Price Value Is NOT always Rational

Hey Jessinvestors

In the overly financialised world, we live in today, price signals have been distorted by the ability to manipulate the supply of money and pump it into certain areas. The centralisation of money distribution and the accepted stance that money loses its value every year results in us living in a world with distorted price signals.

For those of us who have to work for it, money is a scarce asset; we can only acquire through the creation of goods or the providing of services, selling our time, skill, labour and ideas for financial reward.

On the other end of the spectrum, some use the money to make money and in doing so tend to end up with a lot of it, and as they hoard the money they earn, they have potential bigger losses due to inflation.

To counter this, they take what is in abundance, and put it into scarce assets.

The price you see is the right price

This frenzy to stuff currency into things that can not be replicated with the ease has seen money chasing scarcer and scarcer goods; this could be property in affluent areas, fine art, collectables and more. Have you ever wondered by apartments in New York are worth $40 000 000, fine art selling for 10's of millions, Pokemon cards selling for hundreds of thousands?

Fiat money makes those with money just as desperate to consume as those with fewer resources. While the middle-class chase things of perceived value and social status, the rich chase things with a perceived value that is held in high regard on the market.

It's not about the time put into creating the painting; it's not the architecture of the building or the address, it's all about how scarce the item is and the perceived value that scarcity can be worth, which is why these items sell for 10, 20 even 100 times the average years salary, even if it has no actionable or intrinsic real value.

The spread of price distortion

As the fiat Ponzi scheme continues to get bigger, it sucks more of the world into its price distortion field. It starts with upper-end things like fine art and real estate but later trickles down to things like collectables, stocks, financial assets like ETFs and derivates, and as more money gets pumped into the system.

These items while not changing much pick up more value as more money chases the ownership of these assets, anything that returns its value better than fiat will see a spike as we continue to create more money.

Its; why we see credit markets at all-time highs, stocks at all-time highs, bonds are at an all-time high, there is nothing measured in fiat that's not already at nose bleed levels.

The return of price discovery

In a world with more price distortion and us finding it hard to understand the value, we need a new measuring stick. While in the past bonds used to be the risk-free return on capital and seen as the truth, to me that is long gone, and the true reflection of the market is the price of Bitcoin.

In countries that have seen high inflation, places like Zimbabwe, Venezuela, Tanzania, citizens tend to look at goods and services priced in USD instead as its relative stability gives you a branch mark to see what a product should be worth in the global market and then working your way around that.

I think with all the fiat printing and price distortion, Bitcoin is actually the measuring stick now and continues to grow in importance. Bitcoin measures how healthy the world economy is and each price rise, as we may rejoice actually shows how global economies are dying.

You can measure Bitocin against any country in the world and get a measuring stick of how far along your currency is to collapse.

Prices aren't rational, its something we've made seems normal, which is why it's so hard to see through the fog.