Michael Hudson
Michael Hudson
real fire pay
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.
debt pay interest
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.
fire debt pay
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.
debt pay economy
Mathematically, debts grow exponentially at compound interest. Banks recycle the interest into new loans, so debts grow exponentially, faster than the economy can afford to pay.
adam avoiding banks care central debts dollar foreign fund government health intend paying pension private repay smith trillion
They're never going to be repaid. Adam Smith said that no government had ever repaid its debts and the same can be said of the private sector. The U.S. government does not intend to repay its trillion dollar debt to foreign central banks and, even if it did intend to, there's no way in which it could. Most of the corporations now are avoiding paying their pension fund debts and their health care debts.
corner forces lebanon others seriously sufficient supporters turn unlikely
Certainly, anti-Syrian forces in Lebanon feel on the defensive, nervous, frightened, depressed. The Syrians may be out in one way, but in others they're always right around the corner and have sufficient friends and supporters in Lebanon that make it unlikely it will turn into a seriously anti-Syrian place.
loss people house
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.
debt wipe fresh-start
Normally, if someone goes bankrupt, you wipe out the debt and get a fresh start. But that's not permitted with student loans. So the effect is to impoverish many graduates with very high debts.
nice agency government
In housing you have jingle mail and you can walk away and leave the bank holding the bag. In the case of student loans, the debt follows you through life, and the banks or government will turn it over to collection agencies that are not very nice people and can do all sorts of harassing things to you. It's becoming a nightmare.
writing done debt
Throughout history, the only way of restoring stability is to write down the debts. That is treated now as if it's something that can't be done. But it's the only thing that's going to revive the economy.
years creating giving
Everybody would be better off if they could buy housing for only, let's say, a carrying charge of one-quarter of their income. That used to be the case 50 years ago. Buyers had to save up and make a higher down payment, giving them more equity - perhaps 25 or 30 percent. But today, banks are creating enough credit to bid up housing prices again.
writing shrinking debt
Basically, unless you're willing to write down debts and save the economy, you're going to have deflation and a steady drain in purchasing power - that is, shrinking markets.
people doe shrinking
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.
labor-force worry people
When we say "people worry" about inflation, it's mainly bondholders that worry. The labor force benefitted from the inflation of the '50s, '60s and '70s.