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.
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.
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.
When people are running up more and more debt for housing, they call that "real wealth." It exposes what's wrong in the mainstream economics and why most of the economics that justifies austerity programs and economic shrinkage is in the textbooks is not scientific. Junk economics denies the role of debt and denies the fact that the economic system we have now is dysfunctional.
The economy is being run primarily by the banks for their own interest.
In fact, there's no way that banks can be paid everything that they're owed.
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.
People think of a business cycle, which is a boom followed by a recession and then automatic stabilizers revive the economy. But this time we can't revive. The reason is that every recovery since 1945 has begun with a higher, and higher level of debt. The debt is so high now, that since 2008 we've been in what I call, debt deflation.
Nothing could be better for the economy than to get rid of fracking.
The companies aren't hiring, because consumers don't have enough money to buy the goods and services.
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.
Debtor countries may postpone the inevitable by borrowing from the IMF or U.S. Treasury to buy out bondholders. This saves the latter from taking a loss - leaving the debtor country with debts that are even harder to annul, because they are to foreign governments and international institutions.
The United States Government has fought against creation of an international court to adjudicate the ability of national economies to pay debts.
Oil is a special case. Saudi Arabia is trying to drive U.S. fracking rivals out of business, while also hurting Russia. This lowers gas prices for U.S. and Eurozone consumers, but not by enough to spur economic recovery.
The United States and Europe are in a state of debt deflation, where people and businesses have to pay banks instead of spending their income on goods and services. So markets shrink, sales and profits fall, and the stock market turns down.
Income is sucked upward to the creditors, who then foreclose on the assets of debtors. This shrinks tax revenue, forcing public budgets into deficit. And when governments are indebted, they becomemore subject to pressure to privatization of public enterprise.
If you end internet neutrality and permit mergers of the big information technology corporations, that's a form of rent seeking. It's part of today's political revolution.
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
The aim of academic trade theory is to tell students, "Look at the model, not at how nations actually develop." So of all the branches of economic theory, trade theory is the most wrongheaded.
Debtors will seek to cancel their debts. Creditors will try to collect, and the more they succeed, the more they will impoverish the economy.
People think that this concept of GDP is scientific economics, partly because it has a precise number and can be quantified. But the underlying concept of "the market" makes it appear as if today's poverty is natural. It makes it appear that Goldman Sachs and Donald Trump are job creators instead of job destroyers. That is illogical, when you think about it.
Today's national income statistics make it appear that Goldman Sachs is productive. As if Donald Trump plays a productive role. The aim is to make it appear that people who take money from the rest of the economy without working are productive, despite not really providing any service that actually contributes to GDP and economic growth.
Either you can save the economy, or you can save the One Percent from losing a single penny.
You have to abolish pension plans. You have to abolish social spending. You have to raise taxes. You have to have at least fifty percent of the European population emigrate, either to Russia or China. You would have to have mass starvation. Very simple. That's the price that the Eurozone thinks is well worth paying.
Small banks that lend to consumers are fine.
