Re:Occupy George
by bdunbar on Monday October 17, 2011 @12:36PM
(#3121199)
Well, it turns out that it is extremely effective to make money by repeatedly crashing and booming the stock market.
I am not an economist[1]. Boom and bust cycles - I have read - happen as a natural result of millions of people making informed choices in their own self interest.
Simplistically: Cost of X perks up a bit. People buy in, seeing a trend. Price perks up a bit more. And so on. Rational actors see a bubble - X is valued now way above what it is actually worth. These guys are also paid to make money for their investors - fail to get in the market for X and you'll simply be fired and replaced with a guy who will.
Multiply that by millions and you get booms and busts.
How does one cause a boom and bust cycle, absent a grand cabal of Rich Guys and their cronies? How would _they_ do it?
[1] Would it be lame to say IANAE or has that kind of thing cycled back to cool, yet?
I am not an economist[1]. Boom and bust cycles - I have read - happen as a natural result of millions of people making informed choices in their own self interest.
Simplistically: Cost of X perks up a bit. People buy in, seeing a trend. Price perks up a bit more. And so on. Rational actors see a bubble - X is valued now way above what it is actually worth. These guys are also paid to make money for their investors - fail to get in the market for X and you'll simply be fired and replaced with a guy who will.
Multiply that by millions and you get booms and busts.
How does one cause a boom and bust cycle, absent a grand cabal of Rich Guys and their cronies? How would _they_ do it?
[1] Would it be lame to say IANAE or has that kind of thing cycled back to cool, yet?