Grounds for fear of abuse of fiat money--inflating away small pensioners, inflationary attack on the real wage, geopolitical tension as a result of competitive devaluation. What Michael Ballard was saying, I think. ********************* I was thinking of all those workers with their retirement savings in mutual stock and bond funds via 401Ks and 403bs and how those funds would be deflated via the market corrections which take out "fictious capital":
Karl Marx wrote: It follows from the above, that the commodity-capital largely loses its capacity of representing potential money-capital during a crisis, and during periods of business depression in general. The same is true of fictitious capital, interest-bearing papers, so far as they circulate in the stock exchanges as money-capital. Their price falls with a rise of interest. It falls furthermore through a general lack of credit, which compels their owner to throw them in masses on the market, in order to secure money. It falls, finally, in the case of stocks, partly in consequence of the spurious character of the enterprises which they represent, partly in consequence of a decrease of the revenues, for which they constitute drafts. The fictitious capital is enormously reduced in times of crisis, and with it the power of its owners to loan money on it in the market. However, the reduction of the money denomination of these securities in the stock exchange quotations has nothing to do with the actual capital which they represent, but very much indeed with the solvency of their owners. Marx, CAPITAL http://www.econlib.org/library/YPDBooks/Marx/mrxCpC30.html
I was also thinking of how the Fed's issuing of money by fiat to buy the paper IOW: "which compels their owner to throw them in masses on the market, in order to secure money..." can lead to inflationary pressure which eventually work themselves out in cheapening dollar assets held by workers who have their retirement savings locked into these mutual funds i.e. stocks and bonds.
Mike B)
Between these two classes a struggle must go on until the workers of the world organize as a class, take possession of the means of production, abolish the wage system, and live in harmony with the Earth.
http://www.iww.org/culture/official/preamble.shtml
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