Intro: I need to begin with a MAJOR caveat and tell you how/why this “interview” happened. I did not plan to interview Michael Hudson. I was listening to a well known Russian economist, Mikhail Khazin, and I was fascinated by what he was saying. I also understood only some of the points he was making. To put it mildly, I am not an economist, and while listening to Khazin did did not take any notes. What I did do is email Michael and ask him a few question by email, just to clarify my own thoughts and marginally better my (rather dismal) “understanding” of economic and their role in the current standoff. With this typical kindness and generosity, Michael gave me some very interesting answers, and he agreed to allow me to turn this into an interview. So, here are the caveats to keep in mind: I might have misunderstood or forgotten what Khazin actually said. So if the question sounds stupid, please blame me, not Khazin! As they say in the USA, this entire topic is way above my pay grade…
Please think of this as an exchange between a young and ignorant student and a college professor and my apologies to the economists out there :-)
Having said that, here is my exchange with Michael Hudson:
Andrei: Is it true that the USA cannot raise interest rates to lower the inflation rate as this would trigger a cascading series of bankruptcies and cost the Dems the upcoming elections?
Michael Hudson: The Federal Reserve and Treasury painted the U.S. into a corner with its Quantitative Easing to save the banks and brokerage houses after 2008. The policy succeeded in supporting and even raising real estate prices, and providing arbitrage opportunities to borrow at low rates to buy higher-yielding stocks and bonds, vastly increasing the magnitude of financial wealth. This has been especially the case since the pandemic, creating an estimated trillion dollars in “capital gains” (including short term arbitrage) for the wealthiest One Percent.
What seemed to be the financial death trap was the prospect of rising interest rates ending the free lunch of interest-dividend arbitrage, and easy mortgage money. The threat was to reverse the asset-price run-up. We already are seeing that in recent weeks as stocks plunged to reflect the rise in Treasury bond rates.
But by now, 14 years after the Obama bailouts and QE rescue of insolvent banks, a new condition has emerged: a vast sum of private capital seeking to move out of the financial markets. Many of the most astute One Percent is taking their money and running – into private equity and real estate.
The result is that housing prices are soaring as private capital is out-bidding owner-occupant home buyers. While the latter face rising mortgage-interest rates, private capital finds the likelihood for both current rental income and capital gains to be a much better bet than the stock and bond market. The result will not be a decline in real estate prices, but a decline in home-ownership rates as a shift to rental housing occurs. The financial class is becoming the new absentee landlord class.
Lower stock prices will spur a similar private-capital wave o corporate takeovers, posturing as “rescuers” of the economy. The aim will be short-term asset stripping, of course (that is the business plan of private equity), but it will consolidate ownership in the hands of a financial elite. And to the extent that state and local budgets suffer from the downturn, sell-offs of public land and infrastructure also will transfer property and its rent-extracting opportunities into hands – not with borrowed credit but for all-cash, the cash that QE policy and tax favoritism has brought into being in the past 14 years.
So, to the extent that there are bankruptcies, this will have the usual result: consolidation and concentration of wealth ownership. The non-financial economy’s structure is being transformed – under the slogan of individualistic free markets.
Andrei: Is it true that the two digit industrial inflation in the USA cannot be lowered by means or price control, as that would guarantee even more empty shelves and cost the Dems the upcoming elections?
Michael Hudson: The current inflation is not primarily a monetary phenomenon – except for stock, bond and real-estate prices. Raw materials prices, commodity prices and import prices are rising throughout the world. Domestic price controls have no effect on import prices. In theory, they should be able to reduce monopoly prices, but in today’s world the monopolists may simply let shortages develop and wait out the government.
For meat, eggs and other farm produce, the farmers are not receiving higher prices for their crops and produce. The middlemen are gouging out more fees for themselves, thanks to the monopoly position of Cargill et al.
Andrei: Are those who say that the USA cannot export its inflation to other countries by forcing the latter to deflate their currencies and acquire dollars anymore correct?
Michael Hudson: The inflation is global, not stemming from the United States. The U.S. consumer price inflation reflects its dependence on other countries. Import prices are up, not only because of port congestion and supply shortages, but because of global energy prices and the fracturing of world trade into dollar-using and dollar-avoiding economies.
The most problematic U.S. economic problem is debt deflation, not price inflation. Payments to the FIRE sector for debt service, health insurance and housing are taking a rising bite out of family budgets for the 99 Percent as the economy polarizes between an alliance of creditors, landlords and monopolists at the top, and debtors, renters and hapless consumers at the bottom.
I don’t know what Mr. Khazin means by his idea that the United States is exporting its inflation. What do other countries buy from the United States, besides arms and agricultural output, patent-protected drugs and information-technology?
Andrei: Khazin also said that the USA needs to crash the EU in order to force Europe to purchase dollars and US goods and services HOWEVER any semi-real war in Europe will crash the international markets and, therefore, also crash the US economy.
Michael Hudson: This argument does not make sense. Europe does not have enough balance-of-payments surplus to buy dollars to support the U.S. exchange rate – and the U.S. economy does not need dollars from Europe, as it can simply print them (as MMT, Dick Cheney and Donald Trump have shown). And “crashing Europe” would not give it more means to buy U.S. exports. “Old Europe” has let U.S. financial diplomacy turn the euro into a satellite currency imposing austerity on the continent – a kind of financial NATO suicide pact.
