Bubbles pop. Except maybe, sometimes they don’t. Like sometimes, they end up as: Fiat currency, in a lot of respects, has many of the bubble properties I’ve talked about. In the last post, I talked about my conceptualization of moneyness, which we can formally define as the proportion of imbued value we give an asset that comes from liquidity value — our forward projection of liquidity for the asset.
I like the conclusion you came to with this. As a corollary, human behavior can become more complicated around symbols (e.g. an asset) to the extent that value is extrinsic. Markets for such extrinsically valued assets are, in the words of David Milch, a lie agreed upon.
On the Mathematics of Liquidity Value (Part 4)
I like the conclusion you came to with this. As a corollary, human behavior can become more complicated around symbols (e.g. an asset) to the extent that value is extrinsic. Markets for such extrinsically valued assets are, in the words of David Milch, a lie agreed upon.