Marx details numerous examples of this hoarding of gold and silver, amongst different cultures. But, as simply hoarded metal, it has no effective value, other than its continued relation to money in circulation. It is only as money in circulation, as the equivalent form of value, that gives the money hoard its own value. Yet, to become a hoard, it must forsake such circulation itself.
“The passion for enrichment by contrast with the urge to acquire particular material wealth, i.e., use-values, such as clothes, jewellery, herds of cattle, etc., becomes possible only when general wealth as such is represented by a specific thing and can thus be retained as a particular commodity. Money therefore appears both as the object and the source of the desire for riches. The underlying reason is in fact that exchange-value as such becomes the goal, and consequently also an expansion of exchange-value. Avarice clings to the hoard and does not allow money to become a medium of circulation, but greed for gold preserves the monetary soul of the hoard and maintains it in constant tension with circulation.” (p 132)
To amass a hoard, money must continually be withdrawn from circulation, following sales, but, for there to be continued sales, there must be continuous purchases, which requires money to be thrown into circulation. As I have set out in my series on how liquidity moves from circulation to assets, and also from assets to circulation, these hoards do not have to be of money itself, but can be hoards of assets, be they physical assets such as land, diamonds, art, wine and so on, or financial assets (fictitious capital). The accumulation of money hoards (and the same is true of many of these assets) is different to the accumulation of other commodities.
“Storing of corn, for example, requires special equipment; collecting sheep makes a person a shepherd; accumulation of slaves and land necessitates relations of domination and servitude, and so on. Unlike the simple act of piling things up, the formation of stocks of particular types of wealth requires special methods and develops special traits in the individual. Or wealth in the shape of commodities may be accumulated as exchange-value, and in this case accumulation becomes a commercial or specifically economic operation. The one concerned in it becomes a corn merchant, a cattle-dealer, and so forth. Gold and silver constitute money not as the result of any activity of the person who accumulates them, but as crystals of the process of circulation which takes place without his assistance. He need do nothing but put them aside, piling one lot upon another, a completely senseless activity, which if applied to any other commodity would result in its devaluation.” (p 133)
The same applies to the assets noted above. Someone who speculates in wine, on the basis of making a capital gain on the rising price of the bottles in their hoard, does not become a wine dealer, and, in fact, the wine is often hoarded for so long that, were it actually opened to be drunk, it would be found to be unpalatable. Its exchange-value derives not from its use-value as wine, but merely from its use value as a speculative asset, whose price is a monopoly price deriving from its scarcity. The same applies to works of art, and other such assets whose supply is fixed, and cannot be increased in response to surplus profits, the monopoly price deriving from speculation, is then a form of rent.
In fact, in economies that have adopted fiat currency, no longer related to any money commodity, it is hoards of these money tokens (savings) that tend to become devalued, as central banks produce more of them, thereby, devaluing them relative to these various assets, whose price correspondingly rises, encouraging such hoarding of assets, as it is these assets which, then, provide a store of value, as against a constantly devaluing hoard of money tokens. As the money tokens are devalued, even money reserves (savings deposits) which attract interest, become devalued, because the rate of interest on the savings is frequently lower than the rate of inflation, and during periods of speculative frenzy, considerably below the rate at which the price of speculative assets rises.
The speculator who hoards bonds, shares and other financial assets, does not become a stock trader, even if they might personally day trade some of this stock. Unlike an actual stock trader who makes money, as a middleman, buying in order to sell, the speculator hoards financial assets, purely in the hope of making large capital gains, as the prices of such assets rise, and, in times when fiat money tokens become devalued as a result of excess liquidity being injected by central banks, these hoards of financial assets become guaranteed sources of such speculative gains. The ruling class, which owns all of its wealth, now, in the form of this fictitious-capital, cannot day trade all of this wealth, so that it becomes the main source of these hoards of assets.
Even with land held speculatively this is true. The landowner who sees the prospect of turning £5,000 an acre agricultural land into £1 million an acre development land, hoards it not to trade it, rent it out, or farm it, but purely on the basis of expecting speculative capital gains from holding on to it. The large building company that holds land banks available for use as building land, similarly holds on to it, even when they don't plan to build on it in the near future, simply in the belief that the price of the land, and of the houses it can build on it later, will continually rise. The owner of properties, in a time of property price bubbles, also does not necessarily rent them out, but sits on them in the expectation of capital gains. Rather than depreciating, these assets appreciate from being hoarded. They depreciate sharply, however, when asset price bubbles burst.
If corn or cloth is stored, it not only requires special facilities to prevent its devaluation via physical depreciation, because, even with such facilities, the mere passage of time results in its depreciation.
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