Sunday, October 19, 2008
Tangible and Intangible economic
Recently there is a crisis which starter at wall street. As we know every market had drop tremendously due to this crisis. But it just the beginning and it just harm the intangible economic right now. The following crisis will be the fall of tangible economic.
What is tangible and intangible economic?
As my understandings, an individual who bake cake and sale and get income, this will be so called 'tangible economic'. Intangible economic mean that, that individual who bake cake use his or her income to buy share, invest, buy bond, and so on. This will create another economic body which we cant see it however it can give return to particular individual as well. Just like what the banker at wall street created. They created and make the value damm freaking high which not match with the potential value and this we call it as 'bubble'. Those value shows to investor is just on a piece of paper. the money is not excising at all. It just created by typing the amount of value on a piece of paper called 'bond'. And those investor such as insurance institute, bank treat it as gold and thought that this investment will return with high profit.
However, the bubble burst and now everyone is suffering with the tremendous drop of their investment just what happened right now. But this is just the beginning!!! Coz as i mentioned above, the individual who bake cake still able to bake cake. he or she just lose their income which use to invest. And the next episode is ... when the individual not able to bake cake due to the increase of raw material, the bankruptcy of cake shop, the shortage of loan to pay delivery fee... all and all will be lead to the fall of tangible economic.
What is tangible and intangible economic?
As my understandings, an individual who bake cake and sale and get income, this will be so called 'tangible economic'. Intangible economic mean that, that individual who bake cake use his or her income to buy share, invest, buy bond, and so on. This will create another economic body which we cant see it however it can give return to particular individual as well. Just like what the banker at wall street created. They created and make the value damm freaking high which not match with the potential value and this we call it as 'bubble'. Those value shows to investor is just on a piece of paper. the money is not excising at all. It just created by typing the amount of value on a piece of paper called 'bond'. And those investor such as insurance institute, bank treat it as gold and thought that this investment will return with high profit.
However, the bubble burst and now everyone is suffering with the tremendous drop of their investment just what happened right now. But this is just the beginning!!! Coz as i mentioned above, the individual who bake cake still able to bake cake. he or she just lose their income which use to invest. And the next episode is ... when the individual not able to bake cake due to the increase of raw material, the bankruptcy of cake shop, the shortage of loan to pay delivery fee... all and all will be lead to the fall of tangible economic.
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