Andrei: The Fed overprinted dollars and that there is now no way to get these dollars back out of circulation, thus is there is a high chance of stagflation in the USA by this summer?
Michael Hudson: Most Fed “dollars” are not spent on goods and services, but on FIRE-sector assets. There is indeed stagnation in store for the 99 Percent, from a combination of debt deflation (payments to the rentier class) and a price squeeze for basic needs. This is a structural phenomenon (as discussed above), not one of “the money supply.”
Andrei: Between a rabid inflation and the very high insecurity about the future of the economy, will the US industries will have to lower (or even stop) a lot of its current production, resulting in major shortages?
Michael Hudson: There is not that much industry left in the United States beyond the military-industrial complex. I wonder what the author imagines is still around to be cut back. OK, movies and entertainment with Covid-19 closing restaurants, Broadway and movie houses. Consumers will pay for what they need, and the wealthiest will buy luxuries, but the clothing and fashion markets don’t have much exposure in today’s masked-up world.
Andrei: Eventually, government payments and handouts will either lose their value due to inflation or won’t even be paid, right?
Michael Hudson: There is no problem of the U.S. government not having the money to pay. Inasmuch as most payments are to the wealthiest FIRE sector classes that have become the political Donor Class, there’s no need to worry. The recent wave of savings INTO Treasury bonds show that it is still the safest haven.
Andrei: Since there is nothing the White House or the Fed can do about any of that, do you think that there will be a lot of violence and state repression?
Michael Hudson: Well, there may be violence from the homelessness that looks imminent from the evictions, now that the Covid rent and mortgage moratorium is expiring. This may indeed take the form of racial tensions. But this is nothing like a revolutionary situation. It is highly localized and “free-market.” No political alternative appears on the horizon, as the U.S. is becoming even more of a one-party state (with the role of the Democrats being to block any challenge from “the left” to pro-Wall Street and pro-corporate Republicans. There really is no left-wing party with an independent program. The Democratic Party has co-opted them and buried them in a minority. So instead of violence, we are likely to see apathy – lower voter turnouts, a rising Republican majority in Congress, and enough Democrats to be Republicans pretending to be Democrats (not only Manchin and Sinema but Pelosi, Schumer, etc.) that psychology and anger will simply turn within. Suicide rates will rise.
In short, it looks like what a schlock 1950s science fiction movie would have described as the End Time of Revelation, rent by earth, air, fire and water. The earth is warming, pollution is continuing to cause extreme weather, forest fires are spreading, water levels are going to rise (and subsoil water is polluted by fracking, while the melting of glaciers create drought, ending electric power from dams). Heavier water is leading to earthquakes. We’re all just waiting for San Andreas and its relatives to blow the Seven Trumpets.
Andrei:So where does this leave Congress and the Democrat/Republican standoff?
Michael Hudson: As long as the filibuster is retained, Congress is paralyzed, as each party has the ability to block the other, and voters are almost equally divided as to whether real estate and financial wealth is to be concentrated in the hands of the One Percent by the Republicans (representing corporate America) or the Democrats (representing Wall Street). With so little difference between them in practice, this leaves law-making to the Supreme Court. And it has been put in place by right-wing Republicans, with full acquiescence from the Democrats (Senator Biden led the party’s notorious support for Justice Thomas.)
That’s why Justice Breyer just announced his retirement from the court today, to give President Biden an opportunity to name the next justice. His problem is to find a black women sufficiently right-wing not to threaten his party’s own Donor Class – knowing that in any case, the court is already set on a Republican cultural-political track for the next decade.
Breyer’s hurry reflected his recognition that the Democrats are about to lose heavily in November’s election, so there are only nine months to install a new member of the Court. The Democratic Leadership insists that the party has already moved too far to the left, despite breaking Biden’s promise to raise the minimum wage, cutting back CARES disbursements from Trump’s $2000 to just $1400, dropping the “social infrastructure” elements of his Build Back Better by being saved by Sens. Manchin and Sinema getting him off the hook so as to back his basic campaign promise that “Nothing will change very much.”
With a policy like that, why should Democrats turn out? What’s he done for them lately? Are they going to believe his rhetoric, or what’s actually happening to the economy and to them?
Andrei: thank you so much, dear Michael, for your time and much needed insights!!
Hudson, as usual, provides incisive comment. Similar conclusions may be seen at the blog: armstrongeconomics.com. Armstrong has been the most important money manager over the years. The point of both is that if one follows the money, one can begin to comprehend domestic and foreign policy.
If the elites do not want war, and why should they as they are profiting handsomely from the present economic situation worldwide, they will block the Anglo-Zionists.
Naked Capitalism just picked this interview up, with a little commentary:
https://www.nakedcapitalism.com/2022/01/the-saker-interviews-michael-hudson.html
Yves Smith uses the manipulated Consumer Price Index that does not reveal the real indebtedness of American citizens.
Instead, those citizens are 14.4 Trillion Dollars in debt.
How can he say the Supreme court has a republican orientation when they added Homosexuals and Trannies to the 1964 Civil rights act? This will cause a massive shift in all areas of American life. Hudson is still thinking of the 20th century Democratic party. 21st century Dems are purely Fascist. Huge military, Imperialistic foreign policy, against Free speech (cancel culture) and obsessed with race, critical race theory. They also show the Fascist traits of being irrational, not believing in logic or the concept of the truth.
