I am a nominal man...

[jtuck004]

This is a great short essay, make some great points. Wish I could write like that.

More at The Automatic Earth, link below...

Dan Weintraub: The Nominal Man

I am a nominal man living in a real world. Yesterday, I spent $16 on a bag of whole-grain rice, a bag of beans and a hunk of cheese.

One goal of the Federal Reserve’s quantitative easing policies is debasement of the dollar. It is often argued that a weak dollar – relative to other currencies – promotes our supposed export-based economy. Lest we forget, however, our $14-trillion-plus economy is 70-percent consumer-dependent. The most productive capital in the U.S. was shipped overseas long ago. Economic growth over the past three decades has been predicated not on the creation of productive capital, but on access to cheap credit, and thus on consumer spending. The United States, despite beliefs to the contrary, is no longer an export-driven economy. And I remain a nominal man living in a real world.

While the world operates on numbers, I subsist on the relative value of those numbers. For several months now, commodity prices have been rising – and not just those of precious metals. The price of wheat, of cotton, of coffee, of cocoa: all rising sharply. But why would the price of commodities rise when a contracting global economy should equate to a decrease in overall demand (and thus to falling prices)? Commodity prices are rising because investors increasingly believe that the relative value of their financial assets is no longer assured. In a global financial system rife with fraud, in a system teetering precariously close to the brink of an all-out currency conflagration, investors and speculators are abandoning financial assets in lieu of commodities because these same investors believe that the world’s central banks are bent upon destroying the purchasing power of their money. And still I remain a nominal man living in a real world.
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Read the rest here...