But they are swayed by recurrent
promises that they could draw their money at will ("liquidity") and,
in the meantime, receive alluring returns on it ("capital gains",
"interest payments", "profits").
People know that they are likelier to lose all or part of their
money as time passes. But they convince themselves that they can
outwit the organizers of the pyramid, that their withdrawals of
profits or interest payments prior to the inevitable collapse will
more than amply compensate them for the loss of their money. Many
believe that they will succeed to accurately time the extraction of
their original investment based on - mostly useless and
superstitious - "warning signs".
While the speculative rash lasts, a host of pundits, analysts, and
scholars aim to justify it. The "new economy" is exempt from "old
rules and archaic modes of thinking". Productivity has surged and
established a steeper, but sustainable, trend line. Information
technology is as revolutionary as electricity. No, more than
electricity. Stock valuations are reasonable. The Dow is on its way
to 33,000. People want to believe these "objective, disinterested
analyses" from "experts".
Investments by households are only one of the engines of this first
kind of asset bubbles. A lot of the money that pours into pyramid
schemes and stock exchange booms is laundered, the fruits of illicit
pursuits.
Pages:
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93