right. I was emphasizing the difference between purely financial wealth and pure means
of production. Obviously, the fact that the latter have a price -- which is determined
by speculation among other things (at least in the short run) -- means that the
distinction is fuzzy. But it's there. You can't eat bonds or shares -- or use them to
produce things.
Jim Devine [EMAIL PROTECTED] http://myweb.lmu.edu/jdevine
________________________________
From: PEN-L list on behalf of Eugene Coyle
Sent: Sat 10/30/2004 11:49 AM
To: [EMAIL PROTECTED]
Subject: Re: [PEN-L] Definition of Economic bubble
Jim Devine,
What is "the actual wealth"? I. e. what is the dollar value of what
you a mentioning? Pretty ambiguous, no?
Charles Brown wrote:
>Re: Definition of Economic bubble
>
>
>
>in a bubble, the paper claims on wealth (stocks) never corresponded to --
>and in fact exceeded the value of -- the actual wealth (factories,
>machinery, patents, etc.) It's the paper claims that get devalued when a
>bubble pops. The actual wealth doesn't disappear as part of the bubble
>popping, though they may be scrapped -- or may lose market value -- if the
>financial crisis leads to or triggers a real economic crisis.
>
>Jim Devine
>
>^^^^^^
>CB: I believe that at any one time, a very significant proportion of the
>total wealth of the world is in the form of paper that does not correspond
>to the actual wealth. I keep trying to think of what impact that has in
>terms of the economic power of those who hold the highest proportions and
>largest blocks of the paper wealth.
>
>
>