The republicans have little understanding of economics, so he is right that a repub victory will mean that the 1% will continue to have the upper hand . It is not an accident that the Democrats are so friendly to the Ukro Nazis, they are fellow Fascists
“How can he say the Supreme court has a republican orientation when they added Homosexuals and Trannies to the 1964 Civil rights act?”
That was a 6-3 ruling; today it would be a 5-4 ruling, Ginsburg having been replaced by Amy Coney Barrett. It is possible that Biden will be able to engineer a replacement for Breyer who would uphold the ruling in question, but this is by no means certain, as (1) such a nominee would require the approval of every Democrat and Democrat-aligned senator plus the tie-breaking Vice President and (2) LGBT+ matters never rise to the level of an actual question during the Senate’s deliberation process for Supreme Court justices.
Senator McConnell can also promise Biden a world of pain — remember, McConnell will be Majority Leader come 2023 — should Biden nominate someone McConnell would not find halfway acceptable.
I would give all that I own to have the chance to sit down with Dr. Hudson for a couple of hours and ask him some questions I think only he could meaningfully answer.
I love reading his articles on his website, I love reading Saker’s blog, and I love reading so many other excellent authors… But I never get a chance to have my questions answered.
I have been trying to figure out some sound policy proposals (I’m a politician in the USA) so I can take my advocacy to the next level. As of now, I don’t have the economic expertise to know if my economic policy ideas are good, bad, or otherwise.
I have carefully worked on what I think are good ideas for economic and political reform but I don’t know how to go about getting sound critique.
I’ve considered writing an article for this blog to see if Saker would be interested in publishing it. I think there are a lot of people, especially laymen who would really appreciate it.
Just had to share that, it’s been on my chest for many years.
Thanks, Saker for posting this. I always love to hear the thoughts of my favorite economist on my favorite blog :-)
Try emailing Dr. Hudson. He is very generous with his time. He may respond positively.
It is surprising he is so productive given his age. (He has been generous with me by the way, and is a kind person. Others have called him Dr. Doom, which he finds hilarious.)
Thank you for this interesting interview.
I am no expert on this subject matter, so I am left with having to discern meaning from patterns of events.
What Mr Hudson is saying is doubtless mostly true and correct.
However, I think I am missing some bits (which seem crucial) from the picture painted in this interview.
The gaps I am referring to is that not once has the word Ponzi scheme been mentioned to describe what is otherwise known as the West’s monetary system. Also, not mentioned, is the fact (yes, really) that the Fed is independent from US politics. The recent changes in law make the Fed able to by-pass the ‘elected’ branches of government (congress, treasury) without even requiring rubber-stamping (as was the cass until recently) of their decisions. This much we know as facts.
We also know that the whole western monetary system is a cartel of banking institutions with BIS at its nexus.
So we have Ponzi schemes upon Ponzi schemes which can be visualized as a pyramid.
In the recent Davos meeting Xi seemed to complain about liquidity, or its lack, and EU banks cannot get repo loans in USD from US banks. That is what I’ve heard.
Recent record breaking wealth transfer (> 1 trillion of USD) could be interpreted as a rift or struggle within the banking cartel.
In this fight the NY Fed and JP Morgan at its apex wanting to ringfence and protect their wealth at the expense of other parts of the Ponzi scheme. This would be the strategy of making sure that your Ponzi scheme is the last one to crash.
This take is explained (and seems pretty convincing), by Tom Luongo at https://tomluongo.me/2022/01/25/whos-afraid-of-jerome-powell/.
Is there any chance someone can reconicle the Ponzi scheme narrative with what Mr Hudson explains?
I find it difficult to believe that US politics and elections are enough to explain what is going on.
Because since when did US politics dominate Fed action and consideration? Never?
The Fed does not ‘print’ money in the sense that most people believe.
The Fed has admitted as much in veiled language in their publications
The Obama bailout was the govt, not the Fed bailing out the FIRE economy,
The deception is deliberate.
Like many institutions they exist because they once had a purpose. When the purpose disappeared, they did not.
As we know, the Fed was created in 1913 in the days of hard money and physical ledgers. At the time the British Pound was the reserve currency or the currency most international agreements were written in. The Fed, at this time had considerable influence over the currency and the money supply of the USA.
After WW2 the USA became the centre of the Empire and the $US became the reserve currency.
The rebuilding of Europe and Asia and the technological and industrial leaps led to an economic boom. When this happens interest rates rise to reflect the demand for money and is created as debt by the banks. The banks being under the laws of their respective countries of incorporation.
At some point in the 1950’s, non US banks began lending in $US and the Eurodollar was born and the so called shadow banking system. In the modern era, the loans are effectively a digital currency loaned on a digital ledger with no physical money ever being produced. This system now dominates the financial world and reserve banks are pretty much spectators. Worse, they pretend to be in control whilst really just anticipating the movements of interest rates and the economy while manipulating sentiment and (hopefully) equity prices.
The reason the Eurodollar dominates is because it evolved outside the regulatory sphere the banks were once subject to. They invented more and more derivatives of money as the world economy grew strongly until the late nineties to a point where the very understanding of what money is was blurred beyond recognition. And the reserve banks of the world actually gave up trying to understand it.
