Are the present troubles just a crisis of confidence or is there something real going on? "Credit" comes from the Latin word "credo", meaning "I believe", and refers to the trust that has to exist between individuals and companies in order for the economic process to function. And so, to the extent that the economy depends on credit, the collapse in confidence is itself a real economic effect. But there is something more substantial going on as well. For production to take place, three factors must be available and brought together. These are Land, Labour and Capital. The yield to land is called Rent. Essentially, it is the productive advantage of the site or location and appears as an income stream. Analysis of a slump The fundamental value of a piece of land is this income stream. The purchase of land is in principle the purchase of an income stream, the rental value. And if that were all there was to it, land prices would be such that ratio between rent...
POLITICS ∙ ECONOMICS ∙ RELIGION ∙ MUSIC