Some thoughts on the $660k copy of Super Mario Bros(famicomblog.blogspot.com)
famicomblog.blogspot.com
Some thoughts on the $660k copy of Super Mario Bros
http://famicomblog.blogspot.com/2021/04/air-raid-has-some-thoughts-on-660000.html
110 comments
Can confirm that mechanical wristwatches have experienced the same. Some MSRP $20k watches can resell for over $100k currently. Pokemon cards, watches, comics, video games, NFTs, houses, yachts, all are very hard to buy right now, even for the wealthy (because of bidding wars and limited supply). Lots of money sloshing around.
I don't know many people into trading collectibles, but the few I've talked to have no illusions that this trend will continue forever. They're gambling that they can cash in on short-term market euphoria and hope that they can get out before it all collapses.
Who knows what will actually happen. It's interesting to see collectible companies cashing in by manufacturing more "rare" collectibles out of thin air at a rapid pace.
Who knows what will actually happen. It's interesting to see collectible companies cashing in by manufacturing more "rare" collectibles out of thin air at a rapid pace.
Out of curiosity, can you list a few watches that sell for more than 100k starting from 20k MSRP? Even the daytona and silver snoopy are not having that big of a jump
I haven't seen that big of a jump in any watch these last few years.
A few Rolex models are being sold 2x their MSRP. I believe Rolex, like Nike, are throttling down machines in order to keep the charade going? Giving middle class, and wealthy people a check, when most didn't need it didn't help much either. I heard a few guys mention, now I will get that Sub with my check.
Rolex is a nonprofit entity. They stopped selling parts, or technical manuals, to Independant Watchrepair Shops.
So if you ever buy a new Rolex, the minute the warranty goes, you are essentially forced to send it back to the factory at outrageous prices.
I still repair Rolexes, but it takes longer because I have to hunt down parts.
A few Rolex models are being sold 2x their MSRP. I believe Rolex, like Nike, are throttling down machines in order to keep the charade going? Giving middle class, and wealthy people a check, when most didn't need it didn't help much either. I heard a few guys mention, now I will get that Sub with my check.
Rolex is a nonprofit entity. They stopped selling parts, or technical manuals, to Independant Watchrepair Shops.
So if you ever buy a new Rolex, the minute the warranty goes, you are essentially forced to send it back to the factory at outrageous prices.
I still repair Rolexes, but it takes longer because I have to hunt down parts.
Patek nautilus 5711/1A-010 retails for around 30k and seems to be going for ~120k these days. FP Journe chronometre bleu commands a similar premium, retailing for around 20k and selling for 80k.
It is going for 120k precisely because it’s no longer available available from the manufacturer, there’s no retail price.
Designer bags have gotten extremely expensive. I'm talking about the $8000-10000 bags. The thing to do is to buy an expensive bag, use it for a few years, and then sell it for a profit, so basically people are now looking at is as an investment.
It’s funny too because Birkins have been really easy to buy during the past year, I got several while touring europe during peak-COVID because nobody was picking up their orders.
>Can confirm that mechanical wristwatches have experienced the same.
Yep. I'd been wanting to get a used Submariner for years now. Looked up prices the other day and they are literally double this time last year.
Yep. I'd been wanting to get a used Submariner for years now. Looked up prices the other day and they are literally double this time last year.
> Some MSRP $20k watches can resell for over $100k currently.
Which? The base model Nautilus retails for $30k and the prices only skyrocketed because it was discontinued.
Which? The base model Nautilus retails for $30k and the prices only skyrocketed because it was discontinued.
Same for guitars in those money brackets.
I don’t understand why interest rates are zero and we are still paying able-bodied people not to work. But hey - I work in tech startups, so keep the ridiculous easy money flowing so all the rich can get richer shrug
Corollary: With the interest rates so low, I don’t understand how wages are so low that collecting unemployment is more attractive than working.
There's a lot of people living far from the potentially higher paying jobs, and unemployment pays you without leaving the house.
No matter how low interest rates get, the local gas station and drive-thru window isn't going to pay much better.
No matter how low interest rates get, the local gas station and drive-thru window isn't going to pay much better.
During the pandemic, wealthy people have seen massive gains through huge increases in asset values without doing any work, too. Generally speaking, wealthy people have seen much larger increases in net worth during this pandemic than the working poor. Why is the problem with the economy poor people staying home on unemployment rather than monetary policies creating an asset bubble that the already well off primarily reap?
The actual problem is that despite all this money washing around, real wages for many people have not went up at all.
The actual problem is that despite all this money washing around, real wages for many people have not went up at all.
>"Corollary: With the interest rates so low, I don’t understand how wages are so low that collecting unemployment is more attractive than working."
Greed, really. Corporations are unwilling to admit the new reality of the labor market yet. Every Taco Bell near me has been closing early or completely unable to operate due to lack of workers. Meanwhile Chick Fil A is thriving, and I've never seen them so heavily staffed. Turns out if you pay your employees, it's actually a competitive advantage.
Greed, really. Corporations are unwilling to admit the new reality of the labor market yet. Every Taco Bell near me has been closing early or completely unable to operate due to lack of workers. Meanwhile Chick Fil A is thriving, and I've never seen them so heavily staffed. Turns out if you pay your employees, it's actually a competitive advantage.
Unemployment has been especially generous recently. And the low interest rates aren't juicing the economy as much as it could be due covid being a drag on the economy.
If you can make half to 3/4 your salary doing whatever you want, or an extra 25 to 50% by working 40 hours a week, a lot of people don't feel the need to work. Also an argument against UBI. If people have their bills paid, many don't feel like working.
You're overestimating the generosity of unemployment benefits, and you're underestimating people's work ethic when given unrestricted (strings-free) transfers.
In the first instance, unemployment benefits do not typically replace "half to 3/4 of your salary," and under ordinary circumstances US benefits are greatly limited in duration. Those for whom the "half to 3/4 of salary" replacement is more correct are also those who started on the low end of the salary scale, and I daresay the working poor should not be the subject of your ire.
On the second point, your assumption -- while common enough -- has not been replicated in modern-day UBI trials. On the balance, those have shown somewhere between no change and small positive changes to work intention over the existing set of social benefits, which on one hand tend to require demonstrating job-search effort but on the other hand tend to be withdrawn beginning with a low earned salary level.
In particular, I have seen no modern-day research demonstrating that providing a fixed benefit creates an indolent class.
In the first instance, unemployment benefits do not typically replace "half to 3/4 of your salary," and under ordinary circumstances US benefits are greatly limited in duration. Those for whom the "half to 3/4 of salary" replacement is more correct are also those who started on the low end of the salary scale, and I daresay the working poor should not be the subject of your ire.
On the second point, your assumption -- while common enough -- has not been replicated in modern-day UBI trials. On the balance, those have shown somewhere between no change and small positive changes to work intention over the existing set of social benefits, which on one hand tend to require demonstrating job-search effort but on the other hand tend to be withdrawn beginning with a low earned salary level.
In particular, I have seen no modern-day research demonstrating that providing a fixed benefit creates an indolent class.
We (in the US, at least) are paying able bodied people not to work, precisely in order to have them not work. The policy being that it is better for the entire society if all the laid-off service economy people (retail, hospitality, entertainment, restaurants, etc.) stay home. If we did not pay them, they would find other work, which would require them to leave home. Which would be counter to the public health policies. Staying home is the _point_ of the policy, not a side-effect.
