Wednesday, October 08, 2008

Blather

Well our tenant is still here but his car has disappeared. Whatever occurred occurred while we were at work. I figured something would happen yesterday because it was street sweeping day and I was right, too bad I couldn't watch it.

Hey look Iceland is on the brink of bankruptcy and their currency's value has fallen in half. Sounds kinda like Argentina at the beginning of this century. The whole problem with money is that it is only as real, or as valuable, as people believe. If people stop believing the money has value, it won't, regardless if it's in the bank or under the mattress.

I have never done well in the stock market and the last straw was a couple years ago when I had to take a 9k loss on a 25k investment for us to buy this place. Ooh let me go check..... if I had waited and sold today, I'd be out 3k more. Even google isn't impervious. Everything is losing value because everybody thinks the economy is going tits up. It's a self-fulfilling prophecy due to the mentality of the herd.

You never hear about the economy in the middle eastern countries where interest is forbidden. If credit is so darn necessary, how does an economy with no interest handle credit? I'm probably naive but so suddenly curious.

15 comments:

Snooze said...

I can't even look at my investments right now.

"Just David!" said...

They don't need credit, they have oil. Nebraska could be the new Dubai if we could get all the cars to run on corn fuel, I know it has a name but it escapes me at the moment.

Anonymous said...

U.S. Currency used to be backed up by the Gold Standard. President Nixon took it off the Gold standard so now we don't back it up with Gold. It is only as good as the Government says it is.
Does the guy still have Pizza delivered? ed

franck said...

These days not having money saves me a lot of stress

Lemuel said...

"funny money" + ursurious interest + unmitigated greed = diaster waiting to happen. oh. wait. It did happen.

David said...

Since I'm not retiring (if ever) for at least another 20 years, the market has some time to rebound before I'll need my retirement funds.

Polt said...

I don't understand financial stuff, I barely got a C in my college economics course, and I can't balance my checkbook to save my life.

But since I paid off my car loan earlier this week, and mailed my check to the credit card company this morning, I am so glad I am now totally debt free.

HUGS....

The Neighbors Will Hear said...

So is it wrong if the first thing I wonder about while reading this post is whether I can get a cheap trip to Reykjavik right now? I'm thinking Iceland is a place you want to go to during the summer, but, hey, if it's a deal....

Roxrocks said...

I'm glad I live in a place where I can grow my own potatoes, you know what I mean?

You can't take the money with you when you go, that's all I know about money.

dr. mo said...

You can indeed have credit without charging interest, which is what they do in those Muslim societies. Of course the catch is that the lenders don't make money from that, so it's more like a public service than a business. Not a bad idea, if you think about it. The upside of course is that people with relatively limited funds can start businesses and make money, which of course reduces the need for other types of social assistance, while also creating productive opportunities.

Admittedly, this is not exactly how the national economies of those countries function, and the fact that they have so much oil certainly skews the picture. And they have no prohibition against charging interest to non-believers, hence the possibility of selling oil on credit.

OmNomBlog said...

Yeah for once I'm glad to be a broke student. Can't lose money you don't have.

Phronk said...

Uhhh that was me.

Sunshine said...

I think you are on the money there (pardon the pun! :P).

I think human beings are very good at making things more complicated than they need to be and money is one of those things. Money is meant to be a medium for exchange of real goods and services. It used to be backed by very real "things".

The problem began when they started treating money itself as goods in its own right. Then they started a whole market based on the prediction of the value of money in future. Once prediction became part of the formula, people's subjectivity and sentiment became the cornerstone of value - perceived value. The fluctuations in the stock market, for instance, are more often than not really just fluctuations in mass sentiment and perception these days.

Butch said...

I took my 401k out of the stock market two years ago as well. Not that the money will be worth anything if the paper is worthless. It ok, we lent it to my sister and her husband.

Mark in DE said...

I realize there are some fundamental problems with several international economies (including the US) but I believe things are being made infinitely worse by the relentless media coverage.

The stock market always falls and recovers. The worse thing to do is to yank one's money out NOW, while values are low.

Mark :-)