I have to agree there is a lot of merit in what you are saying about value being what something is worth to someone else.
However, beyond what you're saying, we have to look at money differently than we do other things. Money has no intrinsic value. It cannot gain or lose value based on things inherent in it. You can't break out your toolkit and repair your dollar bill, and make it worth more. And that dollar bill could conceivably lose value abruptly (hyperinflation) because of outside factors that have nothing to do with the quality of paper the dollar is printed on. Money is an abstraction. And as I said, I have found it much easier to look at the situation of a lender and a borrower in terms of the lender being the customer, and the borrower being the provider of a service. The lender makes a one time purchase of a long term of debt service by the borrower. A service is done over a period of time, and a purchase is a one time transfer of funds, right? All the well known market forces then can be seen to be working as they typically do, if you turn it around and look at that situation the other way.
The real problem with abbreviating the notion of value, and saying that value (like beauty ;-)) is only in the eye of the beholder... is that people who think that way will create problems like that which happened in the mortgage markets lately: they seek to obfuscate the intrinsic value of the package of derivatives, and try to keep trading these things around. They use the very reasoning you used in order to justify their lack of transparency, and their swindling.
The ponzi game of speculation on market value of stocks is another absurd gambling game which is justified by the very idea which you proposed. The fact is, that unless you own enough of the company to have some control over it's direction, all you own is a piece of paper and the hope that you can exchange it for more money than you bought it for. That's pretty much wishful thinking, if you ask me.
I have to agree there is a lot of merit in what you are saying about value being what something is worth to someone else.
However, beyond what you're saying, we have to look at money differently than we do other things. Money has no intrinsic value. It cannot gain or lose value based on things inherent in it. You can't break out your toolkit and repair your dollar bill, and make it worth more. And that dollar bill could conceivably lose value abruptly (hyperinflation) because of outside factors that have nothing to do with the quality of paper the dollar is printed on. Money is an abstraction. And as I said, I have found it much easier to look at the situation of a lender and a borrower in terms of the lender being the customer, and the borrower being the provider of a service. The lender makes a one time purchase of a long term of debt service by the borrower. A service is done over a period of time, and a purchase is a one time transfer of funds, right? All the well known market forces then can be seen to be working as they typically do, if you turn it around and look at that situation the other way.
The real problem with abbreviating the notion of value, and saying that value (like beauty ;-)) is only in the eye of the beholder... is that people who think that way will create problems like that which happened in the mortgage markets lately: they seek to obfuscate the intrinsic value of the package of derivatives, and try to keep trading these things around. They use the very reasoning you used in order to justify their lack of transparency, and their swindling.
The ponzi game of speculation on market value of stocks is another absurd gambling game which is justified by the very idea which you proposed. The fact is, that unless you own enough of the company to have some control over it's direction, all you own is a piece of paper and the hope that you can exchange it for more money than you bought it for. That's pretty much wishful thinking, if you ask me.
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