Warren Buffet became one of the richest people in the world based on ephemeral cash flows. (See Berkshire Hathaway and buying for cashflow)

You realize that the amount of cash printed is insufficient to even pay back the US Debt. The economy for the most part is a ponzi scheme. It will only stop working when the birth rate slips below the death rate, and at that point humanity is on a timeline. As Keynes said, 'in the long run we're all dead'.

The primary question with Facebook is how much more revenue they can suck up. Thats what's driving the crazy valuations and so far they haven't stopped booking revenue.

Warren Buffet's cash flows are from blue chip insurance companies. If the allegations in the article are true, the cash flows mentioned are far more ephemeral and far less reputable.

See below for population distribution of the U.S. http://en.wikipedia.org/wiki/File:Uspop.svg

The people at that bulge in the middle are now in their late 50s. When they start to die and sell their assets all at once, we're going to see a major devaluation in the stock market, and real estate.

They won't be selling everything at once; it'll be distributed over 30-40 years. They don't have that much saved either: http://www.bargaineering.com/articles/working-americans-have...

And, on top of all that, following the hump is another (albeit smaller) one filled with their kids.

It reminds me a little bit of PG's essay on Yahoo: http://paulgraham.com/yahoo.html

I don't think it's quite as bad or blatant though.

Yea! I saw pg's essay posted after I wrote this, and I noticed that he makes the same kind of argument. He calls it a pyramid scheme, but a ponzi scheme is a closer metaphor.