Right, I said still paying. We have vaccines and everyone is out and about, and schools are in-person again. Why are we still paying?
Have you seen India this week? Michigan?
Airlines are still working at skeleton staff. Most of the country has little/no indoor restaurant seating. Sporting events are highly limited. Concerts and Conferences aren't happening - or even scheduled to happen in most cases.
The current federal Unemployment extension is thru Sept 6. Which might be a bit pessimistic, but IMO better to leave some margin for safety.
Airlines are still working at skeleton staff. Most of the country has little/no indoor restaurant seating. Sporting events are highly limited. Concerts and Conferences aren't happening - or even scheduled to happen in most cases.
The current federal Unemployment extension is thru Sept 6. Which might be a bit pessimistic, but IMO better to leave some margin for safety.
Why are interest rates still so low?
You don't lose UBI if you start working.
This is very important, because otherwise UBI would have the bad incentives of our current unemployment program. Avoiding those bad incentives is the entire point of the "U" in "UBI."
This is very important, because otherwise UBI would have the bad incentives of our current unemployment program. Avoiding those bad incentives is the entire point of the "U" in "UBI."
Interest is the amount of money you pay rich people to borrow their money.
Asset inflation due to decreasing interest only happens once when interest rates fall, and is followed by asset deflation when interest rates rise.
But interest is paid to rich people year after year.
Low interest rates are great for people without money.
Asset inflation due to decreasing interest only happens once when interest rates fall, and is followed by asset deflation when interest rates rise.
But interest is paid to rich people year after year.
Low interest rates are great for people without money.
Low interest rates means pensions and sovereign wealth funds that have targets for growth (usually 7 to 10% for pensions) must chase riskier assets.
> Only nine of the 73 funds studied had an assumed rate below 7.5 percent in 2014, but about half had adopted rates below that percentage by the end of fiscal year 2017.
https://www.pewtrusts.org/en/research-and-analysis/articles/...
The only possible way to come even close to 7.5% is to buy equities or exotic assets like VC funds farther out the risk curve.
The easy money is everywhere, and fixed income is taking it on the chin.
And for people without money, everything good in life - high quality education, housing, food, healthcare, etc. - is only going up.
The best possible move for poor people is to get into as much debt as possible, as the amount they owe will decrease as inflation helps them. But I don't really like the idea of an even larger debtor society than we have now.
> Only nine of the 73 funds studied had an assumed rate below 7.5 percent in 2014, but about half had adopted rates below that percentage by the end of fiscal year 2017.
https://www.pewtrusts.org/en/research-and-analysis/articles/...
The only possible way to come even close to 7.5% is to buy equities or exotic assets like VC funds farther out the risk curve.
The easy money is everywhere, and fixed income is taking it on the chin.
And for people without money, everything good in life - high quality education, housing, food, healthcare, etc. - is only going up.
The best possible move for poor people is to get into as much debt as possible, as the amount they owe will decrease as inflation helps them. But I don't really like the idea of an even larger debtor society than we have now.
Is this rate of inflation computed anywhere? I'm curious what the actual figure is and how income has been diluted over the course of ongoing events.
No one keeps track of inflation for anything other than consumer goods. Inflation is floating around 1-2% according to the Fed. They conveniently don't track things like fuel prices or food because they are too "volatile". And things like asset inflation simply isn't considered in the equation. But the reality is that upper income people have 401ks with stocks in them and lower income people live paycheck to paycheck. Since 2008 when the Fed start QE, the stock market has gone through the room, including companies like FANG.
If you're not exposed to the stock market or housing market, then you're fucked.
If you're not exposed to the stock market or housing market, then you're fucked.
> They conveniently don't track things like fuel prices or food because they are too "volatile".
Factually false. Its not very hard to search for that information. Just type "CPI Food" or "CPI Fuel".
US Food prices: https://fred.stlouisfed.org/series/CPIFABSL
US Fuel prices: https://www.bls.gov/cpi/factsheets/motor-fuel.htm
CPI is the consumer price index, which tracks a variety of prices as an estimate of inflation. The sub-categories are tracked individually, and then averaged together into the overall CPI number.
Even if you distrust the Fed entirely, we can use CBOE futures (the futures market), which has historical performance on a variety of food commodities (pork bellies, orange juice) and fuel (sweet light crude oil). CBOE is literally the free market and non-government.
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Fuel prices are down over the past decade due to the uptick in US oil production. Remember $4+ / gallon US averages? (and $6+ in high cost places like Hawaii?)
COVID19 has also decimated oil prices. Other goods have gone up in price, but fuel prices are really, really low right now, pulling inflation lower.
Factually false. Its not very hard to search for that information. Just type "CPI Food" or "CPI Fuel".
US Food prices: https://fred.stlouisfed.org/series/CPIFABSL
US Fuel prices: https://www.bls.gov/cpi/factsheets/motor-fuel.htm
CPI is the consumer price index, which tracks a variety of prices as an estimate of inflation. The sub-categories are tracked individually, and then averaged together into the overall CPI number.
Even if you distrust the Fed entirely, we can use CBOE futures (the futures market), which has historical performance on a variety of food commodities (pork bellies, orange juice) and fuel (sweet light crude oil). CBOE is literally the free market and non-government.
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Fuel prices are down over the past decade due to the uptick in US oil production. Remember $4+ / gallon US averages? (and $6+ in high cost places like Hawaii?)
COVID19 has also decimated oil prices. Other goods have gone up in price, but fuel prices are really, really low right now, pulling inflation lower.
What I meant is that Fed Policy is dictated by Core PCE, so they don't look at that when setting rates. So it doesn't matter if fuel prices skyrocket or drop, it's not anything that gets the headlines. The only thing you hear about is Core PCE or Core CPI. If no policy is enacted by regular CPI, then who cares. The Fed only sees no inflation regardless of the inflation we see all around us.
https://apps.bea.gov/iTable/iTable.cfm?reqid=19&step=3&isuri...
Core PCE includes food (split between line 9 and line 19), and fuel (line 11).
These are things you can easily google. The composition of the PCE, CPI, and other metrics is public information and publicly documented.
> The Fed only sees no inflation regardless of the inflation we see all around us.
Both CPI and PCE are both up slightly in the past year. Both are measures of inflation and clearly indicate slightly higher prices.
Core PCE includes food (split between line 9 and line 19), and fuel (line 11).
These are things you can easily google. The composition of the PCE, CPI, and other metrics is public information and publicly documented.
> The Fed only sees no inflation regardless of the inflation we see all around us.
Both CPI and PCE are both up slightly in the past year. Both are measures of inflation and clearly indicate slightly higher prices.
> Core PCE includes food (split between line 9 and line 19), and fuel (line 11).
Wrong.
"The "core" PCE price index is defined as personal consumption expenditures (PCE) prices excluding food and energy prices."
https://www.bea.gov/help/faq/518
> Both CPI and PCE are both up slightly in the past year. Both are measures of inflation and clearly indicate slightly higher prices.
Sure, if you consider 1.5% PCE and indication of inflation. By your definition, 0.1% PCE would indicate inflation. But in reality, the target PCE is 2.0%. The numbers that the Fed are using to dictate policy indicate that inflation is not high enough, and yet the evidence of asset inflation is irrefutable.
https://www.bea.gov/data/personal-consumption-expenditures-p...
Why are you trying to spread misinformation? What's in it for you?
Wrong.
