Originally posted by RetinoidReceptor
Originally posted by Rockpuck
Money is equity.. in another form .. currency to currency.
Money (cash) is an asset. An asset that allows you to diversify assets (through purchasing power) which in turn increases equity (what is
owned/benefited by the "owners" or people).
[edit on 15-10-2008 by RetinoidReceptor]
Money is a marker of agreed value(place holder) within a certain reference point(market)
Equity is potential money(value) that has not been realized(spent)
The equity value is only potential(speculative) until it is realized into the market.
Equity (as money) is only an asset when it is spent on real goods and services
The true value of the goods and service does not change only the perceived market value(price) as exchanged for money in a given market(economy)
Equity can be traded as an instrument of value, however the trade value can only be speculative until the equity is realized.
When the derivative option(what the original equity is based upon:mortgage, property value, ect.) is unknown due to multiple speculation trades, the
buyer assumes all the risk of the market realization of the equity.
Eventually a potential equity buyer will need to determine the realized value of a potential buying option, this is a market call.
Market call is the point where equity assets can become liabilities,if the realized value is less than the speculated value(audit).
When this happens multiple times due to multiple trades of the same equity,it is known as a market collapse.
The market corrects itself to the realized value(current) of its equity speculation(potential).
That specific collapsed equity market can no longer function unless there is more speculation on the existing market value, That is where the bailout
fits into the equation.
The bailout is designed to inflate the market speculation(increase the price without effecting value). This inflation creates (debt/credit) margins
to allow function (trades) in the market
The bailout functions only to perpetuate the market and allow the market makers(large investment firms) to generate capital through transaction fees
and new investor speculation.
However the same collapse will result whenever the market is called to realize true value.
All money is debt, value is perception.
Only goods and services are real