Article “The Velocity of Money… and Revolution" by David
Brin has made some very good observations about money.
On what is Velocity of Money?
“You may be asking, what exactly is the velocity of money?
Essentially, it’s the frequency with which the same dollar changes hands
because the holders of the dollar use it to buy something. Higher velocity
means more economic activity, which usually means higher growth. So it is
somewhat disturbing to see velocity now at its lowest point since 1949, and at
levels associated with the Great Depression.”
Money during feudal period
“We have known - ever since Adam Smith gazed across the last
4000 years - that a feudal oligarchy does not invest in productive
capacity. Nor does it spend much on goods or services that have
large multiplier effects (that give middle class wage earners a chance to keep
money moving). Instead, aristocrats have always tended to put their
extra wealth into rentier (or passive rent-seeking) property, or else
parasitic-crony-vampiric cheating through abuse of state power.”
The best on Corporate debt back then and today
“Um…. Duh? Once upon a time, the purpose of corporate debt
was to gather capital to invest in new productive capacity (factories, stores,
infrastructure and worker training), with an aim to sell more/better goods and
services that would then produce healthy margins that pay off the debt, across
a reasonable ROI (Return on Investment) horizon.
This would then actually decrease the net ratio of
debt to company value, across a sapient period of a decade or
so. This approach still holds, in a few tech industries, but not wherever
companies have been taken over by an MBA-CEO caste devoted to Milton Friedman’s
devastating cult of the quarterly stock-price statement.
Today, companies borrow in order to finance stock buybacks,
market-cornering mergers and other tricks that our ancestors (again, in the
Greatest Generation or “GGs”) wisely outlawed. Tricks that GOP deregulatory
"reforms" restored to the armory of cheaters. Tricks that enable the
CEO caste to inflate stock prices and meet their golden incentive parachutes,
with the added plum of pumping rewards for their Wall Street pals who arrange
the debt.”
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