Re: I'm gonna give this a go.

Did you stumble ### backwards into a sophomore econ class?

Re: question for you smart folks lol

Tiggity®

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Our financial system has long ago monetized demand.

May 15, 2024, 10:13 AM

If there is a limited supply and a large demand, we say the stock is worth "X dollars". If there is a massive supply, low demand, we say the stock is worth "X-demand dollars". That isn't "money" that "disappeared", it's a valuation that changed. We have trillions of dollars worth of demand that simply doesn't exist, and can only exist so long as supply is constrained.

The trick is to create demand, leverage that for price increases, then sell, increasing supply once again and lowering demand and price. Another trick is, through whatever sales pitch sells, create demand, and ride that to profitability, then leverage the market valuation to take on debt, which is nearly free money. The billionaires of the world don't sell their assets, they leverage them for debt, to spend as money while keeping the asset value intact by not selling and increasing supply. This is why billionaires never liquidate their holdings of stocks, land, whatever. They leverage it to secure debt, to invest and create new demand.

It's an existential crisis we have with money and it's visible and tangible only when things go wrong. A company is worth 100 years of profits. Fine, that's a valuation. But you can then leverage that 100 future years of UNEARNED profits, as an asset to leverage as collateral, to raise money in the form of debt, which can be serviced with minimal expense. This is the route of contagion in financial markets, when something used as a basis or collateral for issuing debt, when that "thing" declines in market valuation, then the subsequent debt issued based on the perceived value becomes debt that is not backed by an asset, and then that debt becomes toxic.

To the extent this is done in the stock markets, company profits become less important than stock price. You can have a company with stock in demand, that's NEVER TURNED A PROFIT, and that's ok because that doesn't matter. The demand for the stock is all that matters, and/or the promise of future profits. This real kitty or whatever on Twitter. He reappears and AMC and GameStop go through the roof, yet again. "Meme" stocks. Meme coins. All of this is creating demand to make money, whether there is any basis for the demand increase or not. The promise of increased demand creates, increased demand. That means you can make billions on a company that literally has no feasible longterm future, like GameStop or AMC, etc. Has nothing to to do with the company, the product, the profits, or the losses. It is simply creating demand.

Hedge funds used to hold an advantage in this arena. Heck they invented it. But today there is an opposite financial entity that has risen, and that's the anti-hedge fund. It can create demand, increase stock prices, which forces those hedge funds shorting to pay huge premiums to service their short positions. And all the while, the company itself is nearly irrelevant. Social media can be used to facilitate demand, and the pumping has never been easier. Remember the movie Wall Street, in the 1980's? Blue Star Airlines? Gecko had a call placed to a financial newspaper, to a journalist, to "pump" the stock. Today, with social media, this same process no longer needs a reputable paper, journalist, or media outlet to create the demand desired. It can all be done on social media.

End of the day, just as Karl Marx said, money/currency is merely an arbitrary unit quantifying labor, used as a means to exchange labor. A dollar ultimately is only worth the labor someone is willing to expend for it. When the currency is disassociated from labor, and changes from a unit of labor, to a unit of valuation based on demand, you're not even really talking about money anymore. You're using money as a guise to measure something infinite, and that's demand. Labor is finite. Valuations are not.

The answer to your question is a resounding NO. There isn't enough cash. But cash is not the limiting factor anyway. It's demand. Say Elon Musk wants to liquidate his shares of Tesla, for cash, or heck, maybe equal parts gold, cash, real estate, bonds, and bitcoin. Each of these things has a demand, and a valuation based on market demand and supply. First off, and this is fundamental, as soon as Musk tries to liquidate his 70 million or however many shares he has of Tesla stock, as soon as he does that the market is flooded with a supply of Tesla stock, the price CRASHES, and he would only see pennies on the dollar in value in the sale of his shares. There is likely enough gold, cash, real estate, etc, that he could purchase, that are diversified enough to provide the liquidity necessary, but even then it doesn't matter because what he's selling loses value before he can even exchange it for something of similar value.

Take the diamond asteroid "worth" $100 quintillion dollars. If you mine that asteroid, get all those diamonds back to earth, a diamond would be worth less than a toothpick, and it would never BE WORTH $100 quintillion dollars. You'd never get $100 quintillion dollars for it. Which brings us back to the fact that, ultimately, it's NOT "WORTH" $100 quintillion "dollars". Same with Musk's stock. If he can't get the full market price in cash (dollars), or even a like-valued asset, it's NOT WORTH the market valuation if the full valuation can never be realized.

Warren Buffett knows what I'm talking about. People laughed at him when he was asked what's the most valuable asset anyone can have. He said the most valuable asset you can have is a skill, a knowledge, to do SOMETHING that helps others. Because when you have a skill, or a product, that helps others, they will pay you for your labor, and that is the most pure form of "wealth", and that's why it's taxed (as income) and not valuations.