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OVER AT EQUITABLE GROWTH: TRYING, YET AGAIN, TO COMMUNICATE THE ARITHMETIC SCAFFOLDING OF PIKETTY'S "CAPITAL IN THE TWENTY-FIRST CENTURY": THURSDAY FOCUS: JUNE 5, 2014 by DeLong

Isabella Kaminska on the economic mechanics which bring r back down as g slows.

See this: http://qz.com/215281/dont-believe-brokers-the-government-or-thomas-piketty-your-property-values-wont-grow-faster-than-your-paycheck/

And also my German sunseeker posts. Savers will put up a fuss about yield compression, but eventually if there isn’t $ denominated growth either the cashflows associated with their wealth will dwindle and the mark to market value of their assets will begin to fall with it, or the government or some other agent will have to step in to debase the relative value of those returns in $ terms. It is the process of bringing r down to g which creates capital crises. When g outperforms r, on the other hand, you have the opposite problem, one in which capital is under priced in relative terms.