popular financial delusions

Some things never change. Popular Financial Delusions: Why the crowd is almost always wrong � A great financier�s observations on what men will believe – for money! by Robert L. Smitley, was written in 1933. What is really scary is so many of his comments describe the situation today!

Smitley observes that the people running banks, and Wall Street investments who claim to know more than their clients so they should be trusted to take care of the money, actually don�t understand very much about finance. Furthermore, they don�t really care because they personally are making vast fortunes participating in the great wash of money being moved around. Lots of authority, no responsibility for considerable personal gain. But the US economy was built on shady promises, shell games and trickery.

This lovely book describes all manner of delusions that were evident in 1933 to this observant bookseller and author. Clearly we haven’t learned much, either as delusioners or delusionees. Certainly the mechanisms for the application of the delusions has changed – hedge funds, derivatives, and program trading, for example. Some of the latest schemes are breathtakingly convoluted. However, some of the old delusions don’t appear to have been revisited – just a matter of time, no doubt.

What is the current state of these delusions? How are they manifest today? Should we be on the look-out for some of the classic delusions to reappear as the hottest new thing in finance, economics and/or government monetary policy?

the initial delusions?
resisting a depression
mistaking effects for causes
good-bye to capitalism!
let the bank do it!
the farm relief racket
the investment delusion
the great credit mystery
indigestion in the universities
permanent methods for saving savings
currency inflation illusions
the pre-diagnostic delusion
the dupe of the mortgage
ave et vale – the investment trust
futility of future forecasting
the religious aspect
the politician and the octopus
the outrage of nationalism
buncombe of the machine age scare
the plight of the hoarders
wall street
the stock speculator
the eternal hope of easy money
that economic problems can be solved!
the gold standard
the iconoclastic deluge
speed or quantity?
the`spectre of political paternalism
the delusion of the mob mind
lost: our individuality!
the fear of monopoly
making the sun and moon stand still
the fallacy that history does not repeat
the delusion of living well under unstable or no money
generalizing from an incident
the individual does not count
the absurdity of compound interest
that the present system is perfect
the time element
that economic law can be codified
that authorities are always right
that anyone can run a bank
that bankers are always right
some statistical insanities
about economists
the delusion of forgetting biology
political delusions
the importance of gold
in which there is disappointment
real capital is necessary for economic stability
iconoclasm of delusions theory
old age protection
mob psychology must spend its force
the delusion of government
the gold clause
an act of god?
the religious approach
communism, fascism, et al
the minimum wage fallacy
can human nature be harnessed?
commodity money delusion
industrial pensions
delusions of the past
summary and final delusion
anti-delusion bibliogragy