Six million dollars was the price a single individual paid for Planet Calypso in 2011. On the one hand, paying six millions dollars for all the rights to any planet’s resources would produce an unfathomably return on investment. On the other hand, the human race has no ability to even visit a planet outside or inside of the Solar System for the foreseeable future. To boot, Planet Calypso is actually a virtual property in The Entropia Universe, which is a massive multiplayer online role-playing game, i.e. a MMORPG, created by Mindark. In reality, spending millions of dollars on a video game relic is ludicrous. In the world of investment, however, the fact that Calypso is not real has absolutely no bearing on the quality of the investment.
When it comes to investments, the only thing that matters is the ability to derive profit, whether from revenue or the resale of the investment. Exchange markets, such as the NYSE, determine the value of companies, commodities, and “securities” via the willingness of traders to sell and buy into these things. Simply put, it is voting with money based on what others are expected to buy, which is why stock performance often deviates from real economic growth. Originally developed to raise capital from investors for companies and commodity producers, e.g. farmers, exchanges now trade “exotic” products, such as mortgage-backed derivatives, i.e. the cause of the Great Recession, and cryptocurrencies. What is sold no longer matters.
The objective of all trading on all exchange markets is to anticipate whether or not someone else might be willing to pay more for something. It is does not matter if it is apples or virtual oranges. In line with the basic economic law of supply and demand, the amount of whatever is being sold does not matter nor does the actual need for the product. What matters is whether there will be more or less and whether demand will shirk or keep growing. Exchange markets play a very real role in pricing commodities for the global economy, yet the ability of individuals to afford water, food, clothing and shelter plays only a minor informational role in the outcome of the markets. In other words, stock exchanges are increasingly disconnected from the real world needs of real people.
The truth is, however, that the global economy cannot function as a global economy without something like exchange markets to establish the prices for the global supplies of commodities and capital. To manage global supply and demand, i.e. ration global resources, there must be globalized prices. The problem with a global economic approach is that global supply will never meet global demand, which means prices must increase. Those living in poorer nations and the poor living in richer nations will not be able to afford globalized prices, which inhibits them from engaging in necessary consumption. In turn, those living in richer nations and the rich living in poor nations will be encouraged by to over consume.
As such, the only consumers who matter in a globalized economy are those who can afford the globalized prices. Because only what this small cross-section of the world’s population is willing to buy matters, the economy does not have to reflect the real world needs of people. The economy simply must provide buying opportunities for the affluent. The problem with a global economic approach is individuals no longer matter. Accordingly, a more local approach to the global economy is needed. National and local economies must be rebuilt on industries that serve the local needs of a people with locally plentiful resources that are as local as possible with excess production being used to participate in the global economy.
Money is the reason people care about the economy. More accurately, it is financial security and the ability to earn an income that provides for the needs of a modern lifestyle. When people whose primary concern is increasing the price of anything and everything, so they can resell it at a steep profit, are allowed to shape a global economy, which neglects the majority of the world’s population, the economy and reality are bound to diverge. In decoupling the economy from reality, however, the needs of people no longer matter. This dysfunction must be broken by focusing on consumer-centered, local economic development instead of market-centered global economic growth.
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