The stuff that dreams are made of
Glenn asked: I have a question give Dr. Black's latest post. If $58 trillion in wealth disappeared last year; if this Seattle institution is out of money, is there any bank, anywhere that's still realistically in the black, in real world, not words on paper, money?
There are times when it sounds like we're all going to return to trading in gold pieces, biting them to see if they're real.
I answered: I'm not an economist, but my guess is - no-one knows. Everyone's waiting for the banks to open their books and declare their assets.
But Master D went way better:
MasterD : The wealth didn't "disappear" - it never existed.
It was believed to exist. Kind of like the Maltese Falcon, which was presumed to be extremely valuable (made of gold, jewels, etc), but had a black coat of paint on it. Everyone thought it was worth a fortune until the paint was scraped off, revealing nothing but lead.
Well, imagine the paint hadn't been scraped and instead the Falcon was used as collateral...
The Maltese Falcon analogy is working better for me all the time.
Of course, you had to have seen The Maltese Falcon for the analogy to work.
Oddly enough, the actual lead Falcon used in the movie, and dropped and dented by Bogart, is worth in the neighborhood of $2 million.