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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

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Michael Hudson
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More quotes by Michael Hudson

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When they say inflation is bad, deflation is good, what they mean is, more money for us 1% is good we're all for asset price inflation, we're all for housing prices going up, and we're all for our stock and bonds prices going up. We're just against you workers getting more income.
Michael Hudson
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The concept of productivity in America is income divided by labor. So if you're Goldman Sachs and you pay yourself $20 million a year in salary and bonuses, you're considered to have added $20 million to GDP, and that's enormously productive. So we're talking in a tautology. We're talking with circular reasoning here.
Michael Hudson
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Governments create money and spend it into the economy by running budget deficits. The paper currency in your pocket is technically a government debt.
Michael Hudson
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The world's politics are in turmoil, not to mention the Mideast, where the US has mounted attacks from Libya to Iraq to Syria, and ISIS is attacking governments in today's pipeline rivalry.
Michael Hudson
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The price decline is a result of having to pay debts. That drains income from the circular flow between production and consumption - that is, between what people are paid when they go to work, and the things that they buy.
Michael Hudson
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When Hillary Clinton said she's going to do just what Obama does and we're going to continue to recover, most people know that we're not recovering at all. We're shrinking.
Michael Hudson
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The IMF acts as the collection agent for global bondholders. Its projections begin by assuming that all debts can be paid, if economies will cut wages and wiping out pension funds so as to pay banks and bondholders.
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.
Michael Hudson
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We're in a chronic debt-deflation. There's no way we can recover unless you write down the debts. And that's what the IMF basically is implying (and it was explicit regarding Greece), but its not spelling it out, because that's not what can be said in polite company.
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.
Michael Hudson
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Nobody prefers to earn income any more, because that's taxable. Rich people prefer to make capital gains.
Michael Hudson
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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.
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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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.
Michael Hudson
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The ideological foundation of today's business schools is that economic control should be shifted out of government hands into those of financial managers - that is, Wall Street.
Michael Hudson
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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.
Michael Hudson
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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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When you say bank, a bank is a building, a set of computers and chairs and things. The bankers are the people running these banks. They're the chief officers, and they push the loans because they don't care if they go bad. For one thing, they may package these bad loans and sell them off to gullible institutional investors.
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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When there's deflation, it means that although most markets are shrinking and people have less to spend, the 1% that hold the 99% in debt are getting all the growth in wealth and income. Deflation means that income is being transferred to the 1%, that is, to the creditors and property owners.
Michael Hudson