It’s a wonder my relatives still call me for economic advice. When they start throwing themselves a pity party, bemoaning all the money they’ve lost as house values crater, or stocks plummet, I can only reply:
You’re not as rich as you think you are. You never were.
Over the past few years people bid up the prices of your homes, stocks and other assets, but now it turns out those people never really had the money to pay for those assets. They were just borrowing and flipping with funny money, a game that allowed them to pay way more for these assets than anyone would using real money. If I offered you $1 million for your house, payable in Monopoly money, would that make your house worth $1 million? That game’s over. Why are you still playing?
As I said, it’s a wonder they still call. Yet for some reason they do. Strange times.
Keep writing, please. It's great to hear your voice again.
Posted by: Scheherazade | October 23, 2008 at 05:34 AM