Overaccumulation and crisis

[bricolage]

I just watched these videos; http://kapitalism101.wordpress.com/crisis-overaccumulation/
but I'm a bit confused.

He says that as the economy functions well when money is turned into commodities to be sold for more money but the problem arises when this can't be done and there aren't enough profitable areas to invest the capital. This is overaccumulation and can only be solved by devaluation or a 'purging' of the system; 'sell off excess commodities at discounts, to close factories, fire workers, write down assets, foreclose on mortgages, etc'.

What I'm confused about is when we reach crises like this the image that more often comes out is that there is not enough capital, so businesses wil appear to have less money so can't afford to page workers, mortgages etc. At the moment this is what most world leaders are saying about public sector workers and while of course they could theoretically afford to pay them the dynamics of capital do appear to indicate they don't have as much money as before. Is this just clever propaganda on their part or something more?

The other thing is he says the *only* solution is devaluation but I'm still unsure a) why devaluation solves this and b) why there are no other solutions.

[S.Artesian]

I just watched these videos; http://kapitalism101.wordpress.com/crisis-overaccumulation/
but I'm a bit confused.

He says that as the economy functions well when money is turned into commodities to be sold for more money but the problem arises when this can't be done and there aren't enough profitable areas to invest the capital. This is overaccumulation and can only be solved by devaluation or a 'purging' of the system; 'sell off excess commodities at discounts, to close factories, fire workers, write down assets, foreclose on mortgages, etc'.

What I'm confused about is when we reach crises like this the image that more often comes out is that there is not enough capital, so businesses wil appear to have less money so can't afford to page workers, mortgages etc. At the moment this is what most world leaders are saying about public sector workers and while of course they could theoretically afford to pay them the dynamics of capital do appear to indicate they don't have as much money as before. Is this just clever propaganda on their part or something more?

The other thing is he says the *only* solution is devaluation but I'm still unsure a) why devaluation solves this and b) why there are no other solutions.

The issue is not the amount of money on hand, nor even the amount available through credit from banks, financial firms, investment companies, etc., but rather the rate of return, the rate and mass of expansion of existing and future production.

Right now US manufacturing corporations have the most cash and cash-type assets on hand ever. However, with the previous expansion of capital investment in 2005-2006-2007 and 2008, the rate of return, the rate of accumulating profits has declined from its peak in 2006. The massive layoffs in 2008-2009, the sequestering of productive assets-- at one point 1/3 of the US railcar fleet was in storage, 14% of commercial jet airliners were parked in deserts, 10% of container shipping was laying at anchor outside maritime terminals, are all part of the attempt to offset that decline and restore an improved rate of profitability.

The lack of money is never the issue, the earnings that can be generated from that money is always the issue.

Hope that helps.