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this post was submitted on 06 Aug 2023
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Today I Learned (TIL)
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Define ‘real dollars’ lol. Most money is just numbers on a spreadsheet.
Value of stocks is what they think people will pay, but if nobody wants to buy they are worth nothing. If stocks can change in value in fractions of seconds, they have no actual monetary worth, so nothing was lost and nothing was gained during this dip and recovery.
Blah blah if you squint enough the same is true of paper money and lending, but that at least has some monetary banking while stocks are purely at a moments whim.
You see, the problem with your argument is that stock isn’t money, it’s an asset. While you can call the asset itself bogus, the money backing it is ‘real’; that’s why entire life savings can be wiped out if the market suddenly goes ‘kaput’.
So you are also saying that stocks are not real dollars. Glad we agree.
Stocks aren’t money to begin with, they’re an asset class. The money invested in stocks is as real as any other dollar though.