Just playing.
The markets are doing what the markets do - being a dick.
I guess that is because markets are generally dick-tated by a handful of the largest investors and exchanges, and they are only looking for one thing.
Profit.
Of course, we are all looking for profit on our investments, but the level we expect is likely different, especially considering the risk. However, it isn't always the more invested, the higher the risk, because with enough, low return investments can yield far more than low amounts in high risk-reward models.
I was talking to my colleague/ coach at work about financial health today, and we got onto the conversation of investing percentages. The problem is that someone who doesn't have much, no matter how hard they scrimp and save and try, can never compete with someone who has significantly more. For instance, if a person can invest 100 a week for ~5000 a year and gain 10% on top, they will have 5500 - for a profit of 500. However, If another person can put in a thousand a week and attract 5% in a low-risk vehicle, they are going to get ~2500 profit, for a 5x volume over the first.
What this means is that those with a lot can play it very conservatively, and still take an increasing amount of the growth. And this is part of what is happening in terms of the widening wealth gap, where because the majority of the value goes to those who already have the majority of the value at a higher rate than those who don't, there is no way to "catch" the leaders, but instead, there is continual falling back in relation to them.
The economy is engineered this way, and as such, it is always going to crash. People see the economy crashing as some kind of natural occurrence, but we tend- to forget that the financial economy is an engineered environment, made with unnatural laws and legislation.
If we were looking at the natural economy, it never crashes, as it is always perfectly balanced by natural laws, like energy cannot be created or destroyed. Energy laws are like a perfect and apparently unhackable blockchain that handles energy transactions - No matter what energy is spent and how, it is always transferred with absolute efficiency, and the balance sheet always equals zero.
Nothing gained, nothing lost.
That is not the economy as we have designed it and not only that, we have made it even worse by shifting value away from physical resources and services, into things like the derivative markets, where over half of the world's "wealth" lays in a largely unregulated black box. They can't even accurately estimate the value, due to all the OTC trades. But, what this means is that financial value can be derived from activities that have nothing really behind it. This means that wealth can be generated out of "thin air", like creating energy out of nothing. Laws of nature say it is impossible, man-made laws of economics, says it is perfectly doable.
And this is part of the reason why the economy crashes, despite diversified consumption not necessarily changing that much. Sure, if China stops building, iron ore prices will fall in Australia, but there is no reason for global financial crises, when average consumption actually doesn't change that much, it just shifts where and on what the financial energy is getting spent.
But, inject "engineered energy" in to the system, and things get out of whack very fast. If you imagine if there are ten people with 100 marbles spread evenly among them that they trade for goods and services. In time, there will likely be a couple of people who start to have more marbles than others. However, if then in order to replenish the game, another 100 marbles were injected into the economy, based on what people already hold, what happens? Firstly, those with the most will get more of the share, and then they will also be able to invest into their business offerings to better capture what the others get, until the others run out again, and need to be topped up.
We are continually "topping up" the economy, under the guise of increasing wealth, even though our purchasing power is decreasing, and will effectively continue to do so. It has to, because in order for the corporations to make more percentage profit year after year, they have to extract it from somewhere, and what ends up happening is that the "value for money" of goods go does down. We pay more, to get less. It is like "shrinkflation" where they charge more for a packet of food, but put less food in the packet. This keeps their profits up, but we still eat the same amount, so we either have to eat less (we could probably do with that on average), or buy more.
And, we tend to buy more, the corporations make more profits, the shareholders make more gains on their investments, and the average person gets that much poorer. It doesn't matter how much money they have, because "wealth" can't be measured by how much money a person has in their pocket, it has to be measured by what they can buy with that money. They measure poverty on a baseline of a dollar amount - but is it a good measure?
The economy is broken.
It is not broken because economics is broken, it is broken because legislation is broken, and rather than destroying a deeply flawed system and starting again from scratch, the wealthy and the politicians will maintain an imbalanced system because it favors them. There isn't a cabal that decides this, it is just the drive of misaligned economic incentives. It will continue to get more and more out of shape, until it collapses under its own weight, and then there will be a reset. Not one that actually makes a difference, just one that respawns the economy back to a point where the game can start again.
Clowns.
Taraz
[ Gen1: Hive ]
