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Re: Stocks = consumption?

Shawn77 — Mon, 05 Jan 2009 19:32:44 GMT

If you and two of your friends bought a pizza place around the corner wouldn't you consider this consumption even if you intended to run a profitable business out of it. The stock market is no different. You are buying a part of a company, granted a much smaller portion, and then that company uses your investment to expand its means of production or upgrade it's current one or whatever. Your money is no longer liquid in your account it has been traded for a stock . Now you didn't trade it for a sweater but you did trade it. The point Rockwell was making is more people traded ther money for stocks than would have without the inflationary boom.

Re: Stocks = consumption?

laminustacitus — Mon, 05 Jan 2009 17:20:41 GMT

Is there anyone who can clarify why stocks woud count as a "consumer expense"?

Re: Stocks = consumption?

Sphairon — Thu, 01 Jan 2009 23:37:55 GMT

Now that would justify calling it a Ponzi scheme, but not a consumption expense. I'm still somewhat confused.

Re: Stocks = consumption?

Shawn77 — Thu, 01 Jan 2009 02:34:14 GMT

Just like people were lulled into believing there homes would continue to rise in value forever The stock market pulled the same trick. people believed that stocks would more or less go up forever which of course is not the case. Many people were putting money in the stock market they could not gamble with because they saw the market as nothing more than a savings account that earned 10% or 15% instead of 1 or 2.

Stocks = consumption?

Sphairon — Thu, 01 Jan 2009 02:22:37 GMT

Lew Rockwell writes today that

In this Fed boom, just as in the 1920s, far too many people were drawn into stocks instead of saving.
[...]
The same with purchasers of residential housing, another consumption expense.

I can see why residential housing does not count as an investment, but why are stocks considerd a consumption expense when they are clearly intended to be "working money"?