"The "core" PCE price index is defined as personal consumption expenditures (PCE) prices excluding food and energy prices."
https://www.bea.gov/help/faq/518
> Both CPI and PCE are both up slightly in the past year. Both are measures of inflation and clearly indicate slightly higher prices.
Sure, if you consider 1.5% PCE and indication of inflation. By your definition, 0.1% PCE would indicate inflation. But in reality, the target PCE is 2.0%. The numbers that the Fed are using to dictate policy indicate that inflation is not high enough, and yet the evidence of asset inflation is irrefutable.
https://www.bea.gov/data/personal-consumption-expenditures-p...
Why are you trying to spread misinformation? What's in it for you?
> Why are you trying to spread misinformation? What's in it for you?
I can say the same thing with you. Why are you spreading false claims about inflation? But such discussions go nowhere pretty fast. As such, I'll take my leave with you. If you have no faith in my discussion points, there's no point continuing.
My final words: the suggestion that the Fed ignores energy prices / food prices is ridiculous at face value. Its listed right there in the statistics and well categorized in the statistics they watch.
I can say the same thing with you. Why are you spreading false claims about inflation? But such discussions go nowhere pretty fast. As such, I'll take my leave with you. If you have no faith in my discussion points, there's no point continuing.
My final words: the suggestion that the Fed ignores energy prices / food prices is ridiculous at face value. Its listed right there in the statistics and well categorized in the statistics they watch.
> the suggestion that the Fed ignores energy prices / food prices is ridiculous at face value.
Except everywhere it states clearly they exclude it.
Except everywhere it states clearly they exclude it.
> No one keeps track of inflation for anything other than consumer goods.
Yes they do. The Producer Price Index (https://www.bls.gov/ppi/) tracks price levels of goods used for production; the PCE index (https://www.bea.gov/data/personal-consumption-expenditures-p...) avoids basket effects by re-weighting using current expenditures rather than baskets that might drift out of date; the GDP Deflator (https://fred.stlouisfed.org/series/GDPDEF) uses all goods produced rather than just a producer/consumer basket.
All such indices show the same broad inflation trends, usually shifted by a small amount. These trends are also consistent with private replication efforts such as the Billion Prices Project (http://www.thebillionpricesproject.com/), which uses directly-sampled retail-price data.
> They conveniently don't track things like fuel prices or food because they are too "volatile".
They do in fact track these things. They are excluded from core price indices because of their volatility; setting monetary policy based on gas or food prices would result in wild swings from month to month. Core CPI changes show the same broad trends as the full CPI (https://fred.stlouisfed.org/graph/?g=Dtzv), without a persistent level difference.
> But the reality is that upper income people have 401ks with stocks in them and lower income people live paycheck to paycheck.
... and your policy prescription would hurt just this category of people the most. The only lever the Fed has on inflation is to raise interest rates, which also acts to reduce demand in the economy. All other things equal, that throws people out of work and risks causing a recession.
Your concern for ordinary people is admirable, but focus on so-called "asset price inflation" would exactly put the interests of capital-owners (seeking larger risk-free return) over people without existing assets. In fact, unexpected inflation is better for those without financial wealth than those with it.
Yes they do. The Producer Price Index (https://www.bls.gov/ppi/) tracks price levels of goods used for production; the PCE index (https://www.bea.gov/data/personal-consumption-expenditures-p...) avoids basket effects by re-weighting using current expenditures rather than baskets that might drift out of date; the GDP Deflator (https://fred.stlouisfed.org/series/GDPDEF) uses all goods produced rather than just a producer/consumer basket.
All such indices show the same broad inflation trends, usually shifted by a small amount. These trends are also consistent with private replication efforts such as the Billion Prices Project (http://www.thebillionpricesproject.com/), which uses directly-sampled retail-price data.
> They conveniently don't track things like fuel prices or food because they are too "volatile".
They do in fact track these things. They are excluded from core price indices because of their volatility; setting monetary policy based on gas or food prices would result in wild swings from month to month. Core CPI changes show the same broad trends as the full CPI (https://fred.stlouisfed.org/graph/?g=Dtzv), without a persistent level difference.
> But the reality is that upper income people have 401ks with stocks in them and lower income people live paycheck to paycheck.
... and your policy prescription would hurt just this category of people the most. The only lever the Fed has on inflation is to raise interest rates, which also acts to reduce demand in the economy. All other things equal, that throws people out of work and risks causing a recession.
Your concern for ordinary people is admirable, but focus on so-called "asset price inflation" would exactly put the interests of capital-owners (seeking larger risk-free return) over people without existing assets. In fact, unexpected inflation is better for those without financial wealth than those with it.
Inflation is low measured by the CPI and that is because most of the things measured in that index are made by people that are NOT increasing their wealth. It is a large transfer of wealth to the more wealthy who then benefit by lower tax rates for these capital gains.
Some comments below keep saying that CPI measures things like food and energy prices.
What we really mean is that Fed policy is dictated by the Core PCE rate, which specifically excludes food and energy prices. So sure, the CPI measures energy and food prices and other volatiles prices, but *FED POLICY is dictated by the CORE rates*, which specifically exclude those volatile components.
So de facto, no one (ie. the Fed) doesn't care about energy or food price inflation.
What we really mean is that Fed policy is dictated by the Core PCE rate, which specifically excludes food and energy prices. So sure, the CPI measures energy and food prices and other volatiles prices, but *FED POLICY is dictated by the CORE rates*, which specifically exclude those volatile components.
So de facto, no one (ie. the Fed) doesn't care about energy or food price inflation.
CPI constituents:
food and beverages: 15.157%
housing: 42.385%
apparel: 2.663%
transportation: 15.738%
medical care: 8.87%
recreation: 5.797%
education & communication: 6.81%
other goods and services: 3.159%
https://www.advisorperspectives.com/dshort/updates/2021/04/1...
food and beverages: 15.157%
housing: 42.385%
apparel: 2.663%
transportation: 15.738%
medical care: 8.87%
recreation: 5.797%
education & communication: 6.81%
other goods and services: 3.159%
Un-
adjusted
12-mos.
Sep. Oct. Nov. Dec. Jan. Feb. Mar. ended
2020 2020 2020 2020 2021 2021 2021 Mar.
2021
All items.................. .2 .1 .2 .2 .3 .4 .6 2.6
Food...................... .1 .2 .0 .3 .1 .2 .1 3.5
Food at home............. -.3 .1 -.2 .3 -.1 .3 .1 3.3
Food away from home (1).. .6 .3 .1 .4 .3 .1 .1 3.7
Energy.................... 1.4 .6 .7 2.6 3.5 3.9 5.0 13.2
Energy commodities....... 1.4 .7 .5 5.1 7.3 6.6 8.9 22.0
Gasoline (all types).... 1.7 .7 .5 5.2 7.4 6.4 9.1 22.5
Fuel oil (1)............ -3.0 .7 3.3 10.2 5.4 9.9 3.2 20.2
Energy services.......... 1.3 .5 .9 .2 -.3 .9 .6 4.1
Electricity............. .8 .6 .3 .4 -.2 .7 .0 2.5
Utility (piped) gas
service.............. 3.1 .4 3.0 -.4 -.4 1.6 2.5 9.8
All items less food and
energy................. .2 .1 .2 .0 .0 .1 .3 1.6
Commodities less food and
energy commodities.... .5 .0 .0 .1 .1 -.2 .1 1.7
New vehicles............ .3 .3 .0 .4 -.5 .0 .0 1.5
Used cars and trucks.... 5.3 .9 -1.4 -.9 -.9 -.9 .5 9.4
Apparel................. -.4 -.9 .7 .9 2.2 -.7 -.3 -2.5
Medical care
commodities (1)...... -.6 -.7 -.4 -.2 -.1 -.7 .1 -2.4
Services less energy
services.............. .1 .1 .2 .0 .0 .2 .4 1.6
Shelter................. .1 .1 .1 .1 .1 .2 .3 1.7
Transportation services -.3 .2 1.3 -.6 -.3 -.1 1.8 -1.6
Medical care services... .0 -.3 -.1 -.1 .5 .5 .1 2.7
https://www.advisorperspectives.com/dshort/updates/2021/04/1...
