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To save the banks, you would have to turn the entire Eurozone into Greece.

Michael Hudson

The reason is that every recovery since 1945 has begun with a higher, and higher level of debt. The debt is so high now, that since 2008 we’ve been in what I call, debt deflation.
MICHAEL HUDSON

Debt Deflation Higher Reason
The one sure mark of a con, though, is the promise of free money.
MICHAEL HUDSON

Free Mark Money Promise
If bankers can push the loans and make more profits for the bank, they get paid higher bonuses. They often also get stock options.
MICHAEL HUDSON

Government Guy Running
The problem is indeed that one party’s debt finds its counterpart in some other party’s savings. Not paying debts therefore involves annulling some other party’s financial claims on the debtor.
MICHAEL HUDSON

Annulling Counter Financial Problem
Deflation is a leakage from this circular flow, to pay banks and the real estate, called the FIRE sector – finance, insurance and real estate. These transfer payments leave less and less of the paycheck to be spent on goods and services, so markets shrink.
MICHAEL HUDSON

Estate Fire Pay Real Train
The economy is being run primarily by the banks for their own interest.
MICHAEL HUDSON

Economy Interest Running
Every government, from the Obama administration right through to Angela Merkel, the Eurozone and the IMF, promise to save the banks, not the economy.
MICHAEL HUDSON

Administration Government Promise
You have to abolish pension plans. You have to abolish social spending. You have to raise taxes.
MICHAEL HUDSON

Pension Plans Simple Thinking
You’re having government spending on the economy being cut almost everywhere. That means that the only source of spending for growth has to come from borrowing from the banking system.
MICHAEL HUDSON

Cutting Government Mean
I guess the main thing that came out of the Panama Papers was that Ukrainian President Poroshenko had promised to divest of his chocolate company and instead, he simply moved it into an offshore account.
MICHAEL HUDSON

Chocolate Country Guess People Promised
This means that they’ve gone down especially for Blacks and Hispanics and other blue-collar workers. Their net worth has actually turned negative, and they don’t have enough money to get by.
MICHAEL HUDSON

Blue Collar Enough Mean Money Negative
The essence of the global financial bubble is that savings are diverted to inflate the stock market, bond market and real estate prices rather than to build new factories and employ more labor.
MICHAEL HUDSON

Bond Employ Estate Market More Season
Britain is having a referendum as to whether to withdraw from the European Union, and it looks more and more like it may do so. So the world’s politics are in turmoil.
MICHAEL HUDSON

Look More Union Withdrawn World
The myth is that if housing prices go up, Americans will be richer. What banks – and behind them, the Federal Reserve – really want is for new buyers to be able to borrow enough money to buy the houses from mortgage defaulters, and thus save the banks from suffering from more mortgage defaults.
MICHAEL HUDSON

House Suffering Want
Nobody prefers to earn income any more, because that’s taxable. Rich people prefer to make capital gains.
MICHAEL HUDSON

Gains Income People
Europe is creating the flight of refugees that’s tearing it apart politically, and leading rightwing nationalist parties to gain power to withdraw from the Eurozone.
MICHAEL HUDSON

Country Creating Party People

To save the banks, you would have to turn the entire Eurozone into Greece.

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To save the banks, you would have to turn the entire Eurozone into Greece.

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