I believe the above words are facts and I will now segway to speculation.
The dot com bust at the turn of the century marked a turning point in the economy.
Deflationary forces accumulated in the form of the digitisation of many industries, demographics and globalisation.
These phenomena led to a financial crisis which led to the 9/11 attacks and the war economy.
Government deficits began to replace private investment as the main economic driver.
In the absence of any other new great stimulatory advancements, the banks recognised what the future held and became more conservative. In 2007-8 the system broke due to this and the world experienced a liquidity crisis which became known as the GFC.
In real terms ie ignoring the lies told by the usual suspects, we are effectively in a depression and have been since 2008 with a shrinking workforce a lying Fed and a monetary system which doesn’t fit the new economic paradigm. It is a debt based system which allowed for rapid growth in a growing economy by providing the liquidity the system needed. Now in a deflationary world, it will freeze up again and again until it breaks and all trust is lost.
The banks and their owners will have war gamed this scenario and if there is one thing I am sure I have learned in my studies it is that those who control the money system will do literally anything to keep that control, from blowing a presidents brains out in public to financing and provoking a world war.
Saker, we are in a pickle but not for the reasons most people would have you believe.
A tip for anticipating the (political) future.
Watch the 5 year, 10y, 20y and 30y interest rates on treasury bonds.
These will tell you what the financial sector thinks of inflation and growth expectations.
Up is good.
Down is bad.
The curve they create on a graph is important.
Curving upward is healthy.
Flattening (over time) is unhealthy.
Inversion of the curve is really bad.
The Eurodollar interest rate curve is inverted (from about May 2024 from memory).
This is bad.
This is an excellent comment & I think you have hit the nail on the head – because much of what Michael Hudson says does not make much sense to me, I respect him greatly, but I suspect that he does not understand all the contours of the financial system himself. An interview Ben Norton did with Hudson for example exposed this, Norton asked him numerous questions to which he did not really provide clear answers, Norton asked Hudson what is it that is causing the rising inflation in the US at this time, & Hudson did not really answer, he sidestepped & went into discussing something else. But this is a key question, irrespective of how fraudulently the US calculates its inflation, its inflation began rising the minute the main covid crisis restrictions began to be lifted – which to me signified that one of the reasons for the lock down in the first place was to prevent a major financial crisis by freezing the economy & the finance system. Hudson questions Khazin’s notion of the US exporting inflation, but what else does the US do other than export the Dollar, through effectively forcing the world to hold US treasuries, thereby enabling the US to run up huge debts that the rest of the world finances – hence enabling the US to issue USD i.e. print dollars into infinitum. The inflation is a signifier that the so-called QE, the issuance of dollars, has begun to form a bubble, the amount of dollars in circulation is exceeding what is actually used in real transactions – & this, it seems is causing the inflation rate to rise. If Hudson understands this differently, I for one would like to hear his explanation.
Fiscal stimulus caused inflation. Monetary stimulus (past 12 years of QE ,low interest rates etc.) mostly have gone to financial asset bubble , to the 1% but didn’t impact real economy. Fiscal stimulus have gone in real economy and caused inflation instantly, that is what Hudson didn’t address. And there is one more thing beside monopolization of economy. Because of under investment in productive assets (factories, production machines etc.) since 2009 there is there is a deficit in supply side, and it is starting to manifest it self. You cant import everything, and if local producers do not have source of cheap capital (because all have gone to speculation), they will keep old machines (that lower productivity) until they break down and then rundown operations and lay of workers.
From what I’ve managed to read (auto-translated and with my poor Russian skills) of Mikhail Khazin, and from what I managed to understand (considerably less, despite the fact I studied Economics – which is mostly neoliberal today; perhaps that explains it), I have the impression Khazin never really **explains** the matter in detail, systematically and holistically. Methinks he’s very intelligent but he keeps something to himself (maybe to his paid consultant services). So even if we translate an article for Michael Hudson, that may not be as productive as we imagine – unfortunately. However, my intuition has always told me to trust Khazin and that he’s always going to be more right than wrong. Maybe we could bring Khazin here? And if I’m not mistaken, another Russian who calls himself a “geostrategist”, Andrey Shkolnikov, could also be helpful in this regard (the economy); his writing is more methodical. Not that we need methodism but you get the point.
Khazin, Hudson and Shkolnikov appear to me as the three blind men and the elephant. None of them has anything like a complete picture. Hudson, for instance, talks about wealth distribution and accumulation but doesn’t mention wealth destruction. Khazin and Shkolnikov have similar blind spots.
I think it would be great to properly present Khazins views to the English speaking audience. I haven’t heard or read any western analyst describing problems that we are facing today the way Khazin does.
Yes, best thanks for these insights. Should be made every six months our at an appropriate Time.
I think if the USA manages to have Russia scares the hell out the European countries and have a situation like the cold war during ussr, for one thing the euro will lose its share market that was taken from the dollar, this will increase the demand for the dollar. And if the USA hits the jackpot by the EU disintegrate and go back to their old currencies, the dollar will regain most of its share market of the international trade payment. And maybe this is the plan. Then, the USA will decide to print more dollars to keep its value the same or not to print and its value will increase and becomes attractive once again to many countries.
