This article is based on data for the US only provided by the BEA.

Please note, this article confines itself to that element of Tier 2 fictitious capital involved in pure speculation. There is no intention to discuss the element of hedging risk, which seeks to reduce volatility rather than promote it as in the case of pure speculation.


  1. Anti-Capital says:

    First things first: Check your math: Table 1 should be in billions of dollars, not millions. I’ll deal with the rest in a separate article.

  2. Thomas Weiß says:

    This time I was able to reproduce your “assumed turnover rate” on the basis of private goods producing industries from your KLEMS table, release October 2020.

  3. Thomas Weiß says:

    Another thing: In the “Table S.5.a Nonfinancial Corporate Business” the item “equity and investment fund shares” appears (with different values) on the asset side and on the liability side, which results in negative net wealth in some years, well, if the value of equity outstanding is large during equity booms. On Fred Graph however net wealth is always positive and rising. I got (nearly) the numbers of Fred Graph, when I omitted equity on the liabilities side.

  4. Anti-Capital says:

    Shareholders’ equity is not a liability. Nothing is “due” the shareholders who own shares of the company. The quantity that is attributed to shareholders’ equity is the value of all the assets of the company minus its liabilities. Thus shareholders’ equity + liabilities equals the total value of the company, and the balance sheet balances; like a tautology “balances.”

    If the company fails, and cannot meet its liabilities, shareholders have no claim on assets since they are the owners and the obligation falls on the company to meet its liabilities through, if necessary, total liquidation.

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