Adventures in the Imaginary Economy

Pygalgia asks a really good question:

Yesterday I jokingly posted the results of "what is your blog worth?". I found some amusement that somehow this blog could have a dollar value, since it produces nothing tangible or marketable.

But it got me thinking about the inflating value that markets place on assets that have no intrinsic worth. As Citibank is reporting a loss of $11 billion dollars in what are basically unregulated markets that are based purely on speculation, I'm wondering where the next shoe will drop....

I'm no economist, but I wonder how much of our financial system is really one big ponzi scheme? The real estate bubble assumed that there would always be someone who would pay more for the house in the future. The stock market assumes that someone will be willing to pay more for the stock tomorrow. And the federal budget assumes that other countries will continue to buy our debt.

How many of these "assets" have any more intrinsic value than this blog?

If you stop to think about just how much of the economy is purely imaginary, how much of it is Tinkerbell depending on us all to Clap Louder! to keep it from collapsing, you could wake up in a cold sweat at night. Better not to think too hard about it...