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

Michael Hudson

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Michael Hudson
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More quotes by Michael Hudson

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A derivative is a bet on whether a stock, or a bond or a real estate asset, is going to go up or down. There's a winner and a loser. It's like betting on a horserace.
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Money is not a factor of production. But in order to have access to credit, in order to get money, in order to get an education, you have to pay the banks.
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People are putting their money into treasuries because they worry that the risk of putting their money into the bond market, the stock market or even the money markets is very high.
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A stand in is a politician who can deliver her constituency to her Wall Street backers. That's what a politician does in America. You get a constituency you make them believe your promises, and then you turn them over to your financial campaign backers. That's what politics has become and that's as much an art of deception as economics is.
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Nobody prefers to earn income any more, because that's taxable. Rich people prefer to make capital gains.
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Stocks always go down much faster than they go up. That's why it's called a crash. People who put their money into the stocks will find, all of a sudden, that stock prices are no longer being supported by the debt leveraging that's been holding them up.
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I don't think that governments should permit speculation in raw materials, because they're what the economy basically needs.
Michael Hudson
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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
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As you have to pay more interest and amortization on what you owe, you're left with less and less money to buy goods and services - unless you borrow even more and go further into debt.
Michael Hudson
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Paying debt service to banks leaves less income to buy goods and services.
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So the political choice today is much like the 1930s, when the global economy also broke down. The choice is between nationalism and populism on the right, or socialism reviving what used to be left-wing politics.
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In real estate you can avoid ever having to pay a capital gains tax, decade after decade, century after century. When you sell a property and make a capital gain, you simply turn around and buy a new property. The gain is not taxed. It's called preserving your capital investment - which goes up and up in value with each transaction.
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We go forward with our heads held high, but look back and remember where we come from.
Michael Hudson
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If bankers can push the loans and make more profits for the bank, they get paid higher bonuses. They often also get stock options. If the bank goes under, they get to keep all of these salaries and options - and the government will bail out the bank. These guys will take their money and run, which is pretty much what they're doing now.
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Just like a house is worth whatever a bank's going to lend against it, an education is worth whatever the bank is going to lend the student to pay the university. So the availability of government-guaranteed student loans has vastly inflated the cost of education, just like it's inflated the cost of housing.
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Most people think of the economy as producing goods and services and paying labor to buy what it produces. But a growing part of the economy in every country has been the Finance, Insurance and Real Estate (FIRE) sector, which comprises the rent and interest paid to the economy's balance sheet of assets by debtors and rent payers.
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Deflation means a slowdown of income growth. Markets shrink, new capital investment and employment also taper off, so wages decline. That is what's happening as deliberate policy in Europe and the United States. Falling or stagnant prices are simply the result of having less income to spend.
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Trump's junk economics is the illusion that if we cut the taxes on the wealthiest brackets, it'll all trickle down. But it doesn't trickle down.
Michael Hudson
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More and more money is being extracted from of the production and consumption economy to pay the FIRE sector. That's what causes debt deflation and shrinks markets. If you pay the banks, you have less to spend on goods and services.
Michael Hudson
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What's bad for the frackers usually is good for the rest of the world.
Michael Hudson