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imagine a group of ppl feeling rich b/c they own meow-casso paintings. they have a 1M mortgage, 500K credit debt, but 5M in meow-casso paintings however... the paintings have massive volatility causing that portion of their assets to fluctuate 1M to 10M

when the painting price is high, the owner can take out debt and use it like cash using the asset as collateral when the painting price is low however, there is no way to take out more debt since the net worth is now negative this creates a state of No Money/Liquidity

thus the owners of the paintings can agree to mutually collude on price. if the paintings are ONLY sold to each other at high price points, their net worth will remain permanently high and they can enjoy the liquidity from debt

if the narrative is robust enough and maintained over a long enough period it becomes canon. the high volatility is forgotten as demons fade into myth e.g. having a mountain of gold and cash is not particularly useful when watching a nuclear bomb fall into your neighborhood

while the meow-casso paintings work for a small individual of private rich folk who have the leverage to hamfist a narrative into the public consciousness, this mechanism also works for the masses. e.g. the housing bubble of 2008

as long as everyone agrees that everyone else is rich, then everyone IS rich because there's no one to question the numbers the provider of liquidity however has to face reality. it can no longer provide money if the assets it has as collateral go down in value

although groups can collude (via delusion) to lie off of debt backed by assets, the centralized provider of liquidity HAS to diversity its assets if the bank ALSO is deluded and yolos everything into a high vol asset (instead of maintaining a reasonable allocation) then it dies