MB, I may have discovered what is really happening in this market and why the bears have been wrong being bearish. <g>
panopticon.csustan.edu
HYPERREAL FINANCE
Abstract
In both our scholarship and our society, we are wedded to the notion that the financial economy (of money) exists for, refers to, and is meaningless without the so-called real economy (of things). But what if "real" finance (finance which refers to the real economy), is in fact "hyperreal" finance (finance which refers to nothing but itself)? What if financial transactions are not moves in an economic (real) game but moves in a non-economic (hyperreal) game? In a post-modern society, the traditional economic (real) role of finance has become marginal. To understand finance and to develop effective public policy regarding financial markets, one must acknowledge its more cultural (hyperreal) role.
Once upon a time a group of congenial people got together (at a coffeehouse, beside a curb, or under a buttonwood tree in different versions of the story) for a game. They each paid a bit of money for tokens and began to play. The game turned out to be especially interesting and exciting, and it attracted passersby, who asked to join in. They were allowed to do so, but their tokens were a little more expensive than the original tokens because the game had become so desirable. This raised the value of all of the tokens in the game.
There was no guarantee that anyone in the game would be a winner, but with new players steadily boosting the value of tokens, everyone could rationally expect to come out ahead in the long-run. Players could still lose all of their tokens, and if forced out of the game for one reason or another, end up cashing in their tokens for less than they paid for them originally. But as a few new players were always being attracted to the game and as not too many players cashed in tokens to make purchases, the game proceeded happily along, with everyone enjoying the thrill of competition and the prestige of increasingly valuable stacks of tokens.
As it grew, the game attracted journalists and scholars, responding to what had become an insatiable demand by players for more information regarding the game. Government officials also took a keen interest, since such a popular game involving vast sums of tokens had to be regulated for the protection of its participants. Eventually, there were few in society whose lives were not touched by the game in one way or another, and all agreed that the game was indeed a grave matter.
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