Perry Glasser

Spend and Invest and Tulips

In Business on October 23, 2008 at 7:43 am

Right now, the economy is like a tulip. Examine our own behavior
We look for the best price for goods that will do the job because if you save money we can buy other items. Most of us buy goods we consume. We buy bread, iPods and wallpaper. Eventually, a consumeable good is…well… consumed. It’s done. Some stuff lasts longer than others. Milk lasts a week; your car lasts a few years. The car is a durable good (unless you bought an American vehicle manufactured on a Friday).
Because we want our money to work for us, when we have excess capital, meaning money that is not needed to purchase immediately necessary consumeable goods, we also invest. We purchase assets with the expectation in the future we can sell it for more than we paid for it. Diamonds and shares of stock are assets purchased with the expectation of sale.
Never confuse the purchasing and investing.
Oh, confess–you do it all the time.

Tulips

In 1636, Holland discovered the tulip. They were imported. People went crazy for them. Everybody wanted them. No one could get enough of them, and the more rare they seemed, the more valuable they became. The cost of tulip futures for some bulbs rose to prices worth more than 20 acres of land. I am not making this up.
It’s easy to laugh, but open your closet and count your Beanie Bag Babies stash. How many collectibles have you bought recently? Holy bananas, have you been buying fake money and stamps with baseball players on them from small Caribbean states as family heirlooms?!?
Don’t laugh. Drop that Blackberry.
In our culture, various sharks will try to persuade you that you need a cell phone on which you can play a variety of stupefyingly moronic games while reading headlines from Thailand or viewing pornography, and that this device is worth hundreds of your dollars. God forbid an hour goes by without email. No one needs a 42″ television. No one needs $200 running shoes. If you believe you need pornography, try your imagination and shift to your left hand.You’ll find the entire experience…elevating?
Never borrow capital to buy consumer goods. Keep your credit card pristine. It’s a convenience, not a borrowing mechanism.
Borrow for investments, but only if you believe the eventual return will be greater than the interest you will pay.

Big Money

When Elected Weasels borrow money for nondurable consumeables, they are throwing your money down a well. Lately, they do this with wheelbarrows.
Insist that they borrow money with the expectation for greater wealth later. Insist that they build infrastructure that will make life better, easier and more productive.
Look, Binky, societies that borrow for immediate consuemables fall prey to evils such as revolution, totalitarian government, and charismatic leadership that promises the end of woe with no intention or capability of delivering it. They stood on parapets in Paraguay. Hitler promised living space. Lenin exited the train at the Finland Station and shouted, “Bread!” which got Czar Nicholas and his whole family shot to death in a basement.
The examples are many and scary.

Where We Can Invest

Education is an investment because it creates smarter people able to function more productively. Let the Weasels borrow for it.
Mass transit is an investment because if people can get to and from jobs quickly, cheaply and without damaging the environment, we all benefit. Let the Weasels borrow for it.
Healthcare is an investment because terrified and sick people produce very little. Let the Weasels borrow for it.
Wars waged against Shepherds and Goatherds protects us from nothing; exporting democracy to people who consider women’s rights to be religious heresey is fruitless; don’t let the Weasels borrow for it and be very afraid when they do.

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  1. […] for an asset that went from $12 $1,000+?  You did not have to be born in 1600 to know it was Black Tulip Time in Cyberspace […]

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