Thanks. I searched the net after posting the Q and your answer was universal. There really was no wealth unless you were one of the few who cashed out at the top of the “moments”. Like buying a boat for 500 and someone want to give me 5000. Unless I take it at that moment the boats value is not 5000.
Thanks for the post.
There’s always a certain amount of fluidity in “value”, generally tied to how much someone is willing to pay for it. Your boat is a good example of that.
Now that you have the $4500 profit in hand, what you do with it, where you put it will influence whether or not you retain it, gain more from it or lose some or all of it.
Still, whenever dealing with hard goods, some of the value is related to producing them. A market that has been flooded can & will at times act counter to this rule of thumb if inventories get too high. A producer may sell off at a loss to stay afloat, but that kind of thing generally doesn’t last & depends a lot on how much distortion there is in a market.
A distortion can be something like government subsidies high enough to make additional production viable despite rising inventories. Beyond propping up a dying industry, like buggy whip manufacturers to keep jobs, other considerations may come into play.
Take an industry the might be needed for building up national defense if the nation was attacked, like making steel. Currently, we import a lot of the steel we use domestically, due in a large part to environmental regulations. The industry was given some trade protections, as it’s not the kind of industry you can build from scratch overnight & begin output the next day.