TL;DR
A joke about pennies becoming valuable reveals the dangerous psychology behind market bubbles. Blind faith in scarcity, fueled by FOMO, can lead to financial ruin.
Story
Trump’s joke about the US Treasury stopping penny production and pennies becoming worth a fortune highlights the absurdity of speculative bubbles.
It’s a reductio ad absurdum of market manias, where perceived scarcity drives irrational behavior—like hoarding near-worthless objects hoping they’ll magically appreciate.‣ Reductio ad absurdum: A way of proving something is wrong by showing how its logic leads to an impossible or ridiculous conclusion.
This echoes past bubbles, from Dutch tulips to Beanie Babies. People stockpile, prices inflate, then the bubble bursts, leaving most bag-holders with losses.‣ Bag-holder: Someone stuck with an asset that has lost almost all its value.
The ‘penny’ story is fictional, but the underlying psychology is real. FOMO (fear of missing out) and get-rich-quick dreams cloud judgment. People suspend disbelief, chasing improbable returns until the house of cards collapses.‣ FOMO: Feeling you’ll miss out if you don’t join in.
Remember the 2008 housing crash or the dot-com bust? Overvalued assets, fueled by speculation, crashed back to reality. The ‘penny’ narrative, though absurd, reminds us that markets aren’t always rational. Greed and hype can drive prices far beyond intrinsic value, setting the stage for painful corrections.
The comments from Reddit illustrate these points. Some joke about their ‘penny investments,’ others point out the absurdity. It’s all fun and games until someone loses their life savings chasing a phantom fortune.
Advice
If something sounds too good to be true, it is. Don’t let FOMO and ‘scarcity’ lure you into bad investments. Research before you buy—and if you don’t understand it, don’t invest in it.