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A bubble is only called that after it bursts, after the insiders get out, leaving the pension funds and small investors, Canadians and other naïve investors holding the bag.

Michael Hudson

The problems of 2008 were never cured. The Federal Reserve’s solution to the crisis was to lend the economy enough money to borrow its way out of debt.
MICHAEL HUDSON

Balance House People
Since 2008 you’ve had the largest bond market rally in history, as the Federal Reserve flooded the economy with quantitative easing to drive down interest rates.
MICHAEL HUDSON

Gains Income Real
The United States and Europe are in a state of debt deflation, where people and businesses have to pay banks instead of spending their income on goods and services. So markets shrink, sales and profits fall, and the stock market turns down.
MICHAEL HUDSON

Country Deflation Fall People
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
You could say that the vote to withdraw from Europe is, it’s really a vote of the British middle class, the working class, to withdraw from the U.S. neoliberalism that has been running Europe for the last ten years.
MICHAEL HUDSON

Middle Class Running Vote
Nobody prefers to earn income any more, because that’s taxable. Rich people prefer to make capital gains.
MICHAEL HUDSON

Gains Income People
We’re still in the collapse that began after 2008. There’s not a new collapse, there hasn’t been a recovery.
MICHAEL HUDSON

Collapse Recovery Stills
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
Elites play the role today that landlords played under feudalism. They levy interest and financial fees that are like a tax, to support what the classical economists called “unproductive activity.”
MICHAEL HUDSON

Financial Support Today
Small banks that lend to consumers are fine.
MICHAEL HUDSON

Banks Consumers Fine Small
We’ve turned the post-war economy that made America prosperous and rich inside out.
MICHAEL HUDSON

People Rich Winning
Inflation usually helps the economy at large, but not the 1% if wages rise. So the 1% says that it is terrible.
MICHAEL HUDSON

Economy Helping Wages
Once the speculative demand ended, all of a sudden the added production facilities that had been brought into production by the high prices went out of production again, and there was a glut.
MICHAEL HUDSON

Demand Ended Glut Once Production
New investment and employment fall off, and the economy is falls into a downward spiral.
MICHAEL HUDSON

Downward Economic Employment New Spiral
To save the banks, you would have to turn the entire Eurozone into Greece.
MICHAEL HUDSON

Country Eurozone Greece People Turns
If you look at payments to labor as a proportion of national income or gross domestic product, you find profits going way up, investment and savings going up.
MICHAEL HUDSON

Income Investment Looks National Savings

A bubble is only called that after it bursts, after the insiders get out, leaving the pension funds and small investors, Canadians and other naïve investors holding the bag.

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A bubble is only called that after it bursts, after the insiders get out, leaving the pension funds and small investors, Canadians and other naïve investors holding the bag.

Related Topics

Popular Authors

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