Money creation

[Rakesh Bhandari]

Yesterday Floyd Noriss in NYT and Bartlett today in WSJ show that buying on
margin hardly accounts for much of the market at all (perhaps 9% in the
late 1920s, to less than 2% today?)--the reasons for the bubble must be
sought elsewhere. Evidence is that bubbles tend to encourage margin buying,
rather than visa versa. Fed restrictions may have little effect, and only
force resort to leveraging of other assets to participate in bubble econ.
by the way,  interesting front page WSJ article today, obnoxiously titled
something like US brains vs Japanese brawn,  on US profits from
intellectual property rights. Obviously a more profitable business than
making things, e.g., cars.   Perhaps if this all works out--worldwide legal
standards are forced to conform to US patent and copyright law--US profit
growth can proceed safely ahead of GDP growth, as I suggested in an earlier
post. The upcoming NASDAQ correction could be a lot less steep than we here
are imagining. I am also wondering whether we should factor in a upward or
downward correction of such profits. There is also the question of whether
the activity that goes into development and design is labor, though
primarily mental labor. If not, is the working class disappearing from the
US or at least the key sections of the so called new American economy? In
his Frontiers of Political Economy (Verso, 1991) Guglielmo Carchedi takes
up this question.
yours, rakesh