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Ben Norton, Inflation and banking 2022 Economist Michael Hudson discusses the global inflation crisis and how the US Federal Reserve quietly (and apparently illegally) bailed out big banks in 2019 with \$4.5 trillion of emergency repo oans Reproduced with the permission of Michael Hudson.

I interviewed economist Michael Hudson to discuss what is causing the global inflation crisis, and also how the US Federal Reserve quietly bailed out big banks in September 2019 with \$4.5 trillion of emergency repo loans that appear to have blatantly violated the law.

TRANSCRIPT

BENJAMIN NORTON: Hey, everyone. This is Ben Norton, and I’m joined by a friend of the show, one of our favorite guests, Michael Hudson, the economist. His reputation precedes him; many of you probably know him. You can go to and check out his excellent articles and his books.

We had him on a few months ago to talk about the new, third edition of his book Super Imperialism: The Economic Strategy of American Empire. And today we’re going to talk about the inflation crisis around the world.

In the US in 2021, there was inflation around 7%, and this has led to a lot of discussion about what is causing the inflation, why there’s inflation.

Professor Hudson has pointed out for many years that inflation in the US and other countries is often measured in a very strange way that doesn’t include housing prices, and it doesn’t include what he calls the FIRE sector: finance, insurance and real estate.

So today we’ll talk about the rising rates of inflation and what corporate media outlets are missing about the story.

But before we begin talking about that, Professor Hudson, another reason I wanted to have you today is to talk about a big story that went viral. It was just published, and it’s on the website Wall Street on Parade. It went so viral that the website actually went down, because it was being shared so much.

This is an article just published at Wall Street on Parade. I have it up in the archive because the website is down. And the article is titled, There’s a News Blackout on the Fed’s Naming of the Banks that Got Its Emergency Repo Loans; Some Journalists Appear to Be Under Gag Orders. And this is by Pam Martens and Russ Martens, published on January 3.

I’ll just briefly summarize the main point, and then I want to get your response, because I think this is obviously part of the discussion around the inflation crisis.

“The Federal Reserve released the names of the banks that had received \$4.5 trillion” – that is trillion with a T – “in cumulative loans in the last quarter of 2019 under its emergency repo loan operations for a liquidity crisis that has yet to be credibly explained.”

So Professor Hudson, I’ll ask you in a second to explain what that liquidity crisis was. And they point out that, among the borrowers that received \$4.5 trillion in loans from the Fed were JPMorgan Chase, Goldman Sachs, and Citigroup, “three of the Wall Street banks that were at the center of the subprime and derivatives crisis in 2008 that brought down the U.S. economy.”

“That’s blockbuster news. But as of 7 a.m. this morning (January 3), not one major business media outlet has reported the details of the Fed’s big reveal.” And they suspect there are some journalists under gag orders.

And then the other point to add here is that this borrowing was happening in September 2019, and it was actually before the first case of Covid was identified in the United States. They point out that the first Covid case was reported in the U.S. in January, and then the World Health Organization declared a pandemic in March 2020. This massive borrowing spree of \$4.5 trillion was happening in September.

So there are a few things you can respond to Professor Hudson. Maybe we can start with, why was the Fed giving trillions of dollars to these large Wall Street banks. And why was there a liquidity crisis? That’s unexplained.

Why did the Fed refuse to release the names of these banks? And was there a financial crisis before Covid that the U.S. government later was able to blame on Covid, but it was actually a financial crisis in the making?

MICHAEL HUDSON: There was actually no liquidity crisis whatsoever. And Pam Martens is very clear about that. She points out the reason that the regular newspapers don’t report it is the loans violated every element of the Dodd-Frank laws that were supposed to prevent the Fed from making loans to particular banks that were not part of a liquidity crisis.

In her article, she makes very clear by pointing out these three banks, Chase Manhattan, Goldman Sachs – which used to be a brokerage firm – and Citibank, that the Federal Reserve laws and the Dodd-Frank Act explicitly prevent the Fed from making loans to particular banks.

It can only make loans if there’s a general liquidity crisis. And we know that there wasn’t at that time, because she lists the banks that borrowed money, and there were very few of them.

There were the big three that she mentions. There was also Nomura, that got one-third of the loans in that order that were taken out. I think, on balance, the repo loans were like \$20 billion and Nomura got \$10 billion of them. And Cantor Fitzgerald was also in there.

Well, what happened, apparently, was that while the Dodd-Frank Act was being rewritten by the Congress, Janet Yellen changed the wording around and she said, “Well, how do we define a general liquidity crisis?” Well, it doesn’t mean what you and I mean by a liquidity crisis, meaning the whole economy is illiquid.

She said, “If five banks need to borrow, then it’s a general liquidity crisis.” Well, the problem, as she points out, is it’s the same three big banks, again and again, and again and again.

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And these are not short-term loans. She points out that they were 14-day loans; there were longer loans. And they were rolled over, not overnight loans, not day-to-day loans, not even week-to-week loans. But month after month, the Fed was pumping money into JP Morgan and Citibank and Goldman.

But then she points out that, or at least she told me, that these really weren’t Citibank and Morgan Chase; it was to their trading affiliates. Now this is exactly what Dodd-Frank was supposed to prevent.

Dodd-Frank was supposed to protect the depository institutions by trying to go a little bit to restore the Glass-Steagall Act that Clinton and the Obama thugs that came in to the Obama administration all got rid of.

It was supposed to say, “OK, we’re not going to let banks having their trading facilities, the gambling facilities, on derivatives and just placing bets on the financial markets – we’re not supposed to help the banks out of these problems at all.”

So I think the reason that the newspapers are going quiet on this is the Fed broke the law. And it wants to continue breaking the law.

