Unpayable Corporate Debt: A Brady Bond Solution for America’s Economic Crisis

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Even before the Covid-19 crisis had slashed stock prices nearly in half since it erupted in January, financial markets were in an inherently unstable condition. Years of quantitative easing had loaded so much money into stock and bond prices that stock price/earnings multiples and bond prices were far too high by any normal and reasonable historical standards. Risk premiums have disappeared, with only a few basis points separating U.S. Treasury bills and corporate bonds. The Fed’s Quantitative Easing since 2008 plus large companies using their earnings for stock buybacks drove the prices of financial assets into a realm of unreality. The result was that markets already were teetering on the brink of fragility. Any rise of normal interest to more normal conditions, or any external shock, was bound to crash the ...

Debt and Power

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https://www.youtube.com/watch?v=sJBi7sfTZuY&feature=youtu.be Transcript, recorded 20th Match 2020 Martin: Today Debt and Power. I’m Martin North from Digital Finance Analytics. Welcome to our latest post covering finance and property news with a distinctively Australian flavour. Today it is my pleasure to introduce Michael Hudson, American Economist, Professor of Economics and author of “Killing the Host” and “and Forgive Them Their Debts”. In the current environment I think those are great titles. Michael welcome. You have been following the economy and the question of debt for quite some time and I’d like to start the discussion with a simple question: How much debt is too much debt? Michael: Too much debt is when it's beyond the ability to be paid. At a certain point every debt grows beyond the ability to be paid because of the magic of ...

Corona Debt Jubilee

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Cross posted from the Washington Post. Michael Hudson, author of “… and forgive them their debts” and “Killing the Host,” is president of the Institute for the Study of Long-Term Economic Trends and is distinguished research professor of economics at the University of Missouri at Kansas City. Even before the novel coronavirus appeared, many American families were falling behind on student loans, auto loans, credit cards and other payments. America’s debt overhead was pricing its labor and industry out of world markets. A debt crisis was inevitable eventually, but covid-19 has made it immediate. Massive social distancing, with its accompanying job losses, stock dives and huge bailouts to corporations, raises the threat of a depression. But it doesn’t have to be this way. History offers us another alternative in such situations: a debt ...

Equilibrium Theory and Near East Economics

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An interview with acTVism Munich. Johnson Wang   Michael Hudson on the History of Debt Cancellation, Austerity in Europe, January 2020 Rees Jeannotte Hello and welcome. I'm Rees Jeannotte, and you are watching Know Your Stuff. Joining me today is economist and anthropologist Michael Hudson. He is a professor of economics at the University of Missouri, Kansas City, and an author of many books, including Killing the Host, J for Junk Economics, and his most recent “...and forgive them their debts”. Today, we'll be talking with him about his latest book ...and forgive them their debts, the eurozone crisis and the problem of ever-increasing rental and home ownership costs around the world. Professor Michael Hudson, thank you for joining us. Michael Hudson It’s good to be here. Rees Jeannotte How did ...

Democratizing Money – a discussion

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IMMR CoffeeHouse Discussion Forum # 8 Full Transcript (EDITED VERSION) Thurs. Dec. 19, 2019 Michael Hudson on how debt money has pushed the US and European economies to their financial limit. Followed by an open discussion forum. About the speaker: Michael Hudson is an economist and economic historian with a PhD from New York University. Dr. Hudson teaches at the University of Missouri–Kansas City and is associated with the Levy Economics Institute at Bard College. Dr. Hudson's main research focus is on debt, in all its variations and throughout history going as far back as Bronze Age Mesopotamia. Leading questions are how debt comes into being, when and how it creates economic and societal problems, and what measures have been adopted, or can be adopted, in order to deal with ...

Note to China

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My book “Super Imperialism” was about how the United States has gained a free lunch by establishing the dollar as international reserve currency by replacing gold. I also showed that the U.S. balance of payments deficit is almost entirely military related to support its 800 bases around the world. Ending the gold-exchange standard in 1971 created a situation in which the excess U.S. dollars thrown of by the U.S. payments deficit end up in foreign central banks. For these central banks, the inflow of surplus dollars poses the problem of what do we do with them. Central banks don't buy stocks and bonds, or control of corporations, because that is risky and also does not directly help their own economy. So central banks buy US Treasury bonds and bills – IOUs ...

Asset-Price Inflation and Rent Seeking

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A Total-Returns Profile of Economic Polarization in America Michael Hudson Based on work with Dirk Bezemer, with charts by Howard Reed Polarization in America, 23 September 2019 “More than half of all Americans feel pressure and strain, according to the April 2019 Global Emotions Report published by Gallup. Most (55%) Americans recall feeling stressed much of the day in 2018. That’s more than in all but three countries globally. Nearly half of Americans felt worried (45%) and more than a fifth (22%) felt angry. ‘Even as their economy roared, more Americas were stressed, angry and worried last year than they have been at many points during the last decade,’ Julie Ray, a Gallup editor, wrote in the summary report.” USA Today, April 26, 2019 “For me the relevant issue isn't what I report on the bottom ...

Break up the Dem Party

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Why we need to abolish the Democratic National Committee, even if that means breaking up the Democratic Party Thursday’s debate on Walt Disney’s ABC channel is shaping up as yet another shameless charade. The pretense is that we are to select who the Democratic presidential candidate will be. But most Americans, as the Irish say, vote with their backsides, belonging to the informal but dominant party of non-voters who choose not to be sucked into legitimizing the bad choices put before them. But the limited airing of their personalities reflects the fact that most Americans, as the Irish say, vote with their backsides, belonging to the informal but dominant party of non-voters who choose not to be sucked into legitimizing the bad choices put before them. The debate is being presented as ...

Charge us More

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Trump's claim that China is paying for the tariffs is completely false and basically serves to redirect income from his poor supporters to his wealthy supporters. Not only that, the policy will have the consequence of further isolating the United States, says Michael Hudson. unsplash-logoPang Yuhao

Global Warming and U.S. National Security Diplomacy

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Control of oil has long been a key aim of U.S. foreign policy. The Paris climate agreements and any other Green programs to reduce the pace of global warming are viewed as threatening the aim of dominating world energy markets by keeping economies dependent on oil under U.S. control. Also blocking U.S. willingness to help stem global warming is the oil industry’s economic and hence political power. Its product is not only energy but also global warming, along with plastic pollution. This fatal combination of the national security state’s mentality and oil industry lobbying threatens to destroy the planet’s climate. The prospect of raising temperatures and sea levels along the coasts while inland regions suffer drought is viewed simply as collateral damage to the geopolitics of oil. The State Department is ...