Friday, October 24, 2008

The Dollar is Strong But Ephemeral, More Conceptual Than Real

The means of production is an all encompassing concept. It includes the crops and cattle in the fields, the mineral wealth in the ground, power plants with their whining turbines, factories and workshops around the World, the transportation systems and sales outlets that distribute goods. The American dollar is the life blood that nourishes and enables the means of production to supply the World with the necessities of life. There are other currencies but only the dollar is universally accepted and available in the quantities necessary for the transfer of value required for the maintenance of the World production/consumption cycle.

The means of production is rapidly contracting now. Much more money is owed than available for purposes of consumption. Money is being drained from circulation and held by the investor class, World wide, to pay debt and as a store of wealth, rather than being used as an instrument of trade, because continued production is not profitable. You can't just give stuff away, production costs must be covered. The rich aren't any happier about this than anyone else. The fact is that the value of money constantly degrades. Its value is inextricably tied to the vitality of the means of production. Holding large amounts of it, for long periods of time, is a fools game. Those with real wealth just don't know what else to do, so they keep gathering up what money they can.

Nobody knows what to do. Watch the markets today. Watch the value of the means of production contract. Watch the money being drained from the system as it grinds to a halt. Everything is part of a cycle. Death is always a necessary part of any cycle. It's the least fun part.

I'm not dead yet. I have a little money. That's a good thing. At least for me. At least for now.

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