gone, gone, gone, solid gone

No, no, no. When the stock market crashes that money is gone, gone, gone, solid gone. It doesn’t find it’s way into some other investment or country, it is poof, gone like the morning dew. If you had cashed in your investment on Tuesday you could have bought a Cadillac, on Wednesday you will be lucky to get a Ford. In something like a stock market crash, almost all stocks go down and almost everybody is poorer.

Overall there is less money than there was before. The factories and the farms and the paper currency are all the same on Wednesday as they were on Tuesday, we still have the same stuff as we did yesterday, but we have less money.

Of course in a sense that money never really existed, not the way that the factories and the farms and the paper currency do, but poor people are losing their jobs and rich people are jumping out of windows. Doesn’t matter to frugal folks like you and me who don’t need the money right away and can ride it out, and I believe the market has always come back so far, though I am always nervous about believing in something that has always happened before because everything that isn’t happening for the first time has always happened before and will continue to do so, until it doesn’t.

The stock market does things and then the analysts say it is because of this or that, but nobody really knows because it is such a complex thing. But one thing that I think you can rely on is that it doesn’t like uncertainty, and nobody wants to be loaning money to a country that says maybe it will, and maybe it won’t, be paying its debts, depending on its politics, so US currency (which is the linchpin of the world economy) takes a hit and all Americans are a little bit poorer so that a bunch of nuts can increase their political capital.

You can sell your securities at any time, but you can’t necessarily get the price that you wanted, a little like your house, if you sold it cheaply enough you could always sell it, but right, it’s not as flexible because every piece of a fund looks just like every other piece of the fund, but all houses are different.

Consider that when Israel goes to war it has actually been attacked. When Uncle Sam goes to war, outside of going after Bin Laden in 2001, it’s not because we have been attacked, it’s because we don’t like something that happened somewhere else in the world. We may give to the Palestinians but it’s a mere pittance of what we give to Israel. It’s not like we are giving equally to both sides.

And we give foreign aid in general not out of the goodness of our hearts, but because we hope to influence their foreign policy in a cheaper way than putting boots on the ground, except in the case of Israel who we give money to and they influence our foreign policy.