With the major upheavals in the financial world, it may be beneficial to look at the difference between investing and speculating.

When I give a business $100 for improving/extending its business, in the hope of eventually receiving a reasonable dividend, I am an investor.

When I try to sell that $100 share for $150, I am a speculator.

The $100 has an intrinsic value in that it purchased machinery, services, skills or resources, to create wealth.

The additional $50 I try to get has no real value, it produces nothing. It is a measure of my greed. It is fluff, yet we all ignore that when we suffer major losses of fluff.

The housing market bust reveals the same problem, with greedy agents overvaluing the houses they finance, and the means the mortgagees have to pay the loan, and the mortgagees in deep denial that the house they have committed to is way overpriced and above their income level, in the hope that it will retain this inflated value.

The true value of a house is only the market price of the material and labor; the rest is fluff.

There are plenty of gray areas where the boundaries between a reasonable return and greed are indistinct, but as a nation, and in many other parts of the world, people have learned to live in an illusion, where much of the numbers representing wealth simply represent nothing of intrinsic value.

Is it any wonder that fluff eventually blows away?

Peter van Oosten, Greene