The housing component is rent, not home prices. Something that people should note.
The index doesn't include housing, food, and energy either as those are considered 'too volatile'. It's no longer targeting what anybody actually consumes anymore
I don't know where you heard this, but it is not true. The CPI tracks rent/housing, food, energy, tuition, medical expenses, and everything else that people seem to think are excluded.
https://www.bls.gov/cpi/questions-and-answers.htm#Question_1...
https://www.bls.gov/cpi/questions-and-answers.htm#Question_1...
BLS tracks many inflation values, including those for housing, food, and energy, and they have done so for over 100 years.
You're confusing core CPI, which excludes them so analysts can see the difference, and the CPI values as reported generally in the media, which do include housing, food, and energy.
The most reported CPI is CPI-U (and is called CPI in the press), which is the CPI for urban consumers, which includes housing, food, and energy, and most comparable to historical and inflation values from other countries.
But BLS tracks many forms. If you want to learn about this read https://www.bls.gov/cpi/
You're confusing core CPI, which excludes them so analysts can see the difference, and the CPI values as reported generally in the media, which do include housing, food, and energy.
The most reported CPI is CPI-U (and is called CPI in the press), which is the CPI for urban consumers, which includes housing, food, and energy, and most comparable to historical and inflation values from other countries.
But BLS tracks many forms. If you want to learn about this read https://www.bls.gov/cpi/
Some comments below keep saying that CPI measures things like food and energy prices.
What we really mean is that Fed policy is dictated by the Core PCE rate, which specifically excludes food and energy prices. So sure, the PCE and CPI measures energy and food prices and other volatiles prices, but *FED POLICY is dictated by the CORE rates*, which specifically exclude those volatile components.
So de facto, no one (ie. the Fed) doesn't care about energy or food price inflation.
What we really mean is that Fed policy is dictated by the Core PCE rate, which specifically excludes food and energy prices. So sure, the PCE and CPI measures energy and food prices and other volatiles prices, but *FED POLICY is dictated by the CORE rates*, which specifically exclude those volatile components.
So de facto, no one (ie. the Fed) doesn't care about energy or food price inflation.
I really don't know how the Fed will unwind all this nonsense. It is sad that the Fed had to step in because we can't get the fiscal policy changes we need.
The Fed is the source of the problem.
They purchase assets to prevent those assets from declining, and encourage consumer behavior that exposes citizens to economic risk. Remember Greenspan extolling the virtues of tapping into your home equity? Or more recently, Bernanke describing QE as a permanent tool? Last year, Yellen even suggested that Congress should revisit the rules around Fed purchases of equities.
The Fed also encourages fiscal policy that reinforces a widening wealth gap and perpetuates moral hazards. We live in a society where the "experts" repeatedly push the notion that governments should stay out of growing sectors and inject life into collapsing sectors. Contrast this with what China does, where they back new enterprises in growing sectors while allowing deadwood firms to go under in lethargic sectors. [0] We in the USA have bailed out automakers that can't keep up with their foreign competition. We have bailed out banks that were too stupid to avoid buying billions of dollars of junk. We have even bailed out airlines during a period when business and international travel are at a deep nadir. Yet we find it difficult to spur new growth in the digital economy, whether by enabling competition against Big Tech or by investing in the infrastructure that supports semiconductor fabrication.
Don't look to the Fed for a solution.
[0] https://www.bloomberg.com/news/articles/2021-01-04/china-tel...
They purchase assets to prevent those assets from declining, and encourage consumer behavior that exposes citizens to economic risk. Remember Greenspan extolling the virtues of tapping into your home equity? Or more recently, Bernanke describing QE as a permanent tool? Last year, Yellen even suggested that Congress should revisit the rules around Fed purchases of equities.
The Fed also encourages fiscal policy that reinforces a widening wealth gap and perpetuates moral hazards. We live in a society where the "experts" repeatedly push the notion that governments should stay out of growing sectors and inject life into collapsing sectors. Contrast this with what China does, where they back new enterprises in growing sectors while allowing deadwood firms to go under in lethargic sectors. [0] We in the USA have bailed out automakers that can't keep up with their foreign competition. We have bailed out banks that were too stupid to avoid buying billions of dollars of junk. We have even bailed out airlines during a period when business and international travel are at a deep nadir. Yet we find it difficult to spur new growth in the digital economy, whether by enabling competition against Big Tech or by investing in the infrastructure that supports semiconductor fabrication.
Don't look to the Fed for a solution.
[0] https://www.bloomberg.com/news/articles/2021-01-04/china-tel...
Correct. We became addicted to debt as a stimulant for the economy rather than riding out real recessions that work to realign capital towards actual productive use cases (painful but restorative). And now we've hit the limits of the growth that can be squeezed from juicing the national debt. This ends in hyperinflation at worst and permanent stagflation at best.
They cannot. At this point, it probably cannot be reversed or even held where it is, without jacking up taxes and spending a great deal on transfers of various kinds. (Reducing the cost of healthcare and education for the poor to both improve their lot and for long-term benefits from a healthier and more educated workforce, or funding long-term infrastructure construction projects, ideally with well-paid working class jobs, etc.)
Up here in Canada we chose to pretty much just throw money at the working and middle class, especially with children, through the creation and then expansion of refundable low-income tax credits and a refundable credit for those with children.
Now comes to almost $1500 per household average if I recall, and that has barely held the line on the natural rapid trend towards wealth inequality after the 2008 crash. And even then, still not equally or very well. It has probably not sucked to be in the bottom 10% of poor people in Canada this much, since before the war. The price of housing and food being most of that.
Up here in Canada we chose to pretty much just throw money at the working and middle class, especially with children, through the creation and then expansion of refundable low-income tax credits and a refundable credit for those with children.
Now comes to almost $1500 per household average if I recall, and that has barely held the line on the natural rapid trend towards wealth inequality after the 2008 crash. And even then, still not equally or very well. It has probably not sucked to be in the bottom 10% of poor people in Canada this much, since before the war. The price of housing and food being most of that.
I think that, more often than not, they are part of the problem? Like favoring policies that promote spending and debt instead of long term investment and savings, in particular in those areas where it is really necessary.
I think of Bitcoin as a hail mary attempt to fix the inequality caused by central banking. I got a lot of flak for saying that I would trade the environmental damage done by bitcoin for negating central banking in another thread, but I believe that wealth inequality is the biggest humanitarian problem we face.
I don't see that Bitcoin has any hope of solving wealth inequality. If anything, it's a mechanism to entrench it.
Up to now: 1. only a fraction of a minority of the population have gained wealth from Bitcoin, and 2. those people had wealth enough to buy sufficient Bitcoin in the first place.
