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Real ‘Wealth’ vs the ‘Wealth Effect’! Differences!

June 16, 2014

Today, many view accumulations of our cyber currencies ($$$ and 1.00) as a form of real wealth. But is this a valid perspective? Are units of cyber dollars real wealth? If we go back to the days of Adam Smith and historical Capitalism, we will discover that real wealth was defined as ‘material’ items from nature. The general classifications for real wealth were: Food, Clothing, Shelter, and Transportation. Food items were creations from our farms (like wheat, oats, corn, cotton, milk, butter, meat, eggs, etc.). Clothing was items of apparel that we wear and display when we work, play, and entertain socially. Shelter is all the buildings that we construct for our private use, public use, commercial use, and industrial use. And Transportation consists of all the cars, buses, trucks, trains, planes, etc. Real WEALTH (historically) consists of material items derived from the land (our planetary resources) which get produced for our private and commercial markets.

This image reveals what historical Capitalism means by the word ‘WEALTH’. Real ‘wealth’ is material and is derived from our ‘natural resources’. Additional examples are your house, furniture, food, clothing, land, boats, computers, etc. Real ‘wealth’ is what economics is mostly concerned with creating for our society. Capitalism is based on the philosophy of ‘materialism’ and the creation of Real Physical Wealth!

Today, our Federal Reserve administrators (policy-makers) are attempting to create what is called a ‘wealth effect’ for our markets (an illusionary concept of the mind). Why? What do we mean by this concept called the ‘wealth effect’? Does it have anything to do with REAL wealth or real prosperity for our society? In reality, the ‘wealth effect’ is merely a ‘name’ for an artificial increase in select ‘values’ to deceive consumers into spending more cyber dollars in the private marketplace. A good example of the ‘wealth effect’ is when my/your house ‘value’ increases. We look at our house and it does not really change much physically over time, yet our financial elite desire that its ‘value’ increase over time so that consumers THINK they have more real wealth. The game of finance/economics and policy-making is mostly psychological and illusionary. Few, however, seem to discern these illusions!

Home ‘values’ are really an illusion of the mind. Look at a house built in 1950 (selling for around $6000) and then ask why did this house, which has deteriorated via the 2nd law of thermodynamics, command a ‘value’ of 20 + times more today (say $150,000)? What has happened to increase this ‘value’ or ‘price’ over the years? Isn’t the concept that we call ‘value’ within our MINDS? It’s metaphysical/spiritual/beyond our spacetime universe! The concept of ‘Value’ is much like the concept of ‘God’ (subjective and personal)! Why?

If I can get you to THINK that you have more wealth in terms of cyber dollar ‘values’, then I can probably get you to SPEND some of your imaginary cyber units for REAL wealth (material goods at Wal-Mart, etc.). Notice that REAL wealth consists of the material items that we accumulate (our home, furniture, clothing, food, cars, boats, computers, land, etc.). The so-called ‘wealth effect’ is an illusionary/psychological effect within our consciousness (mind) which results from our illusionary cyber money. In reality, this so-called ‘value’ of my/your house does not really ‘exist’ within our spacetime universe. Value is within our ‘subjective’ mind and it has no material substance which we can identify, find, or locate. I have been a professional valuation consultant for over 45 years! There is no such ‘thing’ as ‘value’ within our spacetime universe. It’s pure ‘myth’ and ‘illusion’!

The so-called ‘wealth effect’ is nothing more than imaginary ‘value’ created out of nothing and from nothing! It’s all within our MIND and it has no existence within our spacetime universe! Who discerns this reality? What is ‘value’? Why is this concept called ‘value’ at the core of Capitalism and without any foundation within material reality. Why are all our asset ‘values’ so distorted today? Are you aware that our Fed is attempting to create this illusion of ‘value’ via their counterfeiting polices called QE? The vast majority of American consumers have no clue as to why ‘values’ of their homes have increased. Will they discern this illusion when ‘values’ decrease during the coming deflationary collapse? We will need to wait to see! Enjoy this day! I am:

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