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Originally Posted by aceventura3
Monetized wealth or however you state it, is meaningless. The financial crisis is a perfect example illustrating how wealth measured in fiat currency can change in an instant. One day a guy has millions of dollars of wealth in real estate and the next day it is zero or negative.
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It isn't just a problem with fiat currency. Tying currency to a finite resource effectively places a cap on the amount of wealth a currency can represent. Shit, even if we're talking a barter-based economy - having something of value to trade with no demand is functionally equivalent to having nothing at all. Illiquid assets are pretty much worthless for anything but prettying up a balance sheet.
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I think that view is too narrow.
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That's economics for you.
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They are not investing because of excessive and unknown risks due to political uncertainty. For people who invest capital it mostly boils down to math. Eliminate uncertainty, reduce risk and the results from the equations change, making it attractive to invest.
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You're right that capital investors are driven by math. One reason these folks haven't invested in more jobs is because they've done the math and demand isn't there to justify hiring more people to produce more produce. All this nonsense about political uncertainty is bullshit. Political uncertainty always exists.
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Give an example of when demand drives real wealth creation. The printing press was mentioned in this thread. At the time there was no demand for books. when the record player was invented, there was no demand for records. When the PC was invented there was no demand for PC's. When Facebook started there was no demand for Facebook!
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Right, and if after the printing press was created there continued to be no demand for books, then we wouldn't be talking about printing presses. If after the record player was invented there continued to be no demand for record players, then we wouldn't be talking about record players. If after PCs were invented there continued to be no demand for PCs, we wouldn't be having this conversation right now. You get the point. In each instance, it wasn't the creation of a new product that instantiated wealth, it was the demand for that product, along with an adequate market to allow for the exchange of that product for money.
In terms of real value, ie, worth in terms of sandwiches and rent, a brilliant idea is worthless if no one wants it and if you can't convince people to pay for it. Hence, demand.