Up to now: 1. only a fraction of a minority of the population have gained wealth from Bitcoin, and 2. those people had wealth enough to buy sufficient Bitcoin in the first place.
Wealth inequality comes when you can create money out of thin air and buy bonds with it, injecting cash into the financial system. Bond owners get to sell their devaluing assets to the fed at inflated prices. Those profits get put back into the system via buying stocks, bitcoin, houses and other rare assets. The people who gain the most are the people who already own this assets, which is typically not the poor.
Bitcoin cannot be created out of thin air. You can't arbitrarily decide to inject more of it into the system. When you own Bitcoin, your holdings cannot be debased. Since poor people's wealth is mostly cash, debasement of currency hurts them the most.
There is a tragic irony, in where if a poor person throws their savings into Bitcoin, they are chastised as being foolish and preyed upon, and they need to be protected. If they keep their savings in fiat, they get debased (USD debased by 20% in 2020, 320% in last 20 years) as inflation eventually catches up. The Feds took away the ability to save. A Bank of America savings accounts offer 0.01% APY, 0.05% if you have more money. No one believes in a future where saving is worth anything.
Bitcoin cannot be created out of thin air. You can't arbitrarily decide to inject more of it into the system. When you own Bitcoin, your holdings cannot be debased. Since poor people's wealth is mostly cash, debasement of currency hurts them the most.
There is a tragic irony, in where if a poor person throws their savings into Bitcoin, they are chastised as being foolish and preyed upon, and they need to be protected. If they keep their savings in fiat, they get debased (USD debased by 20% in 2020, 320% in last 20 years) as inflation eventually catches up. The Feds took away the ability to save. A Bank of America savings accounts offer 0.01% APY, 0.05% if you have more money. No one believes in a future where saving is worth anything.
> Since poor people's wealth is mostly cash
A reasonable definition of 'poor' is holding no net wealth, or less - which applies to 30-40% of households in Scotland (for example):
https://www.gov.scot/publications/wealth-assets-scotland-200...
So your arguments here don't apply for my understanding of 'poor'. You have to be approaching median wealth before those arguments start to apply, if they do at all.
A poor person is not greatly affected by debasement of their savings in currency, because they don't have any savings.
A poor person is not considering throwing their savings into Bitcoin, because they don't have any savings (beyond essential cash).
A reasonable definition of 'poor' is holding no net wealth, or less - which applies to 30-40% of households in Scotland (for example):
https://www.gov.scot/publications/wealth-assets-scotland-200...
So your arguments here don't apply for my understanding of 'poor'. You have to be approaching median wealth before those arguments start to apply, if they do at all.
A poor person is not greatly affected by debasement of their savings in currency, because they don't have any savings.
A poor person is not considering throwing their savings into Bitcoin, because they don't have any savings (beyond essential cash).
https://en.wikipedia.org/wiki/Wealth_inequality_in_the_Unite...
"The bottom half of the income distribution had a huge share of its wealth tied up in real estate while owning essentially no shares of corporate stock. The top 1 percent, by contrast, wasn't just rich — it was specifically rich in terms of owning companies, both stock in publicly traded ones ("corporate equities") and shares of closely held ones ("private businesses")...So the value of those specific assets — assets that people in the bottom half of the distribution never had a chance to own in the first place — soared.
NPR also reported in 2017 that the bottom 50% of U.S. households (by net worth) have little stock market exposure (neither directly nor indirectly through 401k plans), writing: "That means the stock market rally can only directly benefit around half of all Americans — and substantially fewer than it would have a decade ago, when nearly two-thirds of families owned stock."
A poor person is not greatly affected by debasement of their savings in currency, because they don't have any savings.
Debasement eventually shows up in the form of inflation of consumer goods prices. And inflated housing prices makes it nearly impossible for future generations to ever own a home, depending on the city.
"The bottom half of the income distribution had a huge share of its wealth tied up in real estate while owning essentially no shares of corporate stock. The top 1 percent, by contrast, wasn't just rich — it was specifically rich in terms of owning companies, both stock in publicly traded ones ("corporate equities") and shares of closely held ones ("private businesses")...So the value of those specific assets — assets that people in the bottom half of the distribution never had a chance to own in the first place — soared.
NPR also reported in 2017 that the bottom 50% of U.S. households (by net worth) have little stock market exposure (neither directly nor indirectly through 401k plans), writing: "That means the stock market rally can only directly benefit around half of all Americans — and substantially fewer than it would have a decade ago, when nearly two-thirds of families owned stock."
A poor person is not greatly affected by debasement of their savings in currency, because they don't have any savings.
Debasement eventually shows up in the form of inflation of consumer goods prices. And inflated housing prices makes it nearly impossible for future generations to ever own a home, depending on the city.
> Debasement eventually shows up in the form of inflation of consumer goods prices
Sure. But nominal price inflation doesn’t matter to the poor as a class, but to those on fixed nominal income (e.g., many retirees, or people dependent on benefit programs with fixed rather than indexed benefit levels.)
Real increases in prices of goods disproportionately in demand at lower income levels matters to the poor, but that’s a different issue than general inflation.
> And inflated housing prices makes it nearly impossible for future generations to ever own a home, depending on the city.
Real increase in housing prices (or, more to the point, increases in housing prices relstive to a particular poor persons income), which has nothing to do with currency debasement/devaluation or general inflation, makes homeownership less accessible.
Sure. But nominal price inflation doesn’t matter to the poor as a class, but to those on fixed nominal income (e.g., many retirees, or people dependent on benefit programs with fixed rather than indexed benefit levels.)
Real increases in prices of goods disproportionately in demand at lower income levels matters to the poor, but that’s a different issue than general inflation.
> And inflated housing prices makes it nearly impossible for future generations to ever own a home, depending on the city.
Real increase in housing prices (or, more to the point, increases in housing prices relstive to a particular poor persons income), which has nothing to do with currency debasement/devaluation or general inflation, makes homeownership less accessible.
Real prices have been increasing. They approach bubble territory.
Home price to income ratio: https://www.longtermtrends.net/home-price-median-annual-inco...
Home price to income ratio: https://www.longtermtrends.net/home-price-median-annual-inco...
> poor people's wealth is mostly cash
poor people tend to be net debtors considering dollar-denominated assets and liabilities, and to have most of their gross value of assets (even ignoring short-term consumables like perishable food) in physical goods, not cash or other dollar-denominated assets.
poor people tend to be net debtors considering dollar-denominated assets and liabilities, and to have most of their gross value of assets (even ignoring short-term consumables like perishable food) in physical goods, not cash or other dollar-denominated assets.
With 60,000x gains, you didn't need to buy much Bitcoin to become rich. Of course, winning lottery tickets have even better odds but they're not solving inequality either.
An argument has been made that "elites" were "brainwashed by the system" to believe that crypto would fail and thus they never bought in. Instead, "outsiders" bought crypto and may one day eclipse the old elites. However, crypto's "outsider" early adopters were mostly middle-class techies not working-class people. So yeah, Bitcoin is still not solving anything.
An argument has been made that "elites" were "brainwashed by the system" to believe that crypto would fail and thus they never bought in. Instead, "outsiders" bought crypto and may one day eclipse the old elites. However, crypto's "outsider" early adopters were mostly middle-class techies not working-class people. So yeah, Bitcoin is still not solving anything.
Yeah, if you were in on the ground floor and if you had conviction not to sell once you 10x or 100x. Few people can make that claim.
