No. of Recommendations: 5
Since we were kids, the 5and10 cent store has become the $.99 and up store. The NYC subway has moved from $.15 a ride to $3 a ride (as has a slice of pizza). The price of an average sedan automobile has gone from $2,500 to $30,000. Regardless of what the government says, I'm going to put the change in the value of the currency at a factor of 20X. It would be interesting to see if the average/mean of post-tax salaries kept pace (or exceeded that differential).
Anyhow, one of the new aspects of the global economy is cryptocurrency. Whether or not I believe in God, He (or She) is definitely important to humanity writ large. Whether or not I believe in cryptocurrency, it is important to the global economy. It can be created out of "ether", and while its finite quantity is unknown, derivatives can be created around it. These then join the vast ocean of other derivatives (real or implied). It is the smooth logistics of these derivatives that the shadow banking structure depends. The 2007 crisis was created when the Lehman Brothers computers went dark, obscuring the counterparties to a vast number of derivative current default swaps, etc. The black swan, for this largely unknown/unknowable morass of interconnected finances, could be as simple as a computer hack which spins out of control spreading a virus across the interconnections between financial networks (maybe a good movie plat?).
The relative size of the US equity market is rather tiny compared to either the bond market or the vastly larger derivative market. While I, like you, believe that the stock market is currently grotesquely overvalued, it takes relatively little air to keep it expanding compared to the vast reservoirs of liquidity in the derivative market.
Jeff
