Today's unusual entry is, “fictitious capital.” Breaking it down, “capital” is money, and “fictitious” is like fiction, which means not real, as in a “fictional character,” no such person exists. Captain Ahab only exists in the story of Moby-Dick. So you'd think that spending fictitious capital would be impossible, but you'd be wrong. Our rich brethren spend fictitious capital every day. They also borrow against it, although it is, as the clear meaning of the words implies, not real. That's what makes it strange.
Do not attempt to spend some of it yourself. It only works for people who are already rich.
I discovered the phrase today in a Salon article about the failure of centrism in post-fiat money American politics. That's a deeper time-line than they were using; they only went back thirty years or so. But figuring post-Nixon is a better way to go. Post-silver-standard. Modern money has no intrinsic value, nor does any object or commodity. Things, and money, are worth whatever people will pay for them. That's why concert tickets cost hundreds of dollars now. It's mischief.
Fiat money is a vast generator of fictitious capital.
The phrase itself was coined by Karl Marx. Mr. Marx was talking about interest mostly, and also stocks and commodities. Interest is the cost of borrowing money, and it creates money out of thin air. Stocks, to be fair, were until recently rationally related to the value of the physical plant of the company and the accounts receivable, etc. Now the sky is the limit for stocks. Thin air is putting it mildly. Many companies exist for years on borrowed money, never make a nickel in profit, then go public and sell a billion dollars worth of stock. Now that, my friends, is thin air. That is FICTITIOUS CAPITAL!
Wall Street, not the place but the state of mind, has gone completely off the rails with this concept of making money out of thin air. They have proved over and over again how much they really need regulation. They are like a demented child playing with fire in the basement of a tenement. When things go wrong, they can go very, very wrong. Like in 2007! If you haven't seen the movie, “The Big Short,” you should look for it. It's on Netflix. Don't tell me that you don't have Netflix! The movie lays it all out very nicely. You can learn about those collateralized debt obligations, and all of their spin-offs, that almost destroyed the world's economy. They managed that because of CENTRIST DEREGULATION WHILE A DEMOCRAT WAS IN THE WHITE HOUSE. That would be Bill Clinton in the 1990s. Let's work together! It'll be great! What can we agree on? How about massive deregulation of the banking business, and let's shit-can social welfare programs while we're at it. All in the spirit of cooperation! It'll be centrist! Mischief, mischief, mischief.
Didn't work for Clinton; didn't work for Obama; not going to work for Biden.
It is, I suppose, mild consolation that most of the trillions of dollars now held by our tens of millions of billionaires is made up of fictitious capital. Facebook stock goes down five percent, and the holders lose a total of several billion dollars that day. It's cool, though, because the money never existed in the first place, although it seems to spend just fine on yachts, aircraft, ranches in Wyoming, and fine art. Not consoling at all is the fact that when their bank accounts go poof, leaving only a blue mist, our little bank accounts will also go poof.
The main problem, of course, is that you, dear reader, must pay your rent with real dollars. Donald Trump, the master of fictitious capital, could be a billion dollars underwater for all we know. He has assets, certainly, but he also has massive debts. He'll be fine though, because only the non-rich need to worry about such things. You'll get your ass kicked out into the street, but Donald will be in his golden monument to bad taste, shitting on a gold toilet, having a net worth of negative millions of dollars. Your net worth is higher than his, but you are shit out of luck, pal, because you're a taker, not a maker. We have rules in this country.
Isn't vocabulary fun?
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