But meanwhile there have been several other crypto projects that have cropped up that have seen life-changing gains and are actually built on sustainable, value-adding platforms (Ethereum, Uniswap, Synthetix, Aave, etc).
But meanwhile there have been several other crypto projects that have cropped up that have seen life-changing gains and are actually built on sustainable, value-adding platforms (Ethereum, Uniswap, Synthetix, Aave, etc).
> winning lottery tickets have even better odds but they're not solving inequality either.
lotteries are cancer and I'm in no way a supporter of them (except to acknowledge they may be the best answer to a problem that has no good solutions), but the model does work like a vice tax, in that a substantial fraction of ticket proceeds go toward various social and investment programs.
the prizes only consume 20-70% of the revenue (specific fraction depends on the game).
lotteries are cancer and I'm in no way a supporter of them (except to acknowledge they may be the best answer to a problem that has no good solutions), but the model does work like a vice tax, in that a substantial fraction of ticket proceeds go toward various social and investment programs.
the prizes only consume 20-70% of the revenue (specific fraction depends on the game).
Then any new asset type, IPO, or security also entrenches wealth inequality for the same reasons. Unfortunately that would have to happen to get away from using fiat currency.
My original comment was just saying that I think Bitcoin is the best alternative we have, not that it would necessarily succeed.
My original comment was just saying that I think Bitcoin is the best alternative we have, not that it would necessarily succeed.
Do explain how Bitcoin fixes wealth inequality? Genuinely curious…
Not a "fix" (I should have picked my words more carefully), but it would stem the bleeding from inflation.
The government can't print 1.9 trillion more Bitcoin overnight so the unions and lobbies they serve can get a bail out.
You’re explaining how no more Bitcoin can be generated once all is mined. That’s not solving any wealth inequality. More so because lower income people own almost zero BTC.
I don't think wealthy inequality will ever be "solved" and I don't think it's necessarily a bad thing unless it's extreme inequality. We need some kind of incentives for people to go ahead and build stuff.
Imagine if you were paid in BTC or saved money into BTC, you won't get diluted over a long enough time, that's the promise. When you get paid in BTC, someone gives you theirs, it's a zero-sum game.
Also, since nobody can print more of it, if someone goes ahead and plays around with high leverage and gets wiped out, their losses won't be socialized by bailouts.
Imagine if you were paid in BTC or saved money into BTC, you won't get diluted over a long enough time, that's the promise. When you get paid in BTC, someone gives you theirs, it's a zero-sum game.
Also, since nobody can print more of it, if someone goes ahead and plays around with high leverage and gets wiped out, their losses won't be socialized by bailouts.
I’ve literally never heard of anyone refusing to work for fiat currency, due to concerns that it will be diluted.
On the other hand, I’ve heard from innumerable people that crypto’s volatility drives them away.
On the other hand, I’ve heard from innumerable people that crypto’s volatility drives them away.
Because they never had the alternative to fiat. Some professional players [1], tech workers [2], city workers [3], etc, are starting to get portions of their salaries in BTC. You can always take fiat from work and save it in BTC as well.
It won't be this volatile forever, as the market cap gets larger, the volatility goes down.
1: https://ftw.usatoday.com/lists/nfl-draft-trevor-lawrence-cry...
2: https://finance.yahoo.com/news/olaf-carlson-wee-first-coinba...
3: https://www.newsweek.com/miami-passes-resolution-allow-payin...
It won't be this volatile forever, as the market cap gets larger, the volatility goes down.
1: https://ftw.usatoday.com/lists/nfl-draft-trevor-lawrence-cry...
2: https://finance.yahoo.com/news/olaf-carlson-wee-first-coinba...
3: https://www.newsweek.com/miami-passes-resolution-allow-payin...
But all of these people make significantly larger sums than any average person. And, for sports stars, they make lots of side-money via endorsements.
To reiterate my earlier points, none of them are doing this due to dilution concerns; rather the usual crypto speculation to cash out massive gains.
This neither fixes nor mitigates any sort of wealth inequality.
To reiterate my earlier points, none of them are doing this due to dilution concerns; rather the usual crypto speculation to cash out massive gains.
This neither fixes nor mitigates any sort of wealth inequality.
What happens to wages when the QE occurs? Nothing, they stagnate.
What happens to real estate and securities? They skyrocket.
I don't care if it's cryptocurrency that we end up using. As long as we can pay people in some kind of security that cannot be inflated, then wages cannot be silently garnished via inflation.
I don't care if it's cryptocurrency that we end up using. As long as we can pay people in some kind of security that cannot be inflated, then wages cannot be silently garnished via inflation.
I homebrew, and getting hold of corny kegs at reasonable prices has been hard this year here in the UK. 2019 is was 3 for £100 delivered, and even cheaper if you could buy direct from somewhere. This year even 2nd hand they are £65 plus, though new are still £85ish if you can find them.
It's been a funny year for hobbies!
It's been a funny year for hobbies!
Corny prices were creeping up for a while since the obsolete soda kegs got scarce a while ago. I haven't brewed in years, so idk how that's changed lately
In 2019 you could by 10 plus in the USA for 25 dollars a keg, plus shipping. Even cheaper if you were lucky. That translated into about £35 a keg here from a cheap homebrew shop, though many charged closer to £50 for the good ones. Now the prices are just higher. Not sure if supply has dried up, or the same supply and more buyers but all the homebrew shops I use have had brilliant years for profits.
Baseball cards are in the same boat in terms of demand, although the prices for most are not increasing that much. At least in the last few months, and in certain areas of the country. I've gone from selling a few cards from my hall-of-famer collection per year to multiple people asking to pay for my entire collection. And people are asking whether I have football, basketball, and hockey cards. Which has literally never happened before.
Sports cards in general have gotten to the point of absurdity.
Grown men fighting each other in the aisles of Walmart trying to clear the shelves of NBA cards. The Michael Jordan PSA 10 went from $100k, to $370k to over $700k very rapidly, and has since declined back to around 300k or so. People are buying retail boxes from scalpers for like 5x, just purely on hype and FOMO.
As someone whose been into cards before the covid meltdown, this has all been wild.
Grown men fighting each other in the aisles of Walmart trying to clear the shelves of NBA cards. The Michael Jordan PSA 10 went from $100k, to $370k to over $700k very rapidly, and has since declined back to around 300k or so. People are buying retail boxes from scalpers for like 5x, just purely on hype and FOMO.
As someone whose been into cards before the covid meltdown, this has all been wild.
> Blame the Fed for creating asset price inflation including stocks, housing, collectibles, etc.
Isn’t the FED just following government orders and isn’t the government elected by the people?
Isn’t the FED just following government orders and isn’t the government elected by the people?
No. The FED is "supposed" to be independent from the government and do what it thinks is best. But over the past 20 years it feels like they have been increasingly politicized. I'm not sure to what extent it has modified their decision making though.
In theory, no. The Federal Reserve has a mandate from congress to achieve full employment and stable prices, but can do so how they see fit. Their actions need not be ratified by the executive branch. The board of governors are also appointed for 14 year terms.
A few weeks ago I checked the price of the black lotus card and OMG...
Around $100k in 2018 and around $400k now if mtgprice.com is reliable.
yeah that's crazy. I'm never into cards and only read about it in the excellent reddit blogger patches765.
https://www.reddit.com/r/patches765/comments/5isji2/intellig...
