paul, thanks for this. I just have one comment, on the phrase >an investment risk factor through rising inflation<.
Rising inflation poses problems for banking or financial capitalists, who may find that the real purchasing power of the interest and principal payments they receive fall (in the inflation is a surprise and thus not incorporated into loan agreements and thus nominal interest rates). On the other hand, rising inflation can help the industrial capitalists, who tie up borrowed money in real assets (which do not lose real purchasing power due to inflation) and then pay interest and principal in money that's has a lower real cost to reap. During the inflationary 1970s, real business fixed investment rose as a percentage of GDP. The real risk for the industrial capitalists is the possibility of an anti-inflation war (cf. Volcker, 1979-83) which can hurt their profits.To some extent the conflict between the anti-inflation "hawks" (Volcker) and the anti-inflation "doves" (e.g., William Miller, who preceded him as the Fed Head) that reflects the division between banking/financial capitalists and industrial capitalists. (Lefties usually ignore that intra-class conflict, focusing instead on the inter-class conflict.) -- Jim Devine / "In science one tries to tell people, in such a way as to be understood by everyone, something that no one ever knew before. But in poetry, it's the exact opposite." -- Paul Dirac _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
