Its Monday, everything is going to be fine…

I just read that the markets are on the rebound and everything is going to be fine with the economy. I’m trying to remember where I read something like that before… oh yeah, it was last Monday, and the Monday before that, and the Monday before that. By Friday we are in for the worst depression since 1929…

I think I know where the problem lies. Financial journalists have made a fundamental error. They believe that liquidity is the same thing as wealth. So long as there is capital in the market, they figure, banks will loan money out and that money somehow percolate through the economy making everything alright for everyone. Suddenly, your house won’t be foreclosed on, your job will be safe, your groceries will cost an amount you can afford. Liquidity isn’t the issue, lack of wealth is the issue.

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