BTW his blogs are really of top quality and I can't help reading through to deep night.
https://www.reddit.com/r/patches765/comments/5isji2/intellig...
BTW his blogs are really of top quality and I can't help reading through to deep night.
It would be hard to claim that quantitative easing and stimulus has "nothing" to do with asset prices but surely the biggest change in the past year has been the incredible shift in spending habits. White collar workers have had way fewer expenses (work-from-home) and way less lifestyle-based things to spend their discretionary income on. No vacations, no dining out, no new clothes etc. People have been at home and looking back into old hobbies. Money flowing into collectibles and other alternative investments has been a straightforward result of that.
Bingo. I no longer spend $150 on commuting to work a month plus buying lunch. I spent some of that now on games for a console I had as a kid but could not afford to buy a whole lot of games for.
In the past 2 years some games went up some 100% or more in price. I bought a game 6 months ago for $90 I see listings for it on ebay for $150. Its pretty insane.
In the past 2 years some games went up some 100% or more in price. I bought a game 6 months ago for $90 I see listings for it on ebay for $150. Its pretty insane.
Never take ebay listings as a guide. Always look at past sales instead. The reason is you get a lot of chancers on ebay listing items at inflated prices on Buy It Now with the hope that someone rich enough and desperate enough will happily pay the higher cost. But more often than not, the higher Buy It Now listings time out and get re-listed over and over again.
The real market value of games is seen in the auctions and Facebook retro groups (literally the only reason I have a Facebook account is for collecting retro computer parts and games. If you find the right group you can get some pretty good deals).
The real market value of games is seen in the auctions and Facebook retro groups (literally the only reason I have a Facebook account is for collecting retro computer parts and games. If you find the right group you can get some pretty good deals).
I stated ebay because it was where I bought the game originally.
I usually use https://www.pricecharting.com/ to check the trends and make sure I am not overpaying.
The games I want aren't available on facebook. People now know their worth. You get more common games that discs aren't even worth it as coasters to me. I have mostly given up them.
> I stated ebay because it was where I bought the game originally.
There's nothing wrong with quoting ebay, I use it all the time myself. Just don't pay any attention items listed with a Buy It Now price because they're often full of chancers. Just because it's listed at a price it doesn't mean anyone will pay it.
What you did is a common trap that new reporters do when they talk about how expensive collecting is. They run headlines like "your old junk could be a gold mine" but pad their articles out with hugely speculative Buy It Now prices that no sane person would actually pay.
> The games I want aren't available on facebook
Which games? I collect for basically every platform across basically every genre and I've never had an issue getting obscure games from Facebook. I might be able to help you out here.
There's nothing wrong with quoting ebay, I use it all the time myself. Just don't pay any attention items listed with a Buy It Now price because they're often full of chancers. Just because it's listed at a price it doesn't mean anyone will pay it.
What you did is a common trap that new reporters do when they talk about how expensive collecting is. They run headlines like "your old junk could be a gold mine" but pad their articles out with hugely speculative Buy It Now prices that no sane person would actually pay.
> The games I want aren't available on facebook
Which games? I collect for basically every platform across basically every genre and I've never had an issue getting obscure games from Facebook. I might be able to help you out here.
this bubble will end badly
Is there any reporting or other insight on this? My first intuition is that services are way down because of Covid and the money for people with stable jobs is being redirecting elsewhere inflating the cost of collectibles, savings, investment, and other goods mixed with distribution and manufacturing slowdowns worldwide.
Construction is inflated because the cost of materials have gone way up due to ongoing shipping reductions and factory closures due to Covid. Housing prices are inflated (in places where people want to live) because of long-term bad housing policy and NIMBYism causing slow and the wrong kind of new construction. WFH and eviction bans are likely causing a shift in housing demand.
I wouldn't be surprised if the Fed has some blame. I think there's been a belated reckoning since 2008. But it's a pandemic that has lasted over a year now and there are a bunch of second-order effects out there.
Construction is inflated because the cost of materials have gone way up due to ongoing shipping reductions and factory closures due to Covid. Housing prices are inflated (in places where people want to live) because of long-term bad housing policy and NIMBYism causing slow and the wrong kind of new construction. WFH and eviction bans are likely causing a shift in housing demand.
I wouldn't be surprised if the Fed has some blame. I think there's been a belated reckoning since 2008. But it's a pandemic that has lasted over a year now and there are a bunch of second-order effects out there.
Housing prices are high because the stock market is high and interest rates are rock bottom. The higher the stock market goes and the lower interest rates go, the more house prices are juiced. Anyone without exposure to the stock market will never be able to afford a house, ever. That's where the income inequality is really stark.
>the more house prices are juiced
More institutions are buying homes and competing with the homeowners, because bonds are very-low yield and the stock market overpriced in terms of P/E.
More institutions are buying homes and competing with the homeowners, because bonds are very-low yield and the stock market overpriced in terms of P/E.
While Fed policy and interest rate cuts certainly gave fuel to the fire, there's also just plain old supply & demand that is causing asset prices to rise.
Houses? Turns out when you force people to stay home all day they suddenly decide apartment living sucks (more demand). It also turns out, people are resistant to the idea of having strangers tour their home during a pandemic (restricted supply).
Stocks? Crypto? Turns out when you give people lots of money with no strings attached and then remove their favorite options for spending it (restaurants, travel, entertainment), they will invest or gamble it instead.
Collectibles? Turns out, in scary times, bored people with money will start returning to childhood comforts like trading cards and nostalgia.
Etc. Etc.
This idea that the Federal Reserve is some all-powerful puppet master is a little overblown. Interest rates are insanely influential, but they pale in comparison to the forces created by the whims of the crowd.
Houses? Turns out when you force people to stay home all day they suddenly decide apartment living sucks (more demand). It also turns out, people are resistant to the idea of having strangers tour their home during a pandemic (restricted supply).
Stocks? Crypto? Turns out when you give people lots of money with no strings attached and then remove their favorite options for spending it (restaurants, travel, entertainment), they will invest or gamble it instead.
Collectibles? Turns out, in scary times, bored people with money will start returning to childhood comforts like trading cards and nostalgia.
Etc. Etc.
This idea that the Federal Reserve is some all-powerful puppet master is a little overblown. Interest rates are insanely influential, but they pale in comparison to the forces created by the whims of the crowd.
Well, that particular sold for so much b/c it is a 9.6 graded sealed copy - even though the game itself sold 60 million copies, there are extremely few copies still available in such pristine shape. I'd argue it's more like the Honus Wagner baseball card or Action Comic #1.
The author covers this. While there may be fewer copies in this condition, that condition isn't really intrinsically interesting in the way something that is actually rare is.
At least for me, and apparently the author, the idea of a rare item being more valuable makes sense, especially if the rare thing is unusual or has attributes unlike other, commonly available things. Obscure computer hardware is like this for me. It's interesting because the experience of using/looking at it is unlike what you'll get from anything else. Even if it's a purely inferior experience, it's novel.
In this case, the only thing that makes this different from the 60 million other copies of SMB is it's the most cleanly preserved copy in retail packaging and shrink wrap.
Now, I understand for some collectors, whose only purpose for these is to put them in a display case or collection, that is how they'll experience this. But IMO there's nothing special about the game itself, nothing intrinsic to the item. If you so much as scuffed or opened the packaging, it'd lose all its value, whereas those other rare games and collectibles can be used for their original purpose (assuming you're careful and don't damage them) without destroying their value.
