Does any of this make sense?

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Karl the Mad
 

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Joined: Wed Jan 16, 2013 4:27 am
Location: Oregon

Does any of this make sense?

Post by Karl the Mad »

http://www.dailykos.com/stories/2016/8/ ... y-election

I'm no economist, but what little I understand of that article is patently horrifying. Thoughts?
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IamLEAM1983
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Location: Quebec, Canada

Re: Does any of this make sense?

Post by IamLEAM1983 »

A little disclaimer before I voice my opinion: I'm Canadian. My financial products are, as such, Canadian in nature, and tailored for the Canadian market. They're slightly different from the American norm and as such, don't come from the same speculative sources. 

I'm disabled from birth. I have access to what's call an Invalidity Savings Account, which is basically a partially government-funded "retirement" fund I set in place back in 2010. Canada retroactively invested everything it could've invested in it if I'd subscribed at eighteen years of age, and the rest going forward is on me. None of the investment portfolios feeding that fund are related to central banks, and all of it is centered around stable goods and services. This means the stock market and bank averages can both wildly fluctuate, I'll only sense vague ripples from that across my monthly reports.

We do have investment portfolios tailored by central banks available, like the RBC or the BMO, but financial culture is a bit different here, especially in Quebec. We tend not to invest in banks and generally have financial advisors onboard to help with things like mortgages, savings and any kind of speculative investment to be considered. The more American concept of trusting your entire funds and investment portfolios to a central bank does happen here - it's just not gaining a lot of traction. 

The end result is that while I'm not a hundred percent protected from the market throwing a shitstorm, I'm less reliant on banks and less likely to take the plunge if my financial services provider bites it. I'm no financial expert, but as far as I know, our central banks tend to try and speculate a lot less with their clients' money. The "rich uncle" theorem only works on the short term, and basic math kind of proves the idea that any massive short-term gains aren't to be considered as an indication of a safe strategy.

Inside Job is a documentary you might want to watch, Karl. It involves a pretty hefty explanation of the last market crash and the subprime scandals that started it. It, also, underlines the big flaws in the more hardcore applications of Capitalism. You have to spend money to make money, but if you spend more than you're bringing in, you're tipping the system and causing it to crash.

The inverse also works. You've made money; now you have to spend it to keep the system rolling. Take it out of the system after having made said money using a risky gamble, and odds are you won't have a cushion to protect yourself if your scheme fails. Part of the problem is that a lot of cash was taken out of the system - either through maintenance costs, salary bumps or offshore accounts. This is where you end up with nuked financial institutions forced to effectively bury themselves, while the former CEOs walk off with fat bonuses.

Finance is a tough environment, and raw math doesn't always line up with basic morality. It doesn't help that a lot of the qualities expected of top-tier execs are also typically displayed by sociopaths. 

In other words, they don't give a shit if the market's crashed, they've bought themselves another six cruises to Tahiti and a swell new yacht.
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