> To begin with, one should start with the
> "real" economy and (for example) find out whether there is productive
> investment ("real" capital) or whether one is borrowing to cover short
> term consumption (usually by the rich). THEN one looks back at the
> monetary economy, not confusing financial capital with some "real"
> physical thing
True enough, though it's also true that financial capital is as real as anything in the total system, and investment into "real things" can itself be utterly speculative.
Another key is ownership -- who *owns* the capital in question, and how it relates to other capital(s). Sweden, Switzerland and Norway all have large pools of state-controlled assets - credit unions, pensions, etc. So the argument that they should invest more sounds suspiciously like a plea for them to turn over their asset management to high-flying Wall Streeters. But maybe I'm just being cynical.
-- DRR