I think the euro did do some damage to the dollar, but the empire needs Nato. So, a thin line was walked on by the empire, to eat the cake and have it too.
Also, I think Putin must have known this would happen sooner or later. This is why Putin didn’t his foot down, I guess.
@Yousef
I believe the disintegration of the Eurozone may provide short term benefits to the USA but in the long term it will be more difficult to control the 19 individual currencies instead of a single one. If it disintegrates, the digital Yuan could then more easily gain acceptance in individual countries looking to free itself for US Dollar hegemony.
@HCNorth
Controlling 19 small countries will be much easier than one block with common currency, the way it was before the EU. When they see a threat by Russia, they stay close to and dependant on USA for protection. This will be similar to the situation in the oil rich Arab countries in fear of Iran. Even with Chinese digital currency, the Europeans will be in line and under the foot to accept only the $. So between the USA and 500 million Europeans will enable the dollar to have a good share of the new world emerging reserve currencies.
Thanks for the article and all those comments bringing aspects that leave me wondering. I stick to basics in order to keep my mind balanced, rooted in some rudimentary understanding. Interesting, Youssef, your take on the Euro going down, European countries going back to their currencies and the dollar benefiting from that. All you say is logic. I believe it is a possibility, one of those branches of futures in some algorithms, one of those plans.
I think though that there are several hypothesis to consider… it becomes quickly unpredictable.
“ if the USA manages to have Russia scares the hell out the European countries and have a situation like the cold war during ussr” is, to my dismay, quite likely, even if the statistic pool from which I draw my guess is limited to one person, my dad, from France! He freaked out when I sent him some articles and comments from the saker blog. First he warned me about the CIA big brother watching thing, and then he asked me not to send him any more “complotist” propaganda.
I felt hurt/angry. I sent him a “be happy” meant to be “f**k you”. But, the funny thing, is that, a few days later he sent me a message saying that he mailed me a French magazine, “ the nouvel Obs”,to show me that the goulags are reopening in Russia! Sad to say, but most of the French press has been bought by billionaires. And their propaganda works.
Another hypothesis is “what if the US implodes first?”
I realize, again and again, that it is the whole system that needs to collapse… “The monopoly game” is ending… we won/ we lost.
sorry, I was, at the beginning, going to say, well, I am in favor of France getting out of the Euro, the EU and NATO, getting a start in recovering some sense of sovereignty, but still, that wouldn’t take care of the monopolies, the private banks, the anonymous or opaque quality around who owns what and who finances what, plus the “free” market, plus the tax heavens.
Already the Greeks knew, in their decadent stage, that there are only choices between a bad thing and one not as bad. We, in the west, went for the free lunch, like “boomers”, lightly, free of responsibility and duty, just power and rights. Now comes the doomers reality and maybe the bloomers will save the day… or, at least, their soul. Maybe those bloomers, those brave souls, can seed a humanity beyond the apparent loss.
As they say in Al-anon, the triple A: awareness, Acceptance and Action.
May we bloom and keep blooming before we die.
What comes to my mind now is that final song of the movie “Hair”, “Let the sunshine”.
I need to shake off that “apathy”, that depression thing. I need to feel, to be calm, and enjoy those simple moments, like watching the sun as well as my dogs run and play, day after day. It doesn’t get old.
Be well.
I can’t argue with anything Michael Hudson is saying,
the real pisser is that whatever he is saying about the US is pretty much the same case in all the other Anglophone countries and also the EU,
if you don’t want to spend the next decade or so living in a stagnating depression you’ll have to relocate and it’ll have to be somewhere outside of the influence of the dollar and not in the US militaries crosshairs,
during the Soviet era the Jews were given an autonomous region in the far East of Russia, they didn’t seem to like it much,
if Russia was offering a resettlement area for disenchanted Anglo’s and Europeans in the far East I’d seriously consider relocating, what people really need is access to land at affordable prices so that they can reap some benefit from their efforts and build up capital and reinvest it,
currently in the West the 99% are looking at being squeezed from all directions, living hand to mouth and seeing their standard of living progressively falling,
if the Jews don’t want that autonomous oblast can we have it?
Postovani Sokole,
Pratim te u Srbiji prego gugl prevoda desetak godina i,blago receno, odusevljen sam.
Drago mi je sto si i ti pogledao Hazina i sve to komentarises sa Hadsonom.
Zbog tvog velikog prisustva,bukvalno u celom svetu,predlazem ti, da Hazinove komentare sa prevodom
stavis kod sebe. Nesto slicno kao i komentare Andreja Martjonova.
Neznam engleski,ali se iskreno nadam da ce se moj komentar nekako objaviti.
Mozda se opet,ponekad javim.
Bratski pozdrav iz Srbije
——-
Machine translation:
Dear Falcons,
I’ve been following you in Serbia for about ten years and, to put it mildly, I’m thrilled.
I’m glad you looked at Hazin and commented on it with Hudson.
Because of your great presence, literally all over the world, I suggest that Hazin’s comments with translation
put it to yourself. Something similar to Andrej Martjonov’s comments.
I don’t know English, but I sincerely hope that my comment will be published somehow.
Maybe I’ll call again, sometimes.
Brotherly greetings from Serbia
Dear Serbian brother
Thank you for your kind comment!
