Bubbles and Rapacious Behavior
Yesterday, I posted some material about the rapacious nature of finance capital. My own understanding of the economy is that profits from new physical investments are relatively low except for industries that enjoy protection from competition, such as a monopolistic structure or intellectual property rights.
At the same time, class power is holding down wages creating massive profits for the very rich, who are looking a high rate of return. At the same time, unsophisticated investors from abroad are also contributing to the rapacious investments, such as subprime housing loans.
This economic configuration pours money into hedge funds, which reinforce the existing situation by squeezing corporations, as I described yesterday, and by holding down wages, which restricts the profitability of potential real investments.
I cannot be certain but this kind of bubble may prove more intractable than a typical stock market crash.