At 28/10/01 17:10 -0800, you wrote: >Puzzle in Japan: Despite Lowering Rates > To Rock-Bottom, Banks Lack Borrowers > > By PHRED DVORAK > Staff Reporter of THE WALL STREET JOURNAL >October 25, 2001 > > HIROSHIMA, Japan -- Why does Japan's economy, despite > phenomenally low interest rates, keep wasting away?
Fascinating And Greenspan has lost his economic greenfingers too, however much the sluggish economy is watered with cheaper credit. But marxists ought to face up to a problem. Marx predicted the reverse. "On the ever of the crisis, the bourgeoisie, with the self-sufficiency that springs from intoxicating prosperity, declares money to be a vain imagination. Commodities alone are money. But now the cry is everywhere: money alone is a commodity! As the hart pants after fresh water, so pants his soul after money, the only wealth." Capital Vol 1 I suggest the answer is this. What we are seeing is the effect of essentially Keynesian interventions by the national banks to ensure there is at least not a crisis of circulation of finance, even though ailing companies like Swissair still cannot get additional credit in view of its teetering insolvency despite negligible interest rates. If anything, these liquidity traps illustrate, rather than disprove, the fundamental contradictions in the capitalist economic cycles: the contradiction between the limited purchasing power of the masses, and the need for capital ever to increase its accumulation while also increasing its profit. What is finite is not credit, which can be printed, but the real exchange value in the economy, which cannot. But of course only marxists believe that exists. Chris Burford London