And that’s why these Wall Street banks fought so hard to get the current head of the Fed reappointed, [Jerome] Powell, because they know that he’s going to do what [Timothy] Geithner did under the Obama administration. He’s loyal to the New York City banks, and he’s willing to sacrifice the economy to help the banks.

Because those are the clients of the New York Fed, the big New York banks. And that’s been the case ever since I was on Wall Street half a [century] ago.

And Pam [Martens] is trying to expose how these banks are crooked, and really what the whole problem was. She points out that the Fed is supposed to make short-term loans, but these are long-term loans.

And the banks are not structurally insolvent. Without them, they would have lost money. The FDIC could have come in and taken them over. And the depositors, the insured depositors, would have been OK, which is just exactly what Sheila Bair, who was head of the Federal Deposit Insurance Corporation, wanted to do under Obama, when she was blocked by Geithner.

She sat with Geithner and Obama, and he said, “Look, I’m backed by the banks; forget the voters. Banks are my campaign contributors.” And he bailed out the banks and sacrificed, pushed the whole economy into what is now a 12-year recession basically, that is not improving at all.

So what is happening now is part of the whole quantitative easing bit that has really been a disaster. And the crisis is the Fed is flooding the financial markets with credit in order to increase real estate prices, to increase mortgage lending, to enable the banks and the 1%, that own the private capital funds and the insurance companies and the banks, to continue making money.

And the reason that that these three banks were bailed out was they had made bad bets against, apparently, insurance companies, and foreign banks. Apparently MetLife, and Prudential, and other insurance companies made bets as to which way the stock market would go, and they won and Chase lost, Citibank lost, and Goldman Sachs lost.

And somebody else must have lost because in September of 2019, when all this was occurring, the overnight rate went up to 10%. Well, that means that someone had really made a bad bet and was technically on paper insolvent, and that nobody would lend to them.

For 10% overnight money, that means that nobody’s going to lend to you. Everybody knows that you’re insolvent. And that was all hushed up at the time. Not a word of it in the paper.

And this is such a touchy subject that, if the banks would begin to – if the newspapers and the media would begin to get into the explanation of how all this developed, that would sort of counter the whole Fed’s strategy, and the whole Democratic Party strategy, which is to support Wall Street, not the economy at large.

BENJAMIN NORTON: And Professor Hudson, what you’re getting at here is that, these banks were engaged in very risky behavior. And essentially all of the indications appear to be that they kind of unleashed a financial crisis in late 2019.

And then with the pandemic, they could conveniently blame it in the pandemic. I’m not saying – obviously, they didn’t cause the pandemic. But I’m saying that it was actually, in some ways, it was actually a savior for them, a life saver, because then they could say, “Oh, well, we didn’t cause a financial crash; it was the pandemic.”

But we actually see signs that, in late 2019, before Covid even arrived in the United States – well, there’s even discussion about that, but before the first official case of Covid was identified in the United States – there was already a financial crisis, apparently, and the Fed was just trying to cover it up.

MICHAEL HUDSON: Well, the problem is that the Fed made sure that it didn’t have to release any of this data for two years, on the theory that after two years, nobody can remember what’s happening and it doesn’t matter anymore; it’s yesterday’s news.

And so the material only just came out now. We’re always going to be two years behind. And if you’re two years behind, then the thieves are going to have plenty of time to cover up what they’ve done, borrow even more money, and it’ll be too late to do anything.

The whole idea is not to make the Fed transparent, to make a wall of secrecy around the Fed, so that it can do with its pet banks, and bail out the banks that most Americans don’t think should have been bailed out by Mr. Obama in 2009, and certainly don’t think that they should be bailed out now, as long as the depositors and the regular companies in the real economy is kept safe.

But the Fed isn’t saving the real economy. It’s saving the gamblers.

BENJAMIN NORTON: And Professor Hudson, there’s an incredible line, an incredible paragraph in this article that I want to get up here, that says a lot about not just the US economic system, but also the media.

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The  last paragraph of this piece : “Why might such an outcome be a problem for media outlets in New York City? Three of the serially charged banks (JPMorgan Chase, Goldman Sachs and Citigroup) are actually owners of the New York Fed – the regional Fed bank that played the major role in doling out the bailout money in 2008, and again in 2019. The New York Fed and its unlimited ability to electronically print money, are a boon to the New York City economy, which is a boon to advertising revenue at the big New York City-based media outlets.”

I didn’t know – it’s pretty incredible. I knew that, obviously, the Fed is this kind of public-private, complex – whether or not it’s public or private, I know that people say it’s neither and both. So it’s confusing. Maybe you could explain that.

But I didn’t know that JPMorgan Chase, Goldman Sachs, and Citigroup are owners of the New York Fed.

MICHAEL HUDSON: Well, technically the Fed stock – all the banks have to own Federal Reserve stock; so it doesn’t matter that they’re owners. The ownership isn’t all that important for the Fed. Because the Fed is really a government organization. But the problem is that Wall Street has taken over the government.

And it has taken over the Fed not through its ownership; it doesn’t have shares to vote as to who is going to be the head. The heads are appointed in Washington; they’re appointed by Congress.

I talked to Pam [Martens] about that and she said because her site was so overloaded, she couldn’t get on it to write more last night, when it was up. And she has other theories.

I thought that it’s the tail wagging the dog to say, well, look, it’s about advertising. The banks don’t do that much advertising, and nobody is going to kill a whole big story like this for the ads.

And so, when we talked, she said she thinks part of the problem is margin loans. I mean, there are all sorts of problems that could have happened there.

And the banks have been, again, operating if not illegally, then, let’s say, stretching the envelope, by pretending that what really are margin loans to help people buy stock are really disguised, or somehow their lawyers have drawn up these contracts as derivatives contracts.

