Tag Archive for: wealth effect

The Anti-Concepts of Money: Wealth Effect

Anti-Concept The Wealth Effect

If you’ve read the Purchasing Power and Inflation essays from this Anti-Concepts of Money Series we can now discuss the Anti-Concept of The Wealth Effect. The Anti-Concept of The Wealth Effect Here is the definition of wealth effect from Wikipedia:  “The wealth effect is the change in spending that accompanies a change in perceived wealth.”  […]

Are Stocks Overvalued, Report 24 Dec 2018

We could also have entitled this essay How to Measure Your Own Capital Destruction. But this headline would not have set expectations correctly. As always, when looking at the phenomenon of a credit-fueled boom, the destruction does not occur when prices crash. It occurs while they’re rising. But people don’t realize it, then, because rising […]

The Wealth Effect, Report 24 Jun 2018

Last week, we discussed Social Security, a Ponzi scheme that is inevitably approaching its default. That leads us to another point in our broader discussion of capital destruction. Let’s illustrate with an example. The Fraudulent Promise Suppose Eric works for wages. He is 50 years old. His house is paid off, he has no student […]