It's all subjective though, so more power to the collectors who will treasure shrink wrapped copies of things.
At least for me, and apparently the author, the idea of a rare item being more valuable makes sense, especially if the rare thing is unusual or has attributes unlike other, commonly available things. Obscure computer hardware is like this for me. It's interesting because the experience of using/looking at it is unlike what you'll get from anything else. Even if it's a purely inferior experience, it's novel.
In this case, the only thing that makes this different from the 60 million other copies of SMB is it's the most cleanly preserved copy in retail packaging and shrink wrap.
Now, I understand for some collectors, whose only purpose for these is to put them in a display case or collection, that is how they'll experience this. But IMO there's nothing special about the game itself, nothing intrinsic to the item. If you so much as scuffed or opened the packaging, it'd lose all its value, whereas those other rare games and collectibles can be used for their original purpose (assuming you're careful and don't damage them) without destroying their value.
It's all subjective though, so more power to the collectors who will treasure shrink wrapped copies of things.
Author here.
Yes, this is my point. The Wagner card, or Action Comics #1 or Atari 2600 Air Raid are all rare items on their own without their rarity having to be defined in an extraordinarily narrow way to establish that they are in fact rare.
With SMB on the other hand you have to define that copy as a "one of a kind copy of a thing there are millions of out there", which is different from the above examples.
The point that I was mainly going for in the post was that just a few years ago it didn't seem like the hobby was going to go down this route. Until recently everyone just assumed that a game like Air Raid (or the NES World Championship carts used in tournaments in the 1980s which are also extremely rare but also aren't well known outside collecting circles) would be the hobby's holy grail because that is what collectors were most fascinated by.
Then WHAMMO, copies of SMB started going berzerk and completely obliterating the records set a few years ago for those rarer games, which I think has caught everyone in the retro gaming collecting community off guard since it is such a common game. Which I thought was worth writing something about, using Air Raid and examples from other hobbies as comparisons.
Yes, this is my point. The Wagner card, or Action Comics #1 or Atari 2600 Air Raid are all rare items on their own without their rarity having to be defined in an extraordinarily narrow way to establish that they are in fact rare.
With SMB on the other hand you have to define that copy as a "one of a kind copy of a thing there are millions of out there", which is different from the above examples.
The point that I was mainly going for in the post was that just a few years ago it didn't seem like the hobby was going to go down this route. Until recently everyone just assumed that a game like Air Raid (or the NES World Championship carts used in tournaments in the 1980s which are also extremely rare but also aren't well known outside collecting circles) would be the hobby's holy grail because that is what collectors were most fascinated by.
Then WHAMMO, copies of SMB started going berzerk and completely obliterating the records set a few years ago for those rarer games, which I think has caught everyone in the retro gaming collecting community off guard since it is such a common game. Which I thought was worth writing something about, using Air Raid and examples from other hobbies as comparisons.
The connection between the "assetization" of pop culture collectibles and the focus shift towards popularity over obscurity is illuminating. This reminds me of the recent explosion in the Pokemon card market [1], which struck me as a similar phenomenon where it seems like the market is being controlled by outsider millionaires more than by collectors with a lot of investment in the series.
On the other hand, when I see that picture of the pristine SMB cart, I can kind of understand the hype. I couldn't imagine myself ever being that hardcore of a Nintendo fan, but if I were as infatuated with Mario as I am in some of the things I actually collect myself, I think I would be extremely jealous of whoever owns that cart.
[1] https://fortune.com/2021/03/29/pokemon-cards-value-sale-coll...
On the other hand, when I see that picture of the pristine SMB cart, I can kind of understand the hype. I couldn't imagine myself ever being that hardcore of a Nintendo fan, but if I were as infatuated with Mario as I am in some of the things I actually collect myself, I think I would be extremely jealous of whoever owns that cart.
[1] https://fortune.com/2021/03/29/pokemon-cards-value-sale-coll...
This author's argument is poor. Anyone can drop a copy of SMB in the toilet. You can produce more. You cannot produce more of the $660k copy.
Rarity depends on more factors than "total in print".
Rarity depends on more factors than "total in print".
Author here. Anybody can drop a copy of SMB in "a" toilet, but nobody can drop one in mine. No more can or will be produced.
Of course, nobody wants a copy of SMB that has been dropped in my toilet, but my point wasn't that people are going to suddenly start collecting toilet copies of SMB, but rather that nobody was particularly interested in something as arbitrarily defined as the "highest graded, sealed, hangtab version" of SMB either until someone created a narrative that convinced them it was worth something.
Of course, nobody wants a copy of SMB that has been dropped in my toilet, but my point wasn't that people are going to suddenly start collecting toilet copies of SMB, but rather that nobody was particularly interested in something as arbitrarily defined as the "highest graded, sealed, hangtab version" of SMB either until someone created a narrative that convinced them it was worth something.
Yep.
Price is a function of rarity and desirability. SMB is a household name so the market of individuals who would assign value to it is broader than a game like Air Raid.
Author is deliberately obtuse. Or just obtuse.
Price is a function of rarity and desirability. SMB is a household name so the market of individuals who would assign value to it is broader than a game like Air Raid.
Author is deliberately obtuse. Or just obtuse.
Author here. I'm not being obtuse, about half of the blog post is focused on how Mario is a household name as an explanatory factor. Its odd simply because other hobbies haven't historically cared as much about that name recognition thing (which admittedly probably says more about how odd they are than about how odd it is that SMB is valuable, but still).
My thoughts are that some people have a lot of money - so much that a sum of $660k is not as significant to them as it would be to the majority of people. Stuff is worth what people are willing to pay for it. But the other part of that is the value subjective value of the payment does not equal the objective numbers ($100 is a lot to me, but there are others who would waste that much without second thought).
I suspect a lot of this sort of illiquid asset inflation is a bid to cache wealth in difficult to track forms. The last decade of interest-rate-driven income inequality has turned into a corresponding wealth inequality, but some combination of inflation and leftist swings in the government could threaten that wealth.
Remember Terminator 2, where a prepper Sarah Connor had a shipping container of guns buried in the desert? A smattering of fancy houses in politically disparate jurisdictions stuffed with art and sealed copies of SMB might be the modern upper class equivalent.
Remember Terminator 2, where a prepper Sarah Connor had a shipping container of guns buried in the desert? A smattering of fancy houses in politically disparate jurisdictions stuffed with art and sealed copies of SMB might be the modern upper class equivalent.
The same thing happens in Magic The Gathering.
There are cards from Alpha/Beta etc. that have an exact same number of printings as other cards worth 10-100x more
The value of short-print cards is to collectors who want the entire set of "Alpha" cards regardless of what the specific card might be.
In the same way, there are probably collectors who want to own the entire collection of NES games or Atari games who would highly value an obscure game with a short print-run.
There are cards from Alpha/Beta etc. that have an exact same number of printings as other cards worth 10-100x more
The value of short-print cards is to collectors who want the entire set of "Alpha" cards regardless of what the specific card might be.
In the same way, there are probably collectors who want to own the entire collection of NES games or Atari games who would highly value an obscure game with a short print-run.
Wait till this guy hears about NFTs
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Inflation is completely out of control and no one is talking about it.
Blame the Fed for creating asset price inflation including stocks, housing, collectibles, etc. This is why income inequality has exploded, because everyone with assets like stocks have seen a huge increase in their wealth, and people without any assets which are the lower income people get left behind.