Downpayment or Investments?

[holden]

Wealth may be denominated in dollars, but that doesn't mean you have to hold dollars to have wealth.

If I have $1M and use it all to buy a house, does that now mean I am worth 0?

Also, imagine there are 100 total shares of a company that were bought for $10 each. If the next time somebody trades a share and it is for $100, that would be the value for all 99 other shares. That is how market cap of a company is calculated. It's also how people like Mark Zuckerberg and Bill Gates are worth 10's of billions of dollars, without actually having it in the bank. They didn't necessarily gain all their wealth by taking it away from other people.

[Gestalt]

Stock market is the other fairy tale. It's like over selling a Delta flight, except no one cares, and actually cheers it.

But again, it's only worth anything if someone with money is willing to pay for it. That's capitalism 101.

It has no value otherwise, except as emocion.

You guys are drifting off into feel good slogans, and undefinable concepts.

I think health is wealth. Prove me wrong.

We are talking about money. It has a fixed quantity, Central banks create money. If you create it, it's called couterfeit. To get more, someone with it has to give it to you.

[Buster]

you aren't thinking deeply enough into the concepts behind "money" (which you are associating closely with "currency"). You think it's an undefinable concept because you haven't quite wrapped your head around it.

But people can define and trade wealth in many other ways. Some of the easiest to conceptualize might be, say, airline points. They aren't currency, but still have value. Gov'ts prefer for people to think that currency is a monopoly, but it really isn't.

[Gestalt]

Originally posted by Buster
you aren't thinking deeply enough into the concepts behind "money" (which you are associating closely with "currency&quot. You think it's an undefinable concept because you haven't quite wrapped your head around it.

But people can define and trade wealth in many other ways. Some of the easiest to conceptualize might be, say, airline points. They aren't currency, but still have value. Gov'ts prefer for people to think that currency is a monopoly, but it really isn't.

Stop talking down to me with your mumbo jumbo.

Money and currency are easily defined, I even gave you a link. You are just trying to muddy the water, because you don't understand it.

[holden]

Originally posted by Gestalt
Stock market is the other fairy tale. It's like over selling a Delta flight, except no one cares, and actually cheers it.

But again, it's only worth anything if someone with money is willing to pay for it. That's capitalism 101.

It has no value otherwise, except as emocion.

You guys are drifting off into feel good slogans, and undefinable concepts.

I think health is wealth. Prove me wrong.

We are talking about money. It has a fixed quantity, Central banks create money. If you create it, it's called couterfeit. To get more, someone with it has to give it to you.

But money itself is like the stock market, it only has the value that people perceive in it. If the world lost complete faith in the loonie and it became worthless, who would become the "winner" in that situation to balance all the "losers"?

[Buster]

Originally posted by Gestalt


Stop talking down to me with your mumbo jumbo.

Money and currency are easily defined, I even gave you a link. You are just trying to muddy the water, because you don't understand it.

I'm trying to help you up your knowledge level on this stuff. You seem interested and willing to learn. Otherwise I wouldn't put in the effort.

The ideas behind how capital flows (both from one person to another in the present, but also over time) and how currency - as a tool- fits into that framework is interesting stuff. It just seems like mumbo jumbo because you are thinking about all this stuff at a surface level. I'll give you an example. When a person from a country with a poorly functioning capital markets/capital systems moves to a country where there are highly efficient capital systems, their productivity by any measure increases. Sometimes this increase is by an order of magnitude. If an engineer moves from North Korea to California, their productivity would go through the roof. Why is this? It's because their productivity is linked to the cooperation of the productivity of those around them and the economy.

This concept translates directly to the capital markets and even the public capital markets. When you total all of the investment activity of all of the participants in the public markets, you get productivity that grows. This is the concept you are missing when you say that "money is fixed" and "a winner requires a loser".

[Gestalt]

Again, muddying the water and irrelevant.

Tell ya what, you go without using money for 6 months, and I'll go without bartering for 6 months.

Let's see what happens.

[Buster]

It's not irrelevant. It's the basis for the entire conversation. I think you're feeling a slight cognitive dissonance effect here - you know there is more here but it's uncomfortable for you to think outside your current assumptions.

It's really just easier to think in terms of "money", and fiat currency gov't yadda yadda. But understanding the underlying concepts is harder. But it's worth the effort.

[JustinL]

Originally posted by Gestalt
The money supply is finite at a e given time
Only a central bank can create more.

This is only one definition of Money supply.

Give this a read: http://www.investopedia.com/articles...debt-taxes.asp

Money can be "created" with debt. There isn't a printed or minted note/coin for every dollar in the economy.

[Gestalt]

Justin, that was covered last page.

And the point remains, you or I cannot create currency, or make new money. Central banbks even control lending and debt.

Originally posted by Gestalt

That's counterfitting.

Capitalism is getting together making a product. If your product has a buyer with money, there is a transfer of wealth.

They can also use credit obtained through capitlaisms fantasy of fractional reserve lending, but those benefits are mainly for the billionaire class who makes the rules.

[holden]

Sure you can. I could start printing Holden dollars. They would be worthless until somebody else traded me something of value for it. Voila, wealth created.

Just like bitcoins. They were created and were worthless until the first transactions (I think somebody used it to buy a pizza).

[Buster]

Originally posted by holden
Sure you can. I could start printing Holden dollars. They would be worthless until somebody else traded me something of value for it. Voila, wealth created.

Just like bitcoins. They were created and were worthless until the first transactions (I think somebody used it to buy a pizza).

yup.

Although you would quickly realize how "free" you are from government coercion if you tried to utilize bitcoin for 100% of your commerce.