Money Capital. Interest. Role of the Central Bank. 4 21 2025
“Shortly after markets opened, Trump referred to Powell as a “major loser” on Truth Social and said the U.S. economy could slow without an immediate reduction in the cost of money amid the fallout from his trade war.”
Washington Post 4 21 2025
Note the “cost of money” This refers to money capital that is paid interest for its part in the production of commodities. The money is first loaned to, for example, an industrial capitalist, who uses the money to produce a commodity, then sells it, and repays the loan, with interest.
The interest is comes from the part of the surplus value created by the industrial capitalist, he calculates ahead of time that he is going to have to pay the money capitalist interest. The cost of the money capital is referred to as the price of money. It is the amount of surplus value that money as a commodity produces when loaned out.
Trump is making the price of money to be lower; Federal Reserve Chair Jerome H. Powell is in charge of this. Apparently there is a separation of powers agreement that Trump cannot just order interest rates to go down, instead we have Powell sort of independent to make these conclusions.
It may make the price of money lower, but it also must interfere with the average rate of profit. The interest rate is a tangible condition, and it is speculated on by money capitalists. Where the money capitalist keeps his money that he expects interest to accumulate on, would seem to have to sort of compete with industrial capital. If there was more than the average rate of profit to be made on money capital as opposed to industrial capital, people would invest their money in money capital instead of industrial capital.
But without industrial capital, there can be no money capital. There is no goose that lays golden eggs. The Alchemists of the Middle Ages thought all they had to do was figure out how to make gold and they could have anything they wanted. They failed to see the process by which productive labour created commodities. The money capitalists can get so caught up in speculation they forget industrial capital is where money capital comes from. The result is a bubble, where speculation runs rampant, often on high risk investments, backed by nothing more than paper.
It would seem the bubble is starting to break now, and Trump’s capitalists want the price of money to be cheaper. If it is cheaper to get a loan, you can invest the money and bring in more profit by speculating on money capital.
The irrational form of money as a commodity, which can be bought or sold for a price, would explain why in the previous article I noted the stock market feels they are trading commodities. The commodity money is bought and sold at the exchange, thus they trade commodities.
The exchange of commodities is not where this surplus value is created. All wealth is the product of human labor, whether or not it is paid for,. All this exchanging is a cost of production, money capital is originally a product of productive labour, the surplus value this labour has created is where money capital is derived.
Thus the foolishness of suggesting exchange of a commodity produces wealth. The merchant may make trading commodities run more smoothly for the industrial capitalist, but his wealth is from production. Exchange, even if he does make out like a bandit sometimes, the money he makes is a cost of production for the capitalist, the money comes out of industrial capital’s profit.
The accumulation of money capital has reached absurd amounts, the state’s debt alone is 32 trillion dollars. In this case it is not even speculation on a material commodity, there is no commodity or production of a commodity speculated on several years down the road. This practice, paid for by bonds, is also connected to the interest rate. The federal reserve uses its money it gets paid the interest rate for, the price of money, to loan out to money capitalists, who loan it to industrial capitalists, to produce commodities.
Calculation of interest on his profit is where money capital is formed. It has a sort of legal agreement, the money loaned has to be paid back with interest, regardless of if the capitalist made a profit producing commodities. There is a legal relationship between the leader and burrower, to pay a certain interest rate on the loan regardless of if it was used productively.
The price of money is real, and Trump knows what it means. He may not have had experience running a factory, but as a luxury real estate person, he knows what lowering the interest rate will do. It makes it easier to loan out money capital. Speculation on in the process by those in between the industrial capital and the money capital runs rampant.
Nicholas Jay Boyes
Milwaukee Wisconsin
American Democratic Republic
edit 9 17 2025
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