If you put a ten dollar bill under the rug instead of spending it, that is capital formation. It represents ten dollars' worth of something that might have been immediately consumed, but wasn't.
Sentiment: NEGATIVE
Capital isn't this pile of money sitting somewhere; it's an accounting construct.
A dollar saved is a quarter earned.
A huge dollar bill is the most accurate way to teach children the real motto of the United States: In the Almighty Dollar We Trust... Until the average American realizes that capitalism damages her livelihood while augmenting the livelihoods of the wealthy, the Almighty Dollar will continue to rule. It certainly is not ruling in our favor.
I remember being in the Ontario Legislature and the Liberals yelling over at me about the fact that the dollar was rising, and that was bad for business, and didn't I realize that. And I thought, 'What are you talking about?' The value of the currency in part, large part, reflects the world's view of the state of our economy.
At some point, the dollar has to give. You can't just keep printing money, and monetizing debt, and buying bonds, without the dollar imploding.
Every dollar that is printed should not represent a debt to private bankers. It should represent an investment potential in the common good, in the common needs of our country.
I never viewed money as being 'my money' I always saw it as 'the money.' It's a resource. If it pools up around me then it needs to be flushed back out into the system.
U.S. capital formation, which has been pretty high in the '90s and very high in the late 1990s, is what is being financed by the savings of the rest of the world, generally poorer than ourselves, because our deficit on current account, chronic deficit, is their surplus, and they have been willingly bringing that to the American market.
If you throw money around like confetti, it just becomes shallow and meaningless.
The value of a dollar is social, as it is created by society.