Re: Mental Models-Bubble Assets As Capacitors.

I begin my Mental Model series with the mad pre-dawn musings I had this am about circuit diagram nightmares I had as an undergrad studying electrical engineering/computer science. Here goes.

I mentioned that there many examples of “Financial Hernias”: “Bubble” assets that have benefited most from low/neg risk-free rates and too much EXCESS LIQUIDITY: Crypto, NFTs, SPACs, high tech stocks/stonks, etc.

The problem with the “Hernia” Mental Model is that Hernias are injuries resulting from excess pressure. In financial markets, the injury comes …