C. Rakesh,
My point about the net-present-value of the stock market was in response to your observation that the dividend yields cannot conceivable justify the level of the Dow by many hundreds of orders of magnitude, or whatever it was that you said (I've temporarily lost the post in my new mail system). I'm suggesting that dividend yields are not really a good measure of profitability. All I'm suggesting is that the number you need for profitability is the average profitability out ten or twenty years into the future. How long does it take a dollar invested into the average Dow company to return the present market cap and then to show a profit? You can compare that to treasuries or do what you like. My only point was that dividend yields are not a good number to rest an argument on.
My feeling ( and I haven't worked out the numbers by any means) is that under a 30 P/E (taken broadly and minus Internet stocks) we are still in the land of the conceivably justified, so long as you stretch all the numbers on economic growth and profit growth to their maxima, extend the time period out closer to thirty years and figure interest rates dropping into the 2% region. That is pretty rosy by any stretch of the imagination, but not inconceivable. I also think you have a modern example of the kind of crash you were talking about in the bursting of the Japanese bubble.
As for my alleged Proudhonism, I am unaware of any association with a person of that name. I have absolutely nothing in common with either currency reformers or fascists and I hardly see how my remarks could be interpreted as isolating the banker as the source of all evil when I am lashed from the other side as being a pro-capitalist libertarian. It's not that I want only to attack the problem in the sphere of circulation, it's that I think that sphere is a legitimate and utterly unguarded front of the battle. Marxists are simply losing the battle when it is framed as politics over money. Instead of transforming money/capital most Marxists seem to want to ignore it or gainsay its importance. You can't overthrow an order by simply ignoring it. Likewise, you can't reform the relations of production if you have much less capacity than your opponent at engendering production in the first place. If for every workers cooperative, a hundred capitalist factories are built, a Marxists will have a problem getting her message across.
So, then, I use this list to wonder aloud what character of the money/capital economy will generate the base for the socialist economy. When land was the base of the economy, there wasn't enough money in all the world to buy the holdings of a single king. Now land is just another factor of production falling farther and farther behind the others. I think there is something in the credit relationship that demands our attention. To put it simplistically, once gold was the coin of the realm, able to make and break kings, then it was the backbone of industrial-age money/capital and now gold is a yellow industrial metal also used in jewelry. All that change is due to the rise of credit. Once the very idea of junk bonds was a laughable curiosity, then those bonds gave Wall Street sharpies the ability to topple the largest post-war conglomerates and now junk bonds are a commonplace and reputable brokers deal in mutual funds comprised exclusively of high-yield (nee "junk") bonds. What does this evolution mean to the revolution? I have my suspicions, but mock me and throw me in with currency reformers and fascists if you must, splitter. ;-)
peace