Once in a century rip-off

TheRealNews asked:

More at www.therealnews.com Economist Michael Hudson: the bailout is a giveaway that will cause hyperinflation and dollar collapse

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25 thoughts on “Once in a century rip-off

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    I AGREE. We’re screwed. Trillions were stolen shifted via debt creation. Some evaporated.

    Credit was disguising de-industrialization and shutting down production, for a quick buck, credit -based M and As, garage sales, gambling.

    Hudson agrees we DO need liquidation, ie debt write-down, not propping up debt by transferring it to the govt.

    The other side is real production and consumption. I think some capital injection is needed so engine does not grind to a halt like IMF in Argentina.

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    I think, if consumers got more money than there might not be more real investment, they would have to pay off homes and past credit. Clean slate.

    This could then boost spending and work, not savings per se, less money going to interest.

    Hudson differentiates between investment in actual productive capital, like equipment and business processes where people work and produce things, vs. capital that consists of debt-based derivatives, betting on capital flows. and stuff like that.

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    Cory: allowing Americans to bid up real estate prices

    Yes, beyond sanity, not slow inflation, doubling total asset price in 6-7 years.

    Banks encouraged that, and foreign and American investors not only bought stocks, bonds, and commodities, but also mortgaqe-backed securities, CDOs backed by CDSs. This was a boom market .. for a while. Those who knew how (or knew who) extracted wealth and got out.

    Dope dealers say the same, make some money and get out before you get hot and go to jail.

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    Cory: So rising stock prices, rising real estate prices, rising commodity prices are all a result of the inflation that the Fed has been creating.
    Correct. As policy, since Reaganomics.
    First Paul Volker pushed interest rates to double digit, I forget 18% or higher, to halt inflation caused I think by ending Bretton Woods and Vietnam spending.

    Then Greenspan came in and started doing what you describe. Greenspan recently said the Fed does not answer to Congress, nor President.

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    I agree with what you are saying, for the most part.
    Leverage was fake money, etc.
    Mortgage market is the US engine, not production.

    Consumers were encouraged to re-fi, take money out of what YOU OWN, and spend it on stuff. Keep up patriotic shopping.

    I know about LTCM. I agree.

    Hudson explains that “foreign savings glut” is really Central Banks (China) getting dollars dumped on them, they have no practical choice but to recycle into T-bills and mortgage securities. only 500 char!

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    What was the leverage based on? MBSs?

    Cory, banks did 30x and 40x leverage on MBSs. Some specs said to ultimately hit 70x hard assets or higher. That is insane.

    Michael Hudson explains why “foreign savings glut” is a LIE.
    Insane Debt-based military spending recycled or “sunk” into Real Estate. Sry 500 chr.

    BIS estimates $1400 TRILLION (yes) in total Derivatives. Consumers did not spend $1400 T. Our total GDP is only $13.5 T.

    Some consumers bought inflated houses. Other factors.

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    I pointed out, by 2008, US debt was $42T, up from $4T in 1980.
    Consumer debt is only $1T.
    This means we have $41Trillion in debt that has nothing to do with consumer purchases.

    What is it from?

    Banks borrowed it all to make LEVERAGED purchases of DERIVATIVES which are already LEVERAGED instruments.

    Actual capital — machines, production lines, materials, products — is all miniscule compared to derivatives which only exist in “virtual reality”.

    Govt protects virtual wealth now.

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    They don’t stand up to government price-fixing of interest rates and money printing.

    GAO says: the Fed simply cannot be audited by Congress. Or by anyone else, for that matter. They are PRIVATE.

    Rep. Grayson asked Fed vice chairman Kohn where all the money went. He would not answer.

    Alan Greenspan told PBS that nobody has authority over Fed. Fed can create unlimited money to buy Securities from JP Morgan and Citigrp, and NO ONE has authority to contradict Fed decisions.

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    corymd3470: rich people are the only people driving future investment

    Rich ppl are NOT driving investmt. NOT in REAL GROWTH. They stripped tangible industrial assets. They put ZERO in real capital.

    Instead, they created mountains of fictional wealth made out of debt and land inflation. They have pieces of paper, contracts etc, with market value of — who the fk knows.

    Fed chief says they cannot value bank assets “marked to market” because the value is unknown. This is not wealth.

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    Mr. Lobotomy,
    You think big problem was consumers loans for mortgages. That was NOTHING!! Minutae. comprendo?

    Banks put mortgages in pools w corporate debts, car loans, etc. and then MULTIPLED VALUE and slashed risk, by computer algorithms.

    Then they called these debt pools “ASSETS” pledged as collateral for NEW LOANS to “invest” and lend.

    BANKS OVERLEVERAGED THEMSELVES for gambling. AIG pledged billions on paper, held only 2% reserve. Experts LIED and CHEATED each other.

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    ps and not borrowing in terms of credit (not mordgage) of more than 1/6 of last year`s earnings was my proposition to make one of many steps to fuckin fix it, but it seams that you cant read and understand a sentence longer than three words.

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    you call me an idiot again and you will eat your balls for brakfast you retarded cuntt, Its not the banks you moron but mainly people that dont treat their houses as homes but as investments, the rising of house or land prices in not due to `pushing up` prices but becouse that house of plot was sold over and over again and mr lawyer got hiz share everytime just like mr property saleman and banker all took comision on the same thing 10 or so times for past 10 or so years. simple./

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    Michael Hudson’s articles are NOT about blaming the rich. It’s about the abandonment of solid CLASSICAL ECONOMICS concepts of Mills and Smith, replaced w “neoliberal” bulloney and financialization.

    It’s about rentiers SIPHONING wealth off the productive economy of labor and mfg, via unproductive land inflation, mineral monopolies, finance and insurance, intellectual patents on common knowledge. This makes living very expensive, but it saps industrial growth. He compares it to feudalism.

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    Idiots still think entire global financial meltdown is due to ppl w “bad credit”. It *is* a func of Fed and banks pushing UP land prices to ‘unaffordable’, and lucrative.

    Lending more than 1/6 to consumers? BANKS were lending at 40x reserves, on trash securities called AAA ‘collateral’. PIMCO called it a Ponzi scheme.

    In 1980, total US debt was $4 Trillion.
    By 2001, US debt was $21 T.
    By 2008, US debt was $42 T.
    How much of this was consumer debt? $1 Trillion. Do the math.

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    The problem is and was bad credit, you should not borrow more money to a private person than 1/6 of their yearly earnings In terms of credit cards. credit scoring system should be banned as it does not measure actual credit reliability but potential profitability for the bank. The biggest problem are the people spending what they cant afford and those that lend them. Kings for a day and fools for a lifetime.

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    All money is debt. If no one borrowed money from a bank there would be no money. It will always come to this. As soon as the debt stops growing you can’t pay off the debt because only the principle is in circulation. No debt no money.

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    “the fractional reserve system. In this system, inflation results when people BORROW.”

    People dont know about the money as debt racket thats a consequence of fractional res, its not in MSM, even economic classes do not analyse the consequences of Frac.R

    But also, decades ago 1 paycheck was enough to get a family the house, car, furniure, there has been an assault on working class earings(Outsourcing=McJobs) concealed by access to credit(more debt for the same standard), pre-GD inequality

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    So the answer is for those that managed to remain out of debt pay money to those who are in debt? Blaming rich or not, the point is, dont spend it. (companies/people/countries)


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