And a derivative you can lend 50% against, instead of just 15% for margin loans. So the banks actually have been working around the whole spirit of the law to make much larger loans than they should have.

And when the stock market, as you have been watching, back then is doing what it’s doing today; it’s zigzagging, up and down, and up and down in a zigzag. That’s how you make money: Push it up, computerized buying; push it down, computerized selling.

And one part of it was other banks venturing not only into derivatives but into the margin loans.

I don’t think the ownership can control management. It’s not that Citibank and Chase can say, “Well, we own the majority stock in the Fed, so we’re just going to appoint one of our own guys as manager.”

They don’t have to. They’ll give money to the Biden administration, and Biden will appoint their people.

So the Fed is really controlled by the government, and all you have to do is give a campaign contribution to the government, and you get whatever you want.

And I think Pam [Martens] would agree with that analysis. So that really should be the emphasis, not the banks, not that the New York Times is after more advertising money from Chase.

I think there is more bank advertising on television than there is in the newspapers.

And also, I think the the older reporters that used to know how to read a financial balance sheet, they’re all retired or they’re not working anymore.

Or if they get too close, too embarrassing, and write columns like Pam [Martens] does, all of a sudden, they’re not working for the same organization anymore.

So I think people just don’t understand what a repo is, how it’s connected to the money supply – and it isn’t – how it’s connected to quantitative easing. There is just a general economic illiteracy

Because if you get an economics degree in academia, they don’t talk about money, or debt, or credit. None of this appears. None of this is in your money in banking course. It’s all sort of a Mickey Mouse.

Walt Disney Happy World, where nothing like this occurs.

And so how is a reporter going to know how to do the research that Pam goes into year after year? Taking apart all these balance sheets and doing all the analysis you have to do to net out what’s actually happening from the whey.

When IBM was fighting an antitrust suit – this must have been 50 years ago – and the government wanted some information from it, IBM through, “We’ve got to give the government information. What are we going to do?”

So it gave two huge storerooms of hard printout of information that would have taken five years to go through.

Well that’s what the Fed did with these statistics. It gave such a mass of information that you had – it was like looking for a needle in a haystack in order to find it.

And as newspapers have been run more like profit-making companies, they have cut the costs. They don’t have the time to do the research to find the needle in the haystack.

And since Pam [Martens] doesn’t work for a newspaper that’s under that cost constraint, she knows just what she’s looking for and goes right to it.

BENJAMIN NORTON: And Professor Hudson, let’s talk about the inflation crisis and if this is related to it.

We we had you on in early 2020 to talk about the CARES Act, and the so-called bailout, that was, as you said, basically a multi-trillion-dollar giveaway to the financial sector.

And I believe that’s an addition to the \$4.5 billion in the repo loans that we’re talking about.

MICHAEL HUDSON: Yeah, that wasn’t the Federal Reserve; that was Treasury spending, not the Federal Reserve. They’re completely separate.

BENJAMIN NORTON: Exactly. So we’re talking about over \$10 trillion, between the two, over \$10 trillion that went to the financial sector in the span of less than a year, in six months or so, from late 2019 to early 2020.

Do you think that that is one of the main reasons for the inflation?

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I want to preface by saying that a point that you often stress, which I think is important to keep in mind, is that, the way inflation is measured frequently, at least in the United States, is that it doesn’t include things like the housing sector.

And you have often pointed out for years that there has been a lot of inflation over the past several years in the FIRE sector. And real estate prices are a clear example of that. But that’s not considered the consumer price index.

So go ahead.

MICHAEL HUDSON: It actually is included, but in a very moderate way, modest way. I’ve looked at the Fed statistics on rent as a portion of income and mortgage payments as a portion of income. And in the last 30 years, there’s been zero change, according to these statistics. Absolutely flat.

So they decided what the percentage was; they haven’t changed it at all. The consumer price index doesn’t recognize the increase in either rental costs or mortgage costs as housing prices have risen. So they’re under-reported.

But more important, people have had to change what they’re eating and what they’re buying.

But it’s certain, the money that the Fed gave to individual families under the CARES Act, almost all of that was used to pay down debt.

Because the way the Treasury made the payments was to credit either their credit cards or their bank accounts. And that most Americans are overdrawn on their bank accounts, or they owe money on their credit cards.

And the money went right out of their hands to reduce the volume of debt they had. And essentially, it was a debt repayment to the bank.

That was what happened to most of the CARES Act. It wasn’t spent on goods and services, and so it wasn’t inflationary. Just the opposite.

So there are a number of reasons why prices have gone up.

The big reason is, if you look at the prices that have gone up, they’re monopoly prices. The monopolies have been able to charge more because they’re monopolies, and because there’s less and less competition, and because the government is not really enforcing anti-monopoly legislation.

President Biden is trying to increase that now, but it’s going to take a little while before the prosecution of monopolies and talk of break-ups really concludes.

Also there are a lot of bottlenecks in transportation, as you’ve heard. There are two kinds of bottlenecks: One, you’ve heard about the port in Los Angeles, over the ships. The shipping costs have tripled from Asia to the United States.

The ships are unable to unload because the ports are not organized as ports. Particular companies own the trucks; other companies own the containers; other companies own the ships.

And there is no way to reconcile them to get the containers that are offloaded from the ships once they’re emptied out, there’s no way to get them back. You have to get them back to particular terminals, and it’s not designed by anybody who is competently put there.

The one benefit to the whole economy of all this is that it means that there’s no chance that the secretary of transportation, Mayor Pete [Buttigieg], can ever show his face in public again. But that’s sort of a minor gain.

