In the past week we have seen stockmarkets all over the world crash by 10% in one day and pull back by 10% the next.
In my younger days we worried if we had 10% per YEAR.
Certainly the brokers are making lots of money.
Also certainly there are many ordinary people losing lots of money, and their houses, and their cars.
I believe that it all has to do with computers and the speed of trading on the internet.
In earlier years we had to go to the bank manager and place an order to buy or sell some shares at “best.” It took days to finalise the deal and to post certificates.
These days, at the push of a button, the speculators can win or lose millions, (who has the fastest finger?)
The oil barons make billions. Bill Gates and his computer geeks make trillions.
As we have now witnessed with the American sub-prime fiasco, there comes a time when assets are too heavily leveraged and there are no more real buyers, only computer game-players. Then, when the weak players can’t pay or play anymore, the whole world goes into panic mode and more houses and more cars are re-possessed and more banks go belly-up.
I believe that in the end only real value will prevail :- Land, private property, water, food, housing, security, freedom, family and friends.
There was some welcome news today that England and America are going to stamp out “bear sales” or what they call ”short selling”. Hopefully that will curb this stockmarket madness.