So if one person does well, another person must do poorly. That’s the same for stocks, though stocks are a bit different in that the stock price includes the actual, physical assets a company owns.
Real estate isn’t. When real estate increases in value, that doesn’t mean another property decreased in value, it just means people value that property more today than in the past. This could be due to limited supply (there are only so many plots a geographic area) or renovations, meaning its intrinsic value changes (higher expected rents), therefore it’s not a zero sum game.
So you really need to define what “wealth” is if you’re going to lump real estate in with stocks and crypto currency.
They still are. The stock price includes the intrinsic value of the company, as well as expected future growth in its intrinsic value. It’s that expected future growth that is doing a lot of work here, and it’s why companies like Palantir can trade at ~1700 times earnings when a “normal” company would be around 10-20x (for reference, Nvidia trades around 50 times earnings, Johnson and Johnson is around 20), people expect Palantir to grow way faster than “normal” companies.
Expected future growth has always been a part of that equation, that’s not new. What is new is the amount of hype around certain stocks, and that probably has more to do with the news cycle (people have access to information way quicker than 50 years ago or even 20 years ago).
Inflation has also been a thing as long as fiat currencies have been a thing. The target has been 2%, and the average between 1913 and 2020 was about 3.6% (source; I took the total 2555% and divided it by the 87 years of that period).
Do you have evidence of that? The CPI the US uses has been criticized for various reasons, but it’s still the official measure used, and there’s a good reason for that: it’s pretty good.
Things like housing are very location-dependent, so changes in one region won’t really reflect on overall inflation figures if other areas aren’t experiencing that as well. But if you look at expenditure figures using percentages of peoples’ incomes, housing stays relatively constant in overall percent, which is around 30%. Again, these are national numbers, things may certainly vary by region, since areas like LA will be quite a bit different than rural Texas.
Sure, if what you say is actually true. But I don’t think that’s the case. I think instead, salaries increases tend to trail inflation, and some people still haven’t yet caught up from the high inflation just after COVID. The averages look good, but that breaks down in individual cases.
Rents, for example, are starting to come down in my area (about 6.5% from last year), which was one of the hardest hit. A lot of the problem was due to new construction projects getting delayed due to COVID supply-chain disruption, and we’re finally catching up to where we should’ve been.