actually, yes they are. That’s why prudent people put money in an FDIC-insured CD in a bank: they’re not going to get rich off of that, but they have the right to expect a modest but decent return on that investment.
They do have that right. Same with people who invest in mutual funds for the long term.
What you’re talking about is a scenario where the only people that matter are the day traders and the venture capitalists who, in your mind, are the only people who really “create wealth”. And that the rest of society should live, die, rise and fall with them since all the positive externalities they enjoy are supposed to be attributable solely to the risk-takers.
Clue for you: not only do the financial markets not, in fact, work that way (wealth is not, in fact, created solely via high-risk speculation; wealth *bubbles* are created that way), most of society simply will not live that way.
Most humans attempt to minimize risk. If you tell them that in truth, no matter what they do, they have no financial security, so they might as well hop on the high-risk investment train, they’ll tell you to go straight to h*ll. And then they’ll vote for the “stability” of socialism. And I, for one, wouldn’t blame them given those two options.
Bank accounts are risky. They are put options on the value of the assets banks choose to buy. Staid mutual fund holdings are risky. They are parking areas for assets others are dumping. You are taking these risks, as are lots of others, without asking much in the way of upside. Which you are of course free to do. But if you think they are existentially safer, you simply haven't grokked yet that a contract with anyone is only worth as much as the counterparty's actual ability to pay.
"But it is insured by the FDIC". So, what are the FDIC's assets? "But it is backed up by the treasury". So are Fannie and Freddie debts, de facto, which is what you are apparently objecting to. But so what? What are the assets of the treasury? What is its word worth? What's a dollar?
The gulf cooperation council's proven oil reserves, at today's prices, are worth all the stock in the world, with enough left over as spare change to buy all the US agency paper there is.
At tomorrows, who knows. More, less. A risk.
There is no such thing as a riskless asset, because an asset is somebody else's liability. Unless you plan to eat it yourself, biologically speaking, the value of anything you can hold depends on other's demands and through that on others' net worth.