"That headline makes quite a
statement. But it’s
true. The stock of so-called “financial capital,” or wealth — all the financial
assets out there, which are ultimately claims on real capital — represents only the
most tenuous long-term approximation of what our real capital is worth.
Certainly
true: the stock (total dollar value) of “financial capital” goes up (in fits,
starts, and reverses) over the decades as real capital is accumulated. But
beyond that rough, big-picture relationship, the total value of financial
assets tells us very little about the total value of real assets.
Why?"
