It causes an allocation of more capital into non-productive assets such as gold, collectibles, land, etc.
As the economy grows, so does the value of the productive assets in it.
Buffett goes on to make the obvious point that investors in those productive assets gain income from them.
So not surprisingly the franchise desires excellent players who are productive assets in search of wins and hopefully profitability.
FORBES: Is The NFL Going To Test Players For Genetic Defects?
Private investors will not commit capital to productive assets when the value of those assets is losing ground to inflation.
These wealthy Romans acquired huge tracts of land at bargain prices, becoming the owners of northwestern Europe's most productive assets.
Berkshire will contiue to hunt for acquisitions similar to that of a Lubrizol, which Buffett and Munger described as a company with dynamic operations that owned productive assets.
FORBES: Buffett: I Should Have Asked Sokol More Questions about His Purchase Of Lubrizol Shares
On top of putting the entire financial system at risk, the hidden cost has been hundreds of billions of dollars funneled into the housing market instead of more productive assets.
Their basic point is that the current massive increase in debt has not been used to finance productive assets, and is therefore having the opposite affect of what the government intends.
Investors in gold might get a store of value (although that rather depends upon when you buy and sell) but investors in productive assets are gaining rents, incomes, dividends over the years.
That is yet another reason for politicians to get their various acts together: doing so will encourage savers to remove their cash from under their mattresses and put it into productive assets.
The vast tax subsidies for housing encourage over-investment in property rather than other, more productive, assets.
None can say much about where the cost of breakfast goods, gold or productive business assets might go from here.
FORBES: Dow Not At New Highs Priced In Gold Or Cost Of Breakfast
In truth, the dollar debasement that made housing nominally more attractive served to harm the economy as capital flowed into the unproductive assets of the ground instead of the productive, intellectual assets of the mind.
This can't be ignored: History tells us that in periods of dollar weakness money tends to flow away from the innovative economy and into non-productive, hard assets.
No doubt there is one, but this isn't due to money being too expensive as much as it's the result of capital flowing to non-productive, hard assets that tend to perform best when money is losing value.
And so I think they're also thinking, well, hold on, how do we, going forward, make our assets more productive?
If the corporate income tax is not repealed, the tax burden would be increased for many of the owners of businesses that pay corporate income tax, which would take assets from productive use in the business.
But the traditional argument against that tax credit is that it is costly to the U.S. treasury and that it creates economic inefficiencies, forcing capital into assets that are less productive.
FORBES: Wind Energy: Twisting and Turning and Getting Bent out of Shape
Productive jobs exist because of nonresidential assets.
FORBES: Obama Beat A Mitt Romney Seemingly Desperate To Lose
Moreover, they argue that taxing capital gains at higher rates would be counter-productive because people would just stop selling assets with gains and Treasury revenues would fall.
Executives at the majors argue that selling declining assets frees scarce managers to concentrate on the biggest and most productive projects, which will make the most difference to the company's fortunes.
The net result is that money is piling up in ultrasafe assets like Treasury bills, without being invested in ways that would build a more productive economy.
WSJ: Hal Varian: Boost Private Investment to Boost the Economy
As De Soto has said, one of the biggest political challenges facing developing countries is to bring the assets of the extralegal sector into a more inclusive legal property system in which they can become more productive and generate capital for their owners.
应用推荐