Re: [Pen-l] What is the Crisis About? Fictitious Capital or the Destruction of Wealth?

[Shane Mage <shmage@xxxxxxxxxxxx>]

On Mar 12, 2009, at 12:16 PM, Jim Devine wrote:

Shane:

What difference is there between the "actual [monetary] value of real

assets" and the reproduction cost of those assets?

me:

the actual value would reflect the possible _benefits_ to their owners

from the use of the assets.

Shane, now.

But isn't "market valuation" the only conceivable measure of the "actual

value" of a capital asset, whose only benefit to its owner is the "possible"

income stream accruing from it?

We could hire an expert to evaluate future benefits. We may value the
opinion of that expert more than we value the fad- and bubble-prone
stock market.

But isn't the "fad- and bubble-prone stock market" the empirical *consensus* of the various "fad- and bubble-prone" "experts in guessing returns years into the future" who make up the stock market?

While reproduction-cost is a definite, meaningful economic reality?

Shane Mage

This cosmos did none of gods or men make, but it

always was and is and shall be: an everlasting fire,

kindling in measures and going out in measures."

Herakleitos of Ephesos

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