The other fact is that in companies, there’s a new management philosophy that’s come in, maybe about 15 years ago, and that’s called just-in-time inventory.

In other words, the idea is, you want to cut – the less you spend on inventories, the more money you have to pay out as dividends to your stockholders.

If you don’t have to spend money on inventories, then your profit rates go up, and you can pay more.

And so companies say, “Let’s operate with almost no inventories at all. That way, we’ll have a little bit more money to push up the stock price.” And if you’re the CEO, you get your bonus paid on the stock price.

Well, the problem is that the purpose of inventories is to prevent zigzags in prices, when there are shortages. If there is a supply problem, well, you have enough inventories on hand so that you are not going to have a crisis.

That’s why the United States has a national inventory of oil, and fuels, and national reserves of things that the government and the economy needs.

But Walmart, and other stores, and distributor retail stores don’t operate in the same way for the economy. They’re after profits. So they didn’t have any inventories.

So a little bit of a shortage all of a sudden caused a massive scramble to try to get enough goods to sell to people. And so it’s that just-in-time budgeting.

And also, of course, there are labor shortages from Covid. People are finally beginning to get almost half of the minimum wage; some people are almost able to earn the minimum wage now.

Where there is a real labor shortage, in New York City, the transport authority said it’s paying its workers an extra \$35,000 to retirees, if they’ll sign on for three months to get over the current shortage.

So a little bit is, finally, the class war against labor is alleviated because of the crisis. So those are the real reasons of inflation.

It’s not a monetary inflation, except for the financial inflation of housing prices, and the fact that it has created so many multi-billionaires by the Fed’s quantitative easing, that they’ve all created private capital buyout funds, and they’re buying up all the housing and outfitting the owner occupants that want to buy housing, to take over the housing, turn it into rental housing, and charge cutthroat rents to the economy.

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BENJAMIN NORTON: Yeah, it’s pretty interesting, Professor Hudson, because if you listen to Fox News, or a lot of right-wing analysis, they say that the problem behind the inflation is that the Biden administration is just spending so much money, and he’s a socialist, and he’s funding all of these programs, and Build Back Better.

And it’s hilarious because, meanwhile, his own party won’t even approve the watered down version of Build Back Better, which is like every few weeks there’s a trillion dollars less, and then less spending, and less spending.

So it’s pretty funny considering that his own party is preventing social spending, and then Republicans are claiming that he’s doing all this social spending, which is creating inflation.

I want to point out a graph, an analysis that was done by this really good analyst named  Stephen Semler; he’s got a good Substack where he focuses on the Military-Industrial Complex.

And he did this study here called “Biden over-delivered on military spending and under-delivered on social spending.” And here this graph really visualizes the disparity, where Biden, when he campaigned, he pledged \$700 billion for human and physical infrastructure and has only delivered \$55 billion, a tiny fraction.

And he campaigned pledging \$741 billion for the Pentagon and just delivered a \$778 billion dollar military budget.

So while the right wing is freaking out and claiming that Biden is a socialist, spending all this money on social programs, in fact that money is going toward increasing the military budget, and not going to social programs. I don’t know if you wanted to comment on that.

MICHAEL HUDSON: Sure, I think that Schumer has a great influence over the Republican Party, and I think Schumer and Pelosi meet with their counterparts at the Republicans and say, “Please call us a socialist. We’re not going to disagree with you.” Because they know that 85% of Americans like the word socialism.

And the more that Republicans call them socialist, that helps them solidify the base that really wants socialism, so that the Democratic Party can throw cold water on that and prevent socialism.

It’s a great scam.

BENJAMIN NORTON: That’s an interesting point; it’s an interesting idea.

MICHAEL HUDSON: But actually, the Biden administration, they haven’t spend money into the economy. Spending money into the FIRE sector – the finance, insurance, and real estate sector – isn’t spending money into the economy; it’s spending money into the overhead that is preventing the economy from growing. Just the opposite.

And to be fair to Biden, he hasn’t followed through on any of his other campaign promises, either. He hasn’t cut back student debt like he promised. He hasn’t raised the minimum wage like he promised.

So it would be unfair to single out just the infrastructure. He has universally repudiated every campaign promise that he made, because his clientele are the campaign contributors, not the voters.

BENJAMIN NORTON: Yeah, excellent point. He also, according to a recent study just published yesterday, on January 3, he also has increased deportation of immigrant children by 30% compared to Trump. He didn’t end the war in Yemen; has continued selling weapons to Saudi Arabia.

Professor Hudson, you mentioned something important, that is quantitative easing. For those of us who are not economics experts. Can you explain what quantitative easing is?

I just want to get this graph here. So before doing this interview, I wanted to listen to what kind of mainstream business news outlets were saying. This is a graph from Yahoo Finance. And they were talking all about the Fed interest rate, and they said that the Fed is planning on increasing the interest rate three different times this year, potentially.

And you can see a graph here of close to zero interest from around 2008 until really 2020 or so.

So it does look like it might be slightly increasing interest rates, but do you think that’s smoke and mirrors, or do you think that’s actually a significant factor?

MICHAEL HUDSON: Quantitative easing is a significant factor because it has been a huge subsidy to the financial sector. It’s a bad term. It was supposed to be – what quantity is easing? Not the money supply, because all this is occurring on the Fed’s balance sheet.

It means that the Fed is letting banks pledge their junk mortgages, their bonds, and their stocks in exchange for Federal Reserve deposits that they can use to increase their lending base. And the official original reason in 2009 was the Fed said, we’ve got to have higher housing prices.

