(Published in Strategy Journal February 15, 2008)
Economists are worried and so businessmen, is breathing instability incomprehensible to the people-the world of finance. And if you wanted to give the impression that we have learned from the financial crisis, such as the famous 29 crisis, the problem is always the same: a fictitious transactions inorganic expansion of capital. Among other things, this is serious as an important part of the pension funds are deposited in financial roles of varying type and name (stocks, options, swaps), which have no counterpart in the real world, ie, more "financial wealth" that natural wealth and material goods such as forests or marine biomass.
extraction of natural wealth and the systematic diversion of surplus actual production to the financial world, it enables the magic of the huge increase in financial wealth, which has grown much faster than real income countries, reaching five times the value of global real economic output. But if all the owners of this wealth has now want to make it effective in material goods, would not have enough cars or lettuce to make it real. This fantasy is made possible by: the growing concentration of wealth that grows the capital who can go to the bag to further capitalize on its wealth and this can push up values, access to easy credit that allowed many financial operators go to the bank the bag to make speculative gains, borrowing short-term rates below the cost of the bag, the development of the AFP that capture a wealth available to fetch returns in the stock.
The problem is that this gap between reality and fiction, at some point begin to express themselves and how complicated is that it affects the economy of the flesh. First, the fictitious price of financial paper is an incentive to reallocate investment from the real to the financial and, secondly, future pensions are destroyed by the falling value of financial capital they have invested, in addition, States reallocate funds to support exchanges and investors become risk averse, slowing investment and hiring. Sadly, those who suffer the consequences of speculative booms, are also the same ones that have periods of depression. Marcel
claude, Economist.
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