It is always a joy for me to hear from Serbian friends.
Kind regards
Andrei
Martin Armstrong says China will be the largest economy by 2032 , the dollar has just 10 years left to rule , once China passes the US it will kill the petrodollar which is what backstops the current world reserve currency the dollar without the petrodollar USD will collapse along with USA militaryindustrial empire . There is nuthing anyone can do to stop this and is the reason both China and Russia have been patient.
In real terms, the PCR has already passed the US a while ago
My 2cts
Andrei
Armstrong also wrote today that the attitude of the west towards Russia reminds him of the black actor in the movie Blazing Saddles when he puts his own gun to his head and says “the next man who moves, the ni***r gets it”.
As Andrei said, China’s GDP already surpasses the USA’s.
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)
Postovani Sokole,
Pratim te u Srbiji prego gugl prevoda desetak godina i,blago receno, odusevljen sam.
Drago mi je sto si i ti pogledao Hazina i sve to komentarises sa Hadsonom.
Zbog tvog velikog prisustva,bukvalno u celom svetu,predlazem ti, da Hazinove komentare sa prevodom
stavis kod sebe. Nesto slicno kao i komentare Andreja Martjonova.
Neznam engleski,ali se iskreno nadam da ce se moj komentar nekako objaviti.
Mozda se opet,ponekad javim.
Bratski pozdrav iz Srbije
Translation. Mod:
Respected Hawkeye, I’ve been following you in Serbia for about ten years and, to put it mildly, I’m thrilled. I’m glad you looked at Hazin and commented on it with Hudson. Because of your great presence, literally all over the world, I suggest that Hazin’s comments be translated You put it on you. Something similar to Andrei Martyonov’s comments. I don’t speak English, but I sincerely hope that my comment will be published somehow. Maybe I’ll call again sometime. Brotherly greeting from Serbia
Great piece. Michael Hudson is a smart guy but is ignoring the proverbial elephant in the room. A central pillar of post-WWII US global power has been to maintain the dollar as the worlds reserve currency. This ‘luxury’ has been systematically eroded by: 1) decades of neoliberal economic policies- multiple tax cuts for the wealthy, financial deregulation, job-outsourcing to Mexico, China and other low-wage platforms, which set up the Global Financial crisis (GFC) 2007-2008, 2) Since that time the FED has used the Treasury as a taxpayer-supported ‘piggy bank’ to provide circa $50 trillion of ultra-cheap money to prop up equities, bonds and over-priced real estate (creating the ‘everything bubble’); 3) Post 911- militarization has cost US taxpayer circa $21 trillion; despite this taxpayer largess, the Pentagon confronts a repeat of the $2 trillion debacle in Afghanistan, in Iraq, Libya, Syria and Yemen. Apparently, the US ruling elite learned nothing from this exercise- the 2022 Military budget exceeds a record $770 billion (See-https://watson.brown.edu).
Bottom line- The American Empire confronts irresolvable economic problems- exploding debt, strategic debacles in Iraq, Libya, Syria, Yemen, and a Russia-China-Iran axis that has reached economic/military parity and an obstacle to US global power. Indeed, the very survival of American capitalism is contingent upon constant debt monetization (aka money printing) to prop up financial markets and the military. This is becoming increasingly tenuous as this orgy of money printing and debt has created gigantic bubbles- aka the ‘everything bubble’, which has increased inflation and threatening to derail the dollars role as the world reserve currency. Unfortunately, Biden’s plan to confront the Russia-China-Iran axis in Ukraine is only going to hasten the demise of the American Empire.
“No political alternative appears on the horizon, as the U.S. is becoming even more of a one-party state”
I think there could be strikes. The U.S. might resemble Weimar Germany, or the pre-coup Ukraine, where the voters try voting for one party after another. Trump might have shown how this will work in America’s faux-democracy, where the establishment has much control over the politics. I am skeptical of the establishment’s ability to hold power, simply because they are so stupid. If they were smarter– maybe, but when you are that inept, your prospects are dim. More Americans might immigrate to Russia and other countries.
The gist of what Hudson is saying is that both parties are equally corrupt and beholden to the the same ultra wealth class interests (i.e. different factions within the 0.1%) and that both parties will continue to push the status quo policies to impoverish the common people of the “Western Nations” and that we can look forward to a slow burn as it were, with the Western populations getting poorer and poorer until what exactly? Hudson seems to imply that removing the filibuster will somehow allow new laws to be passed that will reverse this progression and lead to positive change, however that seems overly optimistic. If the filibuster is removed, i think a far more likely outcome is the ruling party will simply repeal the laws the prior government passed, we’ve seen it time and time again, a Democrat/Republican government gets in, has the authority to rule as they like for 2-4yrs, then gets kicked by the other party which then repeals the laws they didn’t like and passes new laws and then the cycle starts again ad nauseam. Additionally, if both parties are ultimately controlled by the same interests (the 0.1%), why would the parties suddenly start ruling for the good of the common people, just because the filibuster was removed, I would think this would just mean factionalism within the 0.1% would get even worse and more violent, since without the filibuster there would be no restriction in what the winning party could do to enrich their friends or impoverish their foes.