Americans are only spending maybe 35% of their rent of their income on rent and housing. We’ve got to increase that to 43%. So if we can lower the interest rates, people can take out larger and larger mortgages, and there will be a huge flood of lending into the mortgage market, and Americans will have to pay more for their housing. And that will make the banks richer, the insurance companies richer, and our clients in the financial sector richer.

So quantitative easing was designed to increase the price of housing to Americans, and then it was to create a huge stock market boom.

And the banks had lost so much money through their junk mortgage lending and their insurance, their plain fraudulent loans, as Bill Black has pointed out at University of Missouri at Kansas City, that they said, “We’ve got to have the banks make back the trillions of dollars they’ve lost. And so we’re going to have quantitative easing to give them enough money to gamble with, that they can make money at the expense of the public at large, and the pension funds, and other people.”

So quantitative easing was part of the war of the financial sector against the economy at large.

And it just provides a lot of credit. If you have interest rates at 0.1%, then you can buy stocks that are yielding 5% or 7% or 10%, or you can borrow at 0.1% and buy a junk bond. And junk bond rates went down from about 15%, down to maybe 5% today. It’s all arbitrage.

People are borrowing low from the Fed and from the banks that borrow from the Fed to essentially buy higher yielding securities. And this is this is what has pushed up the stock market.

It’s not going up because the economy is getting better. It’s going up because the Fed has been inflated.

The Fed’s aim is inflation. But it doesn’t want to inflate the economy, real prices, it wants to inflate stock and bond and real estate prices, for the 1%. So essentially, this is part of the war of the 1% against the 99%.

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They’ve got almost all the growth in wealth since the pandemic began. There has been about, I think, \$1 trillion growth, more than that, in the private wealth.
All of this wealth that has been created has been basically taken by the 1%, who have made it financially, through financial capital gains, rising prices for their stocks, bonds, and real estate, not by the economy at large.

The economy at large, the 99%, have had to go further and further into debt during the pandemic. And once the moratorium on rent and mortgage payments expires in a month or so, there is going to be a huge wave of evictions, not only of renters, but even of homeowners that couldn’t afford to make their mortgage payments. And there’s going to be just a huge explosion.

Well, the Fed’s job in an election year is always to help re-elect the president. Whether it’s a Republican president or a Democratic president, it doesn’t matter because they’re basically the same party, but it’s always to re-elect the sitting president.

And so the Fed is not going to raise interest rates this year because once the Fed raises interest rates, then people are not going to borrow to buy stocks and bonds anymore. If they can’t make an arbitrage speculative gain by borrowing at 1% to buy a stock yielding 5%, they’ll sell the stock.

And if they sell the stock, it’ll go down. And at a certain point, the Fed is running a pump and dump operation, and we’re going to get to the pump stage, quantitative easing, to the dump stage, when the insiders will say, “OK, time to raise interest rates Fed. Let’s raise them now.”

They’ll sell out and the market will plunge, and people will say, “Nobody could have foreseen this.”

BENJAMIN NORTON: Yeah, Professor Hudson, the kind of conventional bourgeois economics wisdom, if you’re just reading the business press, is that when there’s high inflation, the Fed should increase interest rates.

And my understanding, at least according to reading the kind of conventional business press, is that the reason the Fed, at least the reason they claim, that the Fed reduced interest rates so low after the crash of 2008 was to help the economy grow.

You can see the graph here showing the Fed interest rate, and it’s been pretty static, at close to 0%, really until the pandemic, and its slightly increased.
But still even compared to the 1990s, when the interest rate was around 5 or 6%, or in the 1980s when the interest rate fluctuated, but was almost as high as 20%.

I mean, even though the Fed has slightly increased interest rates recently, or it’s still talking about a fraction of 1%. It’s nothing compared to what the interest rates have been in the in the 1980s.

So why is why is it? I mean, I think it’s pretty clear, given the answer you just said, but maybe you can further expand.

What is the excuse they’re giving for not increasing interest rates further, if they want to supposedly combat inflation?

MICHAEL HUDSON: They don’t have an excuse. They have a pretense. They have a cover story. And the cover story is trickle-down economics: We’ve just made enormous billions, trillions of dollars for the 1%, and it’s all going to trickle down. None of this has been spent into the economy, and they say, “We don’t have to spend it in the economy.” The Treasury doesn’t need Biden’s Build Back Better plan.

All we need is to make more stock market gains and the 1%, maybe say the 10% of the population that owns most of the stocks, now they’ll have enough money to buy more Andy Warhol etchings, and rare art, and expensive wines, and things like that, and it’ll all trickle down.

That’s not really an excuse; it’s so unrealistic; it’s parallel universe talking. But that’s the cover story. And it’s backed by everything that economics students are taught when they get an economics degree in the university.

So who’s to puncture their balloon and say, “Wait a minute, here’s what’s really happening”? Well, you know your show; you have Pam Martins’; you have a couple of other sites.

But the economy is living in a dream world, and propaganda is the name of the game.

BENJAMIN NORTON: Professor Hudson, let’s switch topics a bit here. I want to talk about an issue that we frequently address with you, I think it’s very important, and that is de-dollarization.

This is an interesting article that was just published in Nikkei, which is a Japanese website focused on business. This is Nikkei Asia.
And they have this article just published December 29, Central banks accelerate shift from dollar to gold worldwide : ”They say “holdings rose to a 31-year high in 2021.”

The dictatorship of the US dollar is weakening: “Central banks around the world are increasing the gold they hold in foreign exchange reserves” Central banks have built up gold reserves by 4,500 tons over the past decade, to the highest level since 1990.

Let me summarize a few of the main points here. They say, “Central banks around the world are increasing the gold they hold in foreign exchange reserves, bringing the total to a 31-year high in 2021.” And they “have built up their gold reserves by more than 4,500 tons over the past decade.”

