Once upon a time, people believed:
That tulip bulbs were worth more than houses.
That the price of a house could only go up, never down.
That one man knew a secret which enabled him to beat every other known investment, no matter what the economy was doing.
It’s true. People really did believe these things. And they never thought to ask why or how, until it was too late. In each example, supposedly sophisticated investors put vast sums of money on these beliefs. And in each example, people like you and me, who never had the means to get involved, wound up getting hurt.
So why does this happen over and over, throughout history? I think that, when one of these things gets started, the first investors often know that it is a shell game, but they can still make a killing if they get out in time. Or someone they know brings them in with the simple appeal to “trust me”. Soon the thing gathers momentum, and people get involved based on the idea that serious money is being made, and they are afraid of being left behind. Once that happens, logic flies out the window, and greed completely takes over.
But something always happens, and the whole thing collapses. And many of those who knew that they only had to get out at the right time, didn’t.
It would be so much easier if people would just listen to our storytellers and songwriters. These artists could tell you that, if it seems too good to be true, it probably is. The characters in the songs below “just knew” that they had a surefire plan to make a quick buck. And of course, it wasn’t that simple.
Rickie Lee Jones: Easy Money
Robert Earl Keen: The Road Goes On Forever