There seems to be a widespread misunderstanding of what "Capital" truly is as the term is used interchangeably with the term "Money" by central bankers, businessmen, and economists. Here are some of Dylan Grice's key points as he discusses this error in the Edelweiss Journal:
This is a fundamental error of thought. Capital is not money. One is scarce, the other is infinite. Capital comes from savings, and the policy of cheap credit (especially in the U.S.) has encouraged spending, not saving. Scarce capital is growing ever scarcer. One day the price of capital will reflect its underlying scarcity, because one day it must. In the meantime we need to think very carefully about the capital requirements of the businesses we own, and grow increasingly wary of those businesses which depend on artificially cheap "financial capital" for their survival.
Sucess in the long run requires that our thoughts and actions be fully indepoendent from the false ideas of the herd.