While having a discussion with a younger colleague, they asked me about investing. As mentioned by a few others, my take on the financial markets is the same – they are essentially broken, in a fundamental way. We can’t determine what anything is worth, so “investing” isn’t investing, it is gambling – the worst kind. Not that gambling is inherently bad; people do it all the time, but they know it is gambling – taking a measured risk for a measured reward. What is so bad about the way the system is constructed now is that people think they are investing, but they actually are gambling without knowing they are gambling.
We can blame the Fed for the mechanics of this, of course – they artificially set the actual interest rate, which is the most critical factor in determining whether an investment of any kind is financially viable. Since this is artificially set (and has been set close to zero for a long time), things are so out of whack, it’s difficult to tell where to even know where a price for anything might be.
- How do we get back to reality, in any human endeavour, even one as “simple” as finance?
- Will only a crash bring us back?
It’s been about two years now, since this blog was started on a weekly basis. No particularly grand ideas or overarching themes; just a variety of observations on a few interesting topics. A few times, a muse has struck and a longer essay has been written, maps are drawn, or flags sketched, but commentary has been relatively light. The basic tenets haven’t changed much, for sure.
Much needs to be done, and perhaps writing here isn’t the best use our resources. Yes, something strikes, a note will be written, but perhaps the well has run dry. Time to muse on future directions, and what should be done with our time.