As of this September, this past September 2021, the reserves totaled 36,000 tons, the largest since 1990, and up 15% from a decade earlier.

So why do you think central banks are are shifting to gold?

MICHAEL HUDSON: They’re protecting themselves against US political aggression. The big story last year was – if a country keeps its reserves and US dollars, that means they’re holding US Treasury securities. The US Treasury can simply say, “We’re not going to pay you.”

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And even when a country like Venezuela tried to protect itself by holding its money in gold, where is it going to hold it? It held it at the Bank of England. And the Bank of England said, “Well, we’ve just been told by the White House that that they’ve elected a new president of Venezuela, Mr. Guaidó. And we don’t recognize the president that the Venezuelans elect, because Venezuela is not part of the US orbit.”

So they grabbed all of Venezuela’s gold and gave it to the basically fascist opposition, to the ultra right-winger. The Americans say, “We’re going to recognize an opposition leader; we’re going to pick him out of thin air and take all the money away from Venezuela.”

Countries all over, from Russia to China to the Third World, think the United States is going to just grab our money, any time at all. The dollar is a hot potato, because the US, basically, it looks like, is prepping for war over the Ukraine; it’s prepping for war with Russia; it’s prepping for war with China.

It has declared war on almost the entire world that does not agree to follow the policies that the State Department and the military dictate to it.

So other countries are just scared, absolutely scared of what the United States is doing. Of course, they’re getting rid of dollars.

The United States said, “Well, you know, if we don’t like what Russia does, we’re going to cut off the banking contact with the SWIFT, the interbank money transfer system.” So if you do hold your money in dollars, you can’t get it.

I guess the classic example is with Iran. When the Shah was overthrown. Iran’s bank was Chase Manhattan Bank, which I was working for, as a balance-of-payments analyst.

And Iran had foreign debt that it paid promptly every three months, and so it sent a note to the bank, “Please pay our bondholders.” And Chase got a note from the State Department saying, “Don’t do what Iran wants; don’t pay.”

So Chase just sat on the money. It didn’t pay the bondholders. The US government and the IMF declared Iran in default of paying, even though it had all the money to pay the bondholders.

And all of a sudden, they said now Iran owes the entire balance that’s due, on the theory that if you miss one payment, then you default, and we’re going to make Iran do what the Fed didn’t make Chase Manhattan, and Citibank, and Goldman Sachs do. They couldn’t pay and transfer, but they weren’t pushed under bankruptcy.

So by holding your money in the US bank, the US bank does whatever the government tells it to, and it can drive any country bankrupt at any point.

If other countries pass a tariff against US goods that the US doesn’t like, it can just essentially not pay them on whatever they hold in the United States, whether they hold reserves in American banks, or whether they hold reserves in the Treasury or the Fed, the United States can just grab their money.

And so the United States has broken every rule in the financial book, and it’s a renegade; it’s a pirate.

And other countries are freeing themselves from piracy by saying, “The dollar is a hot potato. There is no way that we can believe them. You can’t make a contract with the American government.”

Ever since the Native Americans tried to make land contracts in the 19th century with them, the United States doesn’t pay any attention to the contracts signed. And President Putin says it’s “not agreement capable.”

So how can you make a financial arrangement with a country whose banks and State Department and financial department are not agreement capable? They’re bailing out.

And what’s the alternative? Well, the only alternative is to hold each other’s currencies, and to do something that, for the last 2,000 years, the world has liked gold and silver, and so they’re putting their money into gold because it’s an asset that doesn’t have a liability behind it.

It’s an asset that, if you’re holding it, not England, not the New York Fed – the German government has told the New York Fed, “Send us back to the gold that we have on deposit there for safekeeping. It’s not safekeeping anymore.

Planeload after planeload of gold is being flown back to Germany from the U.S., because even Germany – satellite as it is – is afraid that the United States may not like something Germany does, like if Germany imports gas from Russia, will America just grab all its gold and say, “You can’t have it anymore; we’re fining you.”

The United States has become lawless. And so of course you can’t trust it; it’s like a wild cat bank in the the 19th century.

BENJAMIN NORTON: And Professor Hudson, something that you’ve talked about in our various interviews with you over the past few years, which proved to be very prescient, is that China and Russia were in the process of trying to develop a new financial architecture to get around the U.S.-controlled financial system.

And they have officially announced that publicly. Anyone who follows our show would have known that a few years ago, because you have been pointing this out for well over a year now.

But this is an article that was published this December in the Global Times, which is owned by the People’s Daily, so it’s very close to the Communist Party of China, and it represents the perspective of a certain wing of the Communist Party of China.

And the article is titled “China and Russia to establish independent financial systems<.” And they also quote Russian media; it was reported in RT as well.

Russia and China are developing an alternative to the US-controlled global financial system, to weaken US sanctions This will “deter the threat of the US government’s long-arm jurisdiction based on the US dollar-denominated international payment network.”

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And very briefly, to summarize the article, they say that “Russia and China have agreed to develop shared financial structures to deepen economic ties in a way that will not be affected by the pressure of third parties.” And we all know when they say third parties, they mean the United States.

And they also talk about how this is to “deter the threat of the U.S. government’s long arm jurisdiction based on the U.S. dollar-denominated international payment network.”

And they also reveal that they’re trying to drop the dollar in their business, in the business that China and Russia do with each other.

And then here’s another article to complement this. This was in Turkish state media back in July of 2021: “<Russia accelerates de-dollarization move.

And they talk about how Russia at the St Petersburg International Economic Forum, President Putin accused the U.S. of using the dollar as a tool of economic and political warfare. And he said “the US will regret using the dollar as a sanctions weapon.”