As unsatisfactory as it sounds, I think the only real solution to the issue of the irredeemably corrupt elites in the West, is a failure so disastrous, so all-encompassing that it completes washes the current elite class away like a tidal wave (something on the level of a French revolution or the breakup of the Soviet Union). Currently, I think the Collective West is heading towards a Soviet Union style collapse that will occur over the next 20-30yrs leaving massive devastation in its wake
@Idiocrates
He did not use the term Ponzi scheme but I believe he did describe one aspect of it: “The policy [QE] succeeded in supporting and even raising real estate prices, and providing arbitrage opportunities to borrow at low rates to buy higher-yielding stocks and bonds, vastly increasing the magnitude of financial wealth.”. He also mentioned debt deflation, which I believe is another aspect of it.
I may have misunderstood your comment so if so, please let me know.
Having listened to and read what Dr. Hudson has shared for years, he’s pointing out a new direction for the top 10%/1% wealthiest in America since it’s understood that the stock market has become so thoroughly corrupt that it’s turned into a cesspool.
Hudson seems to be saying that the Super Elite & the hanger-ons will be purchasing homes, apartments/rentals and land. The prices to live in those dwellings will skyrocket along with the already increased water utilities, electricity/natural gas monthly costs. Needless to say, we shall see millions of citizens thrown out in the streets.
In adding to that tragedy, we know US citizens are already in debt to the tune of 14.3 Trillion dollars. Good jobs have become scarce. They’re mostly part-time, low wage jobs.
Those two deadly factors tell us everything about an entire society descending into 3d World status.
There won’t be any caped crusader to help us out of these miseries.
We think it’s time that citizens stop everything and start learning at least two foreign languages. Non Western countries will be places to relocate.
Thank you very much for the valuable interview with Prof. Hudson. He confirms that this is the situation:
“…the real pisser is that whatever he is saying about the US is pretty much the same case in all the other Anglophone countries and also the EU, (..) if you don’t want to spend the next decade or so living in a stagnating depression you’ll have to relocate and it’ll have to be somewhere outside of the influence of the dollar and not in the US militaries crosshairs”
“In adding to that tragedy, we know US citizens are already in debt to the tune of 14.3 Trillion dollars. Good jobs have become scarce. They’re mostly part-time, low wage jobs. Those two deadly factors tell us everything about an entire society descending into 3d World status. There won’t be any caped crusader to help us out of these miseries. We think it’s time that citizens stop everything and start learning at least two foreign languages. Non Western countries will be places to relocate.”
And that this is also a politically desired scenario.
It is difficult to predict whether the increase in suicide rates will be enough to keep the situation stable within the West as a whole. But certainly the rest of the world is aware of these choices and knows that by reorganising itself it will have many new possibilities for healthy growth and future well-being.
@ Yousef
As I see it, from the perspective of the USA, it is easier to control a single currency irrespective any fears whipped up by the powers that be.
As to your comment about Iran, I believe that to be AngloZionist-induced fear because they are leading the resistance against AngloZionism in the region. There is even rapprochement talks going on between Iran and Saudi Arabia.
Finally, the US Dollar may retain reserve currency status for the one billion Canadians/USAmericans/Australians/Europeans, but it will pale in comparison to the digital Yuan which will be adopted by the 6 billion other citizens of the world.
The present situation in the United States can be compared to that in the UK during the 19th century. The rising bourgeois class of the British classical school of political economy – Adam Smith, David Ricardo, and John Stuart Mill who were in a restricted sense disinterested enquirers but, in addition, they were also political and social reformers, champions of a class struggle of the rising industrial bourgeoisie against the land-owning aristocracy. Ricardo’s part in the repeal of the Corn Laws, and Mill’s championing of the poor and dispossessed in addition to women suffrage which included the extension of votes for women, Irish reform, and the prosecution of Governor Eyre for atrocities committed during his administration of Jamaica, cast them as significant political agitators against the ancien-regime. The prevalent hegemony of the rentier class, however, was a formidable impediment to economic development, and the aforementioned trio were in a sense on the right side of history in both normative and political drift. Notwithstanding their progressive beliefs these proponents of nascent capitalism had, as Marx was to point out, their theoretical limitations; their political economy reached its apogee with Mill’s classical reformist liberalism (in the true sense and meaning of the word) but was superseded by the altogether dubious political elements who were the ideological foot-soldiers of the rentier class
This was manifest in the reactionary and openly class orientation of the neo-classicists (sometimes called the ‘marginalists’) Stanley Jevons, Leon Walras and Carl Menger who provided the theoretical underpinnings and rationale of capitalist rule. This new ‘scientific economics’, which was established circa 1870, was essentially a doctrine of pseudo-scientific twaddle whose axioms were taken to be self-evident.
The appearance of this ideological counter-revolution presaged a grotesque stalling in the capitalist system which has lasted to this day; the bourgeois revolution was never completed in the UK, as it was in France and the United States, and industry had always played second fiddle to finance and landed property. In the UK, or more precisely in England, this rent-seeking, rentier economy has been complemented with political anachronisms such as the monarchy, with the monarch as head of state, and a non-elected second chamber (The House of Lords) as well as an unwritten (i.e., non-existent) constitution. Britain has been rightly described as a ‘Banana Monarchy’ which is not far from being an accurate description.
