From: fischer@li.serum.kodak.com (Chris Fischer (x39613))
Newsgroups: misc.invest
Subject: Re:  Effects of the U.S. Debt
Date: 2 Oct 92 14:49:10 GMT
Organization: Clinical Products Division, Eastman Kodak Company

In article <9210011732.AA02371@inet-gw-1.pa.dec.com> GCTHORNE@idbsu.idbsu.edu ("Broward "The Stick in The Mud" Horne") writes:
>>More like they got wealthy STARTING their own company, and then shared
>>some of it with the public.
>
>           NO.  Most likely, no in FACT, they started their own company
>      and then offered shares in the company, letting the public share
>      IT's wealth with them, in hopes of making more back.
>
>           Consider this.  On paper, Bill Gates is worth 7 billion.
>      All due to shares in Microsoft.  Yet, if we examine the actual
>      COMPANY, we find it can be easily duplicated for a few hundred
>      million dollars.
>
>           Consider this.  If Gates were to dump all his stock today,
>      it would plummet in value.  It's true value isn't anywhere near
>      7 billion, yet our economy TREATS 7 billion as his true wealth.
>

Consider this.  If Gates sells 1/10 of his holdings this year, 1/10
next year, if might not plummet in value.  Supply and Demand.

>            And while I don't have the numbers to prove it ( yet ), I'd
>      be willing to be that this illusion of wealth has driven
>      marginal costs of many things higher than a true "market" economy
>      would allow.  Such as....  <tada dada>
>
>            Commerical real estate.  Now eating our banks alive.
>
True.  Also look at Japanese Real Estate.  This behavior often happens.  Look
at the Nifty-Fifty phenonemon.  Look at the South-Sea bubble in 1720s, the
Tulip-Mania in Holland.

Of course, some of us were smart enough not to buy real-estate.

>>Considering the total short position is less than the total long position,
>>a crash would DESTROY wealth.  If that what you think redistribution means,
>>you should buy a dictionary.
>
>           I don't consider pieces of paper "wealth", merely
>      representations of wealth.  I'd be more than happy to
>      print of some shares of The Hornet's Nest, Inc.  Want
>      some?
>
But it is not a piece of paper.  It is ownership in a company.  The
company has assets.  The minimal value of your "pieces of paper"
is what the company would be worth if liquidated and the land,
equipment, intellectual property, etc. was auctioned off.

That is wealth.

Now the market assigns a value to the piece of paper.  It also
includes intangibles like name-brand recognition, and things
like market share.  OK, it fluctates arbitrarily depending
on alot of factors, but it is still wealth.

Now, Hornet's Nest Inc., those shares are truly paper.  There
are no assets.

>
>>(Of course Clinton et. al. would be happier if we were all equally poor)
>
>           Aye, here's the rub, matey.  Politics.
>
>           If I say unto thee, thy tires are worn out, do you yell:
>
>            " GODDAMN COMMIE BASTARD, TRYING TO ROB ME BLIND! "
>
>           If I say unto thee, replace thy tires, and thy car shall
>      run better, what reply do I hear?

I'm not saying your a "COMMIE BASTARD."  More like somebody who
feels that we need more state intervention to "redistribute wealth"
and have an industrial policy to run our economy, and a real estate
policy to hold up the value of real estate.

>
>           Tell me.  What is the difference between an economy where:
>
>     a)  5 % of the population own everything, and is called capitalism
>     and
>     b)  5 % of the population own everything, and is called communism?
>
One difference is that in a), I can be Bill Gates, minor league software
company owner, and become Bill Gates multi-billionaire.


-- 
Chris Fischer (fischer@serum.clpd.KODAK.com)
They never even listen to my opinion, why would they make it policy?
"The healthy gum tissue of our liberties are being eaten away by the 
 periodontal disease of government regulation." - D.Barry
Newsgroups: misc.invest