There is talk in Japan of hiking up interest rates to flush out the
apparently tremendously inefficinet companies that are considered a
principal source of the recessionary conditions there.

Increasing interest rates is a way of restricting credit. Consequently money
grows correspondingly scarcer. As a result of these developments the economy
will experience even further contraction and many business may go to the
wall. This will tend to create the conditions necessary for a restoration of
profitability to levels that will provide the conditions for economic

But despite the popularity today of cynically berating Marx's Kapital any
such move to hike up interest rates leads to a contraction of credit and
increasing inaccessibility of money even if it happens in a regulated
manner. This is just how Marx described the course of the cyclical crisis.
As the economy nose dives towards depression the availability of credit drys
up and money becomes less accessible. In the case of Japan this same process
takes a extended and regulated form. However eventually the state, despite
its strength, is forced to observe the law of value and jack up interest

At the end of the day the law of value shines through.

Comradely regards

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