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The Eurozone die is cast. Countries must withdraw from the euro so that governments can create their own money once again, and resist creditor demands to carve up and privatize their public domain.
Michael Hudson
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Michael Hudson
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More quotes by Michael Hudson
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
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.
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We go forward with our heads held high, but look back and remember where we come from.
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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.
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No price is too high to pay to try to make the financial system go on a little bit longer. But ultimately it can't be saved, because of the mathematics that are involved.
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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
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. It thought that if it could subsidize banks lending homeowners enough money to buy houses from people who are defaulting, then the bank balance sheets would end up okay.
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Paying debt service to banks leaves less income to buy goods and services.
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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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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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The companies aren't hiring, because consumers don't have enough money to buy the goods and services.
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The effect of metals speculation was to push up the prices that China had to pay to countries like Australia. This squeezed China. 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.
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Most banks - with Deutsche Bank at the top of the spectrum here - have decided that they can't make money lending to barrowers anymore, so they're going to the second business plan: They lend money to casino capitalists. That is, to people who want to gamble on derivatives.
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In China the largest denomination bill they have is 100 yen, and that's maybe $7. So here you have a whole economy working with only a $7 note as the largest denomination. The euro wants to get rid of the 500-euro bill just as the United States years ago got rid of the $1,000 bill because only the criminals used $1,000 bills.
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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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We're at the end of long cycle that began in 1945, loading the economy with debt. We're not going to be able to get out of it until you write down the debts. But that's what the IMF believes is unthinkable. It can't say that, because it's supposed to represent the interest of the banks.
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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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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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In fact, there's no way that banks can be paid everything that they're owed.
Michael Hudson
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