AMD's New Deal And Why It's Relevant

AMD has a new business plan. Their bright idea is to get out of the actual making of chips and concentrate on the making of chip making related intellectual property. IP is an imaginary class of property, made up by the government, and as long as regulation remains in place, IP looks more attractive to businesses than that dirty old business of actually making stuff.

This is similar to the mortgage fiasco, because it was regulation that encouraged businesses to take the mortgage business in the direction it did. Banks used to do mortgages on an individual basis, with the borrower putting 20% down and a lot depending on whether the loan officer thought the person seemed trustworthy. Then, with politicians pushing for more homeowner ship, no money down and the impersonal credit score became the norm. But this generates risk, and rather illiquid assets. Thus mortgaged backed securities were born.

And, of course, the granddaddy of the whole shell game is fiat money. A dollar, originally was 1/20th of an ounce of gold. Now it's backed by nothing but 'faith' in the government. Are ya feeling the faith? How about the Icelanders? Any 'faith' in their currency? Of course not.

AMD may do very well for itself, but only as long as government and a bevy of lawyers help it take from anyone who even appears to infringe on their IP. They can make a lot of money at that game. But the second the game changes they'll tank. Other companies are in the game too and perhaps they have better lawyers. There's a massive amount of waste going around that we hardly see because in certain industries you practically have to sue someone just to see if you'll be allowed to sell your product. RealNetworks lawsuit against the Hollywood studios-for example, made all the sillier because there's software out there that's much worse for the studios out there for free on the internet.

What I'm trying to point out is that this stuff is related. It's the same mentality.
There's a difference between creating real wealth and creating an illusion of wealth, and we need to learn the difference.