So it’s important to watch him very closely
by Adam Taggart
Chris Martenson’s Peak Prosperity
Q: How much is my house worth?
A: Whatever the highest bidder is willing to pay for it.
Those of you who took an introductory Economics class in high school or college may remember learning that prices are set “at the margin”. That’s a fancy way to say that prices are set by the person (or people) willing to pay the most.
This person willing to pay top dollar is called the “marginal buyer”. Most of us don’t really think about him much, but he (or she) is very, very important.
Why? Because the marginal buyer not only determines price levels, but also their stability and degree of volatility. The behavior of the marginal buyer, as well as the degree of competition for his/her “top dog” spot, sets the prices of nearly every asset class held by today’s investors.