The Price of Failure

Posted: September 14, 2015 in Monetary System, Statistics
Tags: ,

Image result for market price

Consider this presentation from MoneyWeek (and this article by the same presenter), as usual it’s their typical hard hitting, ‘do something since the world is fast going to pot’ scenario, however many valid points which readers of this blog should be familiar with;

Nearly everything you base your investment decisions on, from the value of the shares you buy, to the value of the home you live in… is based on a lie.

The global financial system is the most complex man-made structure in the universe. Millions of goods and services change hands between billions of people at trillions of prices. All in motion. All the time.

Let me put it this way: don’t you need trustworthy prices in order to make good financial decisions? How is it possible to plan your investments and take care of your family if you can’t trust the financial information on which you’re basing your decisions?

The answer is ‘you can’t. Bad information leads to bad decisions and a dysfunctional financial system.

But the fact is, we can pay our bills only as long as other people lend us money.

These arguments rightly call into question all notions of the efficiency of market information, or indeed the nature of the Market itself. If the information is false, then doesn’t such an entity become a propaganda machine, its only real purpose to keep pedaling the lie?

Does that even make sense? We can pay our bills ONLY IF people lend us money. That’s the ultimate deception: that we are rich but in truth we are totally broke.

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