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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: a.handbag. who wrote (156733)	9/9/2011 11:28:35 AM
From: Bearcatbob	1 Recommendation Respond to of 206092

The issue of wealth creation is a key to getting out of our current situation. Let's say - pick one of our favorites - SD - announces a huge oil find tomorrow and the stock doubles. The only losers in this would be shorts who - imo since they were voting on misfortune - deserve to be screwed. This would be a huge creation of wealth in the terms of share appreciation. With the share appreciation one would have collateral from which to borrow and hence participate in the growth of the money supply. Let us say some other event takes place - say a destructive politician changes his policies - and the market soars. Again - wealth would be created and the benefits would flow. One does not have to sell shares to realize wealth. It all gets down to the argument of zero sum economics. A dear lefty friend here in Cleveland has been very difficult to convince that markets are not a zero sum game. If one believes for each winner there is a loser - one does not care about creating more winners. IMO we need more winners. The creation of winners does not require another to lose. Bob

To: a.handbag. who wrote (156733)	9/9/2011 11:45:18 AM
From: Salt'n'Peppa	Read Replies (1) \| Respond to of 206092

I think the problem is in the concepts being thrown around. Kayaker (and the good John Hussman Ph.D.) is both right and wrong. Nobody (me specifically) is talking about "wiping out" or "creating" money. I am talking about the increase or decrease in the dollar value of a share certificate, whether physically held or held in trust by your broker, which is based on "money pressure" flowing into or out of "the system". The "$2 trillion wiped out" example refers to money pressure, not money destruction. Think about it this way. A share certificate that is issued at an IPO of $20 introduces $20 into the system. Two people want to buy this share (i.e. money pressure is positive), so they bid it up and a transaction occurs at $25. $25 goes out and $25 comes in. Zero net change to the system but the shareholder sees wealth creation. Money held on the sidelines looking to get in has represented "positive money pressure" and caused a bull market. Conversely, if two people holding a share each want to sell but nobody is buying at the $25 they are asking, they will bid each other down until one person on the sideline finally agrees to buy a share at $15. $15 comes in and $15 goes out. Zero net change to the system but the shareholder sees wealth destruction. Money held in the system looking to get out has represented "negative money pressure" and caused a bear market. It is not an easy concept to grasp. We may be saying the same thing from a different angle. I don't know. S&P