Let’s Try to Make Sense of That $600,000 Rock NFT

Could it be that there’s just too much money sloshing around?

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Today’s Agenda

Between an NFT Rock and a Hard Place

For a while in 1975, the hottest toy in America was the Pet Rock. It was a rock you treated like a pet. It cost $4, or about $20 in today’s money. It was ridiculous. But it made its creator rich and maybe helped people forget about Vietnam and Watergate for a bit.

Recently Justin Sun, CEO of the crypto platform TRON, bought a digital picture of a rock. It cost $611,170, or $3.1 million in 1975 money. It’s ridiculous. Here’s a picture of the picture of the rock he bought, which you can have for free, as a treat:

That’s a pretty neat picture of a rock, I guess. But when society collapses, any Pet Rock will be much more useful, not only as a companion but also as, say, a self-defense device or a makeshift wheat mill. Lots of uses for rocks, when you think about it. That picture of the rock will be gone forever.

People paying the median price of a California home for an NFT of a rock may not be a societal crisis. Justin Sun got some relatively cheap publicity for all his crypto what-nots. But it is a honking red-light alarm that something may be badly out of whack with our markets, warns Jared Dillian. One possibility: There’s too much money sloshing around out there with nowhere to go, so people feel free to blow it on pictures of rocks. It is perhaps no coincidence that the Beanie Babies bubble expanded and burst more or less in sync with the dot-com bubble 20 years ago, Jared writes.

The world’s premier money-pumper is the U.S. Federal Reserve. It meets this week to talk central-bank shop. One of the topics on its agenda is wealth inequality and what to do about it. Lisa Abramowicz has a suggestion: Stop giving so much money to rich people. The Fed’s jello-soft monetary policy keeps markets grossly inflated. This favors the wealthy but doesn’t seem to help the economy or the less-wealthy when all the money is tied up in bonds and pictures of rocks.

Every little bit helps, the Fed might argue, and the economy is still far too shaky to end stimulus now, especially with the delta variant of Covid surging everywhere. But it could at least start dialing back the quantitative easing, writes Bloomberg’s editorial board. QE is the wrong medicine for what ails the economy now and limits the Fed’s policy options if the economy should suddenly boom. Although it could always start buying pictures of rocks.

Bonus Inflated-Asset Reading: Cheap federal loans won’t help first-time homebuyers compete with Wall Street. — Conor Sen 

You Don’t Have to Go to That Wedding

For years, millennials have been scolded that their coffee and avocado-toast habits are financially ruinous. It turns out the real financial ruin was the friends they made along the way. Because all of those friends keep getting married and having babies and revealing genders and doing other things that demand your presence, and also presents. And all of that stuff costs a lot of money, writes Erin Lowryenough to load many millennials with even more debt. And it’s only going to get worse next year, or in 2023, or whenever Covid finally releases us from limbo. But there are ways to celebrate your friends’ big life events without going broke, Erin writes: For example, did you know you don’t have to be in, or even go to, every wedding?

Telltale Charts

Europe’s economy, perpetually the Jan Brady to the Marcia and Cindy of the U.S. and U.K., is finally getting its moment to shine, writes Marcus Ashworth.

Steady EU Blue

The sharp recovery of the U.S. and U.K. is starting to fade

Best Buy had a pretty good pandemic, but it couldn’t keep up that kind of online sales growth forever, writes Tae Kim. Now it seems to be payback time.

E-Commerce Slowdown

Best Buy’s domestic online sales growth went negative in its latest quarter

Published By : Bloomberg


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