Comments on: QE, the euro and the monetary option http://thenextrecession.wordpress.com/2012/08/04/qe-the-euro-and-the-monetary-option/ blogging from a marxist economist Fri, 24 May 2013 22:41:16 +0000 hourly 1 http://wordpress.com/ By: Mike Ballard http://thenextrecession.wordpress.com/2012/08/04/qe-the-euro-and-the-monetary-option/#comment-7917 Sun, 12 Aug 2012 08:29:09 +0000 http://thenextrecession.wordpress.com/?p=4604#comment-7917 The fools who rule give money to the finance capitalists who use it, when they use it, to buy sovereign debt in places like Australia. They starve the market for funds to purchase commodities which workers could make, if employed. As Roberts writes, “The large US and UK corporations are flush with cash (see The UK’s weak recovery and profitability, 1 May 2012). Banks are not lending to them as they do not need to borrow. Ironically, in contrast, banks are not lending to households and small businesses because they don’t have any cash!” Workers make up a very large part of the market and real wages haven’t grown above their 1964 level. Hey, and the fact that the USD’s value has been cut in half since the baby boomers started to retire puts another big crimp in sales and sales are definitely related to the rate of profit.

]]> By: Daniel de França http://thenextrecession.wordpress.com/2012/08/04/qe-the-euro-and-the-monetary-option/#comment-7587 Sun, 05 Aug 2012 01:43:45 +0000 http://thenextrecession.wordpress.com/?p=4604#comment-7587 Michael,

You have shown the correlation between the stock market and the rate of profit. But, it seems you point out an exception, a very important one, because it is in a time o crisis.

“So this influx of credit may keep financial asset prices (stocks and bonds) up, but for the productive economy, it is just ‘pushing on a string’. That’s because money supply is demand-led and artificially pumping in more credit into the banks and the stock market has little or no impact on the productive sectors of the economy.”

Maybe there should be another correction term to improve the correlation?

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