But, unquestionably, now, it is the turn of the US being locked into a counter-revolution from above; this counter-revolution is being imposed through the present representatives in the institutional political, economic and ideological structures of power. The American ruling class is now the impediment to social and economic development as was the British ruling class in an earlier period. From Alexander Hamilton to FDR the US was rightly regarded as being an open democratic, political and economic system which unfortunately has now been turned on its head.
Neo-liberalism and neo-conservatism of the current variety, as opposed to 19th century reform/classical liberalism, has been the direct descendent of the neo-classical school and subsequently the dominant ideological vehicle for the last 150 years, particularly in the Anglo-American world. (As an appendage, a watered-down version of Keynesianism was added on during the post WW2 period 1945-1975). Suffice it to say that Keynesianism and its proponents (1945-1970) has not been in favour since the stagflation of the 1970s.
Different and reactionary class alignments in the western world have usurped the mass of the population and introduced a ruling reactionary of bloc of oligarchs throughout the western world.
“But by now, 14 years after the Obama bailouts and QE rescue of insolvent banks, a new condition has emerged: a vast sum of private capital seeking to move out of the financial markets. Many of the most astute One Percent is taking their money and running – into private equity and real estate.“
One would think that this process of the One Percent ditching stocks and moving to real estate and private equity will greatly accelerate given that the mortgage moratorium will soon expire leading to more mortgage defaults.
Now add this to the equation, “The most problematic U.S. economic problem is debt deflation, not price inflation. Payments to the FIRE sector for debt service, health insurance and housing are taking a rising bite out of family budgets for the 99 Percent as the economy polarizes between an alliance of creditors, landlords and monopolists at the top, and debtors, renters and hapless consumers at the bottom.”
It all seems like a never-ending loop.
Samo nebo zna koliko mi je drago što mi odgovori
Voli bata
The present situation in the United States can be compared to that in the UK during the 19th century. The rising bourgeois class of the British classical school of political economy – Adam Smith, David Ricardo, and John Stuart Mill who were in a restricted sense disinterested enquirers but, in addition, they were also political and social reformers, champions of a class struggle of the rising industrial bourgeoisie against the land-owning aristocracy. Ricardo’s part in the repeal of the Corn Laws, and Mill’s championing of the poor and dispossessed in addition to women suffrage which included the extension of votes for women, Irish reform, and the prosecution of Governor Eyre for atrocities committed during his administration of Jamaica, cast them as significant political agitators against the regime. The prevalent hegemony of the rentier class, however, was a formidable impediment to economic development, and the aforementioned trio were in a sense on the right side of history in both normative and political drift. Notwithstanding their progressive beliefs these proponents of nascent capitalism had, as Marx was to point out, their theoretical limitations; their political economy reached its apogee with Mill’s classical reformist liberalism (in the true sense and meaning of the word) but was superseded by the altogether
The reactionary and openly class orientation of the neo-classicists (sometimes called the ‘marginalists’) Stanley Jevons, Leon Walras and Carl Menger who provided the theoretical underpinnings and rationale of capitalist rule. This new ‘scientific economics’, which was established circa 1870, was essentially a doctrine of pseudo-scientific twaddle whose axioms were taken to be self-evident.
The appearance of this ideological counter-revolution presaged a grotesque stalling in the capitalist system which has lasted to this day; the bourgeois revolution was never completed in the UK, as it was in France and the United States, and industry had always played second fiddle to finance and landed property. In the UK, or more precisely in England, this rent-seeking, rentier economy has been complemented with political anachronisms such as the monarchy, with the monarch as head of state, and a non-elected second chamber (The House of Lords) as well as an unwritten (i.e., non-existent) constitution. Britain has been rightly described as a ‘Banana Monarchy’ which is not far from being an accurate description.
Unquestionably the US is locked into a counter-revolution from above being, this counter-revolution being imposed through the representatives in the institutional political, economic and ideological structures
Neo-liberalism, as opposed to 19th century reform/classical liberalism, has been the direct descendent of the neo-classical school and subsequently the dominant ideological vehicle for the last 150 years, particularly in the Anglo-American world. (As an appendage, a watered-down version of Keynesianism was added on during the post WW2 period 1945-1975). Suffice it to say that Keynesianism and its proponents (1945-1970) has not been in favour since the stagflation of the 1970s.
There’s a very, very simple solution to the US housing issue:
1. Make a class of homes not allowed to be purchased by non-domestic purchasers.
2. Frame tax laws to make mass purchase of homes by the financial class unviable.
The simple problem the USA has is that it frames everything in terms of money instead of framing everything in terms of what a healthy society should look like.
You don’t create children as a financial investment, do you?
Well, children are the future of every country on earth….
I take issue with Mr Hudson’s statement that, “The current inflation is not primarily a monetary phenomenon – except for stock, bond and real-estate prices.”
See the following graph which shows the total “reserves” in the banking system (blue line), and total deposits in the commercial banking system (red line). The blue line more or less tracks QE, and the red line shows how much the non-banking public has to spend. As you can see, the red line has increased significantly since March of 2020. More money chasing fewer goods adds up to price inflation. I got the idea of these graphs from John Titus’ video “Meet the Fed’s New BFF” on YouTube ( http://www.youtube.com/watch?v=X_RA23LDiuA&t=227s )
https://fred.stlouisfed.org/graph/?graph_id=978104&rn=408