And he pointed out that that Russia’s oil companies are trying to stop using the currency. And the country’s finance minister, Anton Siluanov, said Russia will completely divest its dollar assets in the National Welfare Fund.

And he said – this is a huge quote – “We have decided to get out of dollar assets completely, replacing investments in dollars with an increase in euros and gold.”

So this is something that you’ve talked about. Maybe do you have more insight on and the attempts by China and Russia to de-dollarize, and also to, at the same time, create a new financial architecture?

MICHAEL HUDSON: Think of it more as President Trump, followed by President Biden, forcing Russia and China to de-dollarize, by threatening explicitly – and that was made a month ago again – of cutting them off from SWIFT, the inter-bank transfer system, officially run out of Brussels, right at NATO headquarters.

And the idea is, when you write a check to somebody, you write a check, they put it in their bank; all that goes through the SWIFT system. Well, the SWIFT system covers basically the whole world.

It’s a computerized system so that banks can transfer money. You can send money to England, or to Russia or China; or Russia and China can send money back and forth.

Well, the problem they had is Trump and his secretary again and again and again threatened to cut Russia off from SWIFT.

The U.S. government kept saying, “We can create a crisis with you. We don’t have to bomb you. We don’t have to beat you militarily. We can just paralyze your financial system by cutting you off from SWIFT.”

So what they have done is say, “OK, I guess we’d better create our own financial clearing system and bank clearing system well enough that, if you close us down, we’ll have another parallel system ready to go.”

It’s as if you’re all using MasterCard and you want to shift the Visa, and you say, “OK, just in case the MasterCard decides it doesn’t like us, we’re going to use a Visa account to transfer money.”

So they’ve created their own alternative, ready to go.

It costs a lot of money to develop a huge computerized payment system. But since Russia, China, Iran, and the whole Asian grouping has decided, “Well, wait a minute, most of our payments are among ourselves. If China is paying Thailand, or South Korea, or Russia, buying and selling with them, why does it need to do it in US dollars and have a reserve that is lent to the US Treasury to essentially use the dollars to spend abroad and finance all of its military encirclement of these various areas?”

So they said, any dollars we hold, that’s a loan to the U.S. Treasury. And the loan enables the dollar to be spent on militarily encircling us, so they can say, “If you break away from the dollar, we’re going to use our military bases that we spent your dollars on to bomb you.”

So they’re breaking free of the whole dollar system. And that’s the whole premise of my book “Super Imperialism,” as we’ve discussed before on the show.

So that they’re decoupling from the U.S. economy as much as they can.

And in any case, they say, “Look, the U.S. economy is going down quickly. Both parties, Democrats, and Republicans, are in agreement that the economy has to shrink by about 20%, in order to pay all of the debts that the 99% owe to the 1%.”

So the U.S. economy is not going to be a very good market for it anymore. We don’t need it. It doesn’t need us. Let North America go its way; we’ll go our way. And that’s that’s exactly what’s happening in the world. There’s a global fracture.

BENJAMIN NORTON: Yeah, you referred to the recent crisis in Ukraine, where essentially NATO and the hardcore right-wing nationalists in Ukraine are really trying to cause this conflict in the Donbass region, in the east.

And then they’re falsely claiming that Russia is going to invade. I mean, this is all a pretense, of course, to justify further aggression against Russia and punitive actions.

And then recently, there’s been this discussion, that you acknowledged, of the so-called nuclear option, which is decoupling Russia’s economy, disconnecting the economy from the SWIFT system.

And when Russia and China announced their development of a new financial system, it was effectively in response to those news reports that the US government and the EU were talking about the “nuclear option” of removing Russia from SWIFT.

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And what’s interesting is that Jens Stoltenberg, the secretary general of NATO, has made it clear that they’re not going to militarily challenge Russia over the Donbass, over Ukraine, that if there’s a military conflict – which would likely, by the way, be caused by Ukraine, not by Russia; Russia has made it very clear it has no intention of invading Ukraine – but if the hardcore right-wing nationalists in Ukraine decide they want to attack the Donbass. Russia has said that it would respond.

And then the response would be from NATO not military intervention, but disconnecting Russia from the SWIFT system, which they call the nuclear option.

Which is actually quite interesting, because it would be basically dropping a nuke on the US-controlled financial system, and would be the final straw that would officially decouple Russia and China from the US-controlled financial system.

I think it’s a very interesting moment, because we’ve had you on Professor Hudson for the past few years talking about this issue, of de-dollarization, the attempt to decouple the Chinese and Russian economies from the US- and the EU-dominated financial system. And we’ve really seen in the past few months, I think, an acceleration of that.

So do you anticipate – I mean, when people interview me, I hate when people ask me questions about the future, as if I can, you know, predict what’s going to happen – but given what’s happening right now politically with Ukraine – I mean, there are talks that are happening this week between the US and Russia, so it does seem that the Biden administration is trying to put some brakes on, to prevent this from accelerating further.

But do you think that this year, in the months that come, that we could actually see that nuclear option used, that Russia could be disconnected from SWIFT. And if it is, what would the consequences be?

MICHAEL HUDSON: Well it’s pretty late now because they’ve been talking about it now for so many years that Russia and China have had a chance to put in their own system.

Johnson’s Russia list is a list of all of the big articles in Russia every day. And if you’ve been following that, Russia has already said, “Well, yeah, it’ll be an interruption for a while. It’s not going to be like a nuclear bomb. It’ll be more like a stink bomb.”

So they’re going to drop a stink bomb on Russia, but that’s not the most serious thing in the whole world.

So Russia and China by now have had enough opportunity to protect themselves from this. But from what you said earlier – never, ever quote anything Stoltenberg says. His job is – I won’t even use the word.

