This week it was made public that Mark Zuckerberg lost 70 million dollars, equivalent to 55% of his fortune, due to his commitment to the metaverse and the reduction of Facebook users, which caused his shares to collapse. With this, he went from being among the three richest men in the world to being in the 20th place on the Bloomberg list of billionaires. This is in addition to the statement by the chairman of the Federal Reserve, Jerome Powell, a few weeks ago, which caused a market crash and reduced the fortune of the richest in the United States by 78 billion dollars, in particular Musk, Jeff Bezos, Bill Gates, Warren Buffet and Segey Brin, when he noted that the US Central Bank will continue to raise interest rates, keeping them high for a while to reduce the effects of inflation.
But did these super-millionaires really lose money? The reality is that no, they simply lost value of their companies, they would only have lost if they had sold at that time. This valuation of companies has caused a crisis before, as in the case of Enron, a Texas energy company that was considered the most innovative in the US for five consecutive years between 1996 and 2001, but due to the payment of bribes, influence peddling and inconsistencies backed up by his audits, his reputation and profits plummeted, causing the biggest business fraud until then, dragging with him several companies that had granted him loans; which led to the financial crisis of 2002, after Enron declared bankruptcy.
This shows us the risk of an economic activity that has no basis in reality, but only in market speculation. That is why it is important to point out that it is not just about economic growth, it is about how the generation of wealth translates into well-being. It is worth saying that Zuckerberg’s alleged losses in this period are equivalent to the combined GDP of Nicaragua, El Salvador and Honduras, or the entire GDP of Belgium, so we live in the risk that reality catches up with us and a financial bubble as it has occurred on other occasions since the tulip crisis, the great recession of 29 and the economic crisis of 2008. However, all these financial crises have something in common: growth based on speculation.
This leads us to think about the importance not only of investing in goods and services with real value and livelihood, but also in a fairer and more equitable distribution of global wealth. While some billionaires can afford to have profits and losses equivalent to the GDP of certain countries, for millions of people these enormous amounts of money could represent their escape from poverty, the satisfaction of their most basic needs and access to better quality of life. XXX Twitter: @LuisH_Fernandez