Investing in Wall Street is like converting your paycheck into snow for building a snowbank. When the market or weather overheats, your solid investment has the liquidity of a snowmelt.

For workers wanting a warm retirement, Wall Street was a snowjob. The NASDAQ bubble was a snowstorm that snowed over the snowblind. The most glaring snowmen touting snowbanks quietly melted away. In a market that drains into the pockets of a few fairweather forecasters and analysts, the average investor had as much chance of success as a snowball in hell.

Snow Banks and Inflationary Bubbles

Weathermen become concerned about spring flooding when the snow packs increase beyond a certain depth. With the spring thaw, the snow melts and drains through the creeks and rivers. The extend of spring flooding depends on

  1. the depth of the snow pack,

  2. the rate of thaw, and

  3. the obstruction of rivers (ice floes).

The relationship of a snowpack to flooding provides an insight as to how our current economic models and human values necessitate inflationary bubbles.

NASDAQ: Past and Present

Consider the following quotation describing the actions of one investor.

For good reason, the $1,500 he used to put mainly in stock mutual funds every month is going into stable cash reserve money market account since the fall of last year.

"I'm staying on the sidelines until there is good economic news ..."

He's got plenty of company. Many market players, form small-time stock buyers to large institutional investors are parking cash in money market funds, bank certificates of deposit and other stable investments as they wait to see how low the stock market will go.(Investors amass cash and worry)

The "market players" behind the NASDAQ inflationary bubble shows the snowbank theory in very simple terms. As a result of tax and financial laws, people had to invest their money somewhere. They threw it on whatever snow bank the weathermen (financial advisors) were championing.

Various retirement plans (401k's) automatically piled more money into either the financial streams or the snowbanks. Like a winter of repeated heavy snow falls, the money could only go one place, eventually down the existing, limited channels. As the stockmarketed heated up, the snow melted, eroding people's savings as the money went down the drain. The ensuing floods took a lot of innocent bystanders, e.g., old brick and mortar structures.

The Larger, Broader NASDAQ Inflation

The inflationary cheapening of symbols is secondary and subsequent to the basic inflationary cheapening of human time.--see writings. Remember, money is time and time is money. All the money behind the bubble and lost in the burst was time that people had worked over and above their basic needs--see core of all inflationary bubbles . The NASDAQ inflationary bubble was longer and deeper than a few months of declining closes of Wall Street paper, the symbols of people's time.

The overtime speculated on the NASDAQ was not only work time but social time. As the multitudes increasingly obsessed on the rise of the NASDAQ, less time was put into the basic problems of everyday existence. Parents gave thought to stocks when children needed more attention. People attended stock club meetings instead of parent-teacher meetings. People bragged about their winnings in every conversation instead of wondering about how to save education.

At the end of the ride, a lot of people who rode up and down asked the question, "Is that all there is to life?" These people didn't have time for friends as they strutted their winnings before impressionable acquaintances. Neither the parents nor unemployed spent time developing children or friends. Instead to preparing the Titanic's lifeboats for the storming seas of old age, the parents were comparing their cabin accourtrements.

People talked about their growing snowbanks when history showed they should be shoring up their riverbanks. As sure as the snowbanks will melt with a spring thaw, so will inflationary bubbles melt before the heat of ignored, unsolved problems.

The Next Bubble: Faster information and faster inflation

Financially, the snowbanks are rapidly accumulating more frozen liquidity as the above quotation indicates, $1500/month. As people wait for the stock market to hit bottom, their personal snowbanks grow from the funds withdrawn from stocks and the new monthly savings that had gone into stocks. People are waiting for the new venture into which to invest their money. What can only happen? People will quickly melt their snowbanks and flood the channels with new liquidity. They will create a bigger and faster inflationary bubble than NASDAQ. Should be fun to watch.

Many watchers expected a NASDAQ inflationary bubble burst. An overall conclusions has not dawned on most people like the above "market player."  The NASDAQ was probably the best place to invest because there were not that many other productive places to invest. In other words, some people had more money than there were good, productive investment opportunities. This is a restatement of a basic rule: There's more good money than good ideas. What does this mean? A lot of good money has to be wasted on bad ideas. The NASDAQ was not a bad idea, it was a library of bad ideas.

Nothing has changed with the collapse of the NASDAQ bubble:

  • Good, productive investments still do not exist, and
  • People have excess money that they want to invest but cannot.

The money is going to accumulate like people hoarding gold in the early 1930's. In this era of rapid information, tax-exempted savings and unlimited overtime, new boom/bust cycles. The busts end when people have lost their inflationary funds, inflated time and inflated lifestyles.

The Mismanagement of Time and Uselessness of Overtime.

Inflationary bubbles are more than stock market collapses. The symbols of capital (stocks, bonds, and currency) are symbols of human time. They are the collapse of meaningful employment for people to work for the needs of their lives. The cheapening of human time can happen not only without the the collapse of the symbols of time but as a result of economic policies to prop up the value of symbols, e.g., Hoovers gold policy and the Great Depression and the Bush/Greenspan fiscal/financial plan. Understanding the relationship of snow pack and spring floods shows why limits need to be put on not only how wealth is accumulated but on the length of the workweek--see Estate Taxes: Enslavement or Emancipation as well as 24in4.

Americans are, as a whole, working more than they can productively spend or invest. A person used to hear that

  1. it was a waste of time to work more than a certain amount of time because

  2. it merely put one in a higher tax bracket so that one was working less for one's self.

Likewise, working beyond the optimal workweek is just a waste of time and life. At the end of an inflationary bust, most people, the nation and humanity have less to show than if they had worked fewer hours. The current economic models force people to overwork, mis-invest and crash.

Once a society has achieved a level of productivity to fulfill its basic needs, working more than the optimal time to fill these basic needs will lead to inflationary bubbles that drain the wealth created in excess of the basic needs. Furthermore, at a certain point of over-working, each hour of overtime causes more than an hour of lost wages. In other words, the average American is wasting many hours on the jobs, for the excess wealth will be wasted either by

  • money-losing non-productive investments or
  • money-wasting problems from overworking.

Parents say they have to have two-wage earners in order to live and retire. However, the social cost of ill-educated, ill-trained children without the work ethic will create shortages of professionals in education, medicine, pharmaceuticals, etc. Two-income families create the inflationary pressures that will make their pensions evaporate before their death. For more examples of the decline of probem-solvers in a problem-plagued world, see existential meltdown.

In summary, our economic policies and values of success have created financial snowbanks that will melt, flooding the downstream situations with inflationary suffering. Unlimited overtime creates money that cannot be productively invested while the overtime itself removes the wage earner from the day-to-day problem-solving. Based on the author's calculations, anyone who works more than 24 hours a week (hourly or salary) is not only throwing away all the extra hours but creating long-term problems that will reduce the actual workweek that one works for oneself to less than 24-hours. As said elsewhere, by better organizing our problem-solving potential, we can have a 24-hour workweek in 4 years with more disposalble money and time in a safer, saner world. Part of the better organization is an analysis of investments that increase the quality of time substance rather than the quantity of time symbols.

Shifting snowbanks ... sailors on liberty and inflationary bubbles in prices of basic human services.

Circles of speculation: stocks ... bonds ... land ... stocks ... bonds ... lands ... only the first in cash out.


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