But the Americans already have troops in Ukraine. Their special operation forces, they’re in Ukraine. The U.S. has already hired I guess what used to be Blackwater troops, mercenaries; they put them in Ukraine.

So the U.S. is fighting on the side of the Ukrainian Nazis against Russia. Russia said two weeks ago that the U.S. special forces were planning a false flag chemical attack, and it said the city and the time. And it said, if you do that, we’re just going to come in and bomb.

So Russia found out about it and it stopped the false flag attack. But the U.S. has forces there. They thought that somehow they could provoke Russia into actually invading.

I can guarantee you. I’m willing to lose my reputation if Russia actually invades Ukraine. It would be crazy. It doesn’t have the money to do it. It doesn’t have the troops.

And who needs Ukraine? Russia has no need for Ukraine. And it’s a basket case. It has the lowest living standards in Europe. And on every U.S. international report, it’s the most corrupt country in Europe. Nothing can be done to help at all.

Russia doesn’t have to attack it. All it has to do is let it – if somebody is committing suicide, you don’t stop it.

Russia did say that if there is a military attack on the Donbass, we are going to respond with missiles, and the missiles will not necessarily be linked to Ukraine. We may bomb, for instance, Romania, where NATO has missile launchers.

And Russia has made it clear you’re not going to go anymore with these salami tactics of moving NATO bit by bit. As far as Russia is concerned when America put special forces and troops there, when America gives Ukraine offensive weapons, as the Biden administration does, that is literally backing Ukraine, absorbing it into NATO informally.

Whether it has signed the contract or not, it is working for; it is a satellite basically of the State Department.

And so Russia says, Look, we’re going to go back to the sponsors. We’re not going to just hit the troops that hit Donbass; we’re going to hit their staging areas. And the staging areas may be to the west of Ukraine.

That’s the message you should have. Russia won’t fight Ukraine; it’ll fight anywhere from Romania to Poland to Germany.

BENJAMIN NORTON: A few more questions here, Professor Hudson, then we’ll wrap up. One is, we’ve seen a lot of reports in the business press recently about how the Chinese economy’s growth is slightly slowing down.

And the last time we had you on, we talked about the property crackdown that was – it seemed to be that Beijing was trying to pop this property bubble before it burst. So there’s been discussion of China’s economic growth slightly slowing.

But other analysts, especially actual experts and not the fake experts who are just actually anti-China activists who are portrayed as experts in Western media – actual experts have pointed out that what China seems to be doing is slightly slowing down growth in the short term, but maintaining stability and also increasing domestic consumption, increasing its economic resilience, so it’s not as reliant on exports.

China and Russia also have been recently in talks discussing building a pipeline and Chinese importing of Russian gas and oil. So it seems that they’re really preparing, being honest, it seems to me that they’re preparing for economic warfare coming their way in the years to come.

It seems that they understand that the years to come are going to be difficult, and they’re preparing for the storm, if you will. Do you agree with that analysis? And what do you see China doing with its economy?

MICHAEL HUDSON: Well, I agree with the analysis. When I was in China 10 years ago, I was lecturing the students. I was very impressed by the fact that they said, already at that time, there was a lot of corruption in China, because it achieved growth by letting individuals make as much money as they can. And some people have made an enormous amount of money, and we’re going to change that.

Well now they’ve grown up. Ten years later, they have risen within the Communist Party. And this year, there is going to be a very major Communist Party Central Committee meeting that is going to announce a new plan forward for China, the general prosperity plan.

And the plan is to have prosperity for the 99%, not the 1%. And just as China has been closing down the Ant billionaires and the real estate billionaires, it’s now moving to essentially cut the wealth of the 1% and promote the wealth of the 99%.

And you can see its success in doing that with the Covid epidemic. There’s hardly any Covid there compared to other countries, because it’s able to shut down, because its economic institutions are not aimed at making a profit, if they’re state financed, they’re aimed at helping the economy grow.

And that’s the difference between socialism and America’s finance capitalism.

BENJAMIN NORTON: Professor Hudson, if I can jump in for a second, I want to point out that, in 2021, two people in China died of COVID. Two. In the U.S., over 400,000 died of COVID. So it says everything about those priorities.

And I also want to mention, you were talking about this shift in emphasis in China, they refer to it as common prosperity.

MICHAEL HUDSON:
Common prosperity. That’s exactly the program. And that’s what they’re really aiming at. And they’ve been preparing for that, and putting administrators in place for the last few years.

And most of my lecturing in China is all about a tax policy to essentially prevent the kind of real estate bubble that you have in the United States by taxing away the land rent, so that it won’t be pledged to banks for credit.

So China is moving much more to make the shift the central planning away from the banking system back into the government for government purposes of increasing prosperity.

And of course, you mentioned the big pipeline that they’re developing with Siberia. That’s going to take about four years to build, but it’s going to make, essentially, Russia and China can be almost independent of Western Europe.

Western Europe wants to remain a satellite of U.S. policy. Then Western Europe will go the same way that the United States is going. It’s going to be left out of all of this prosperity that is being created by the Belt and Road Initiative and by the fact that China is able to revive its economy. And even Russia is developing is broadening its economic base.

BENJAMIN NORTON: And finally, to conclude our interview today, Professor Hudson, I want to point out an incredible article that was just published in Bloomberg. I have been sharing this a lot and commenting on it because it says so much about the U.S. government and the U.S. economy.

This is published in Bloomberg. It was published on December 29. It is titled “[Kamala] Harris Quietly Taps Wall Street, Tech CEOs for Advice on Policy.” And that’s pretty euphemistic.

VP Kamala Harris has increasingly turned to corporate executives from Wall Street and Silicon Valley