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In fact, there’s no way that banks can be paid everything that they’re owed.

Michael Hudson

Then, all of a sudden, the Fed can raise interest rates, let the stock market prices collapse and the people will lose even more in the stock market than they would have by the negative interest rates in the bank. So it’s a pro-Wall Street financial engineering gimmick.
MICHAEL HUDSON

Collapse Gimmick Interest Negative Peopel
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
That’s the “magic” of double-taxation treaties: you can shop around for the lowest taxer.
MICHAEL HUDSON

Magic Taxation Treaties
I don’t think that governments should permit speculation in raw materials, because they’re what the economy basically needs.
MICHAEL HUDSON

Government Needs Thinking
Driving down the interest rates creates a boom in the stock market, and also the real estate market. The resulting capital gains not treated as income.
MICHAEL HUDSON

Driving Estate Income Rates Real
The aim of promoting low down payments is to push prices back up so that fewer houses are going to be in negative equity and fewer people are going to walk away from the mortgages. That will save the from taking a loss on their junk mortgage loans.
MICHAEL HUDSON

House Loss Payments People Promoting
Europe is acting in a very self-destructive manner, but is doing so because it’s trying to be loyal to the United States.
MICHAEL HUDSON

Europe Self Trying
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
The seeming irony is that it’s so bad that it enables the Democratic Party to think, “A-ha, all we have to do is be the lesser evil.
MICHAEL HUDSON

Enable Evil Lesser
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
When economists speak of money, they neglect that all money and credit is debt. That is the essence of bookkeeping and accounting. There are always two sides to the balance sheet. And one party’s money or savings is another party
MICHAEL HUDSON

Accounting Balance Bookkeeping Party Speak
America needs an ineffective president. That’s much better than an effective president that’s going to go to war with Russia, that’s going to push for the Trans-Pacific Partnership, that’s going to protect Wall Street, and that’s going to oppose neoliberal austerity.
MICHAEL HUDSON

Party Protect Wall War
Junk economics denies the role of debt and denies the fact that the economic system we have now is dysfunctional.
MICHAEL HUDSON

Economic Fact Junk System
Textbooks don’t teach people how to avoid paying any income tax. But that’s what an army of tax lawyers and corporate tax accountants do.
MICHAEL HUDSON

Army Income People
People think of a parasite as simply taking money, taking blood out of a host or taking money out of the economy. But in nature it’s much more complicated.
MICHAEL HUDSON

People Thinking Wall
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

In fact, there’s no way that banks can be paid everything that they’re owed.

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In fact, there’s no way that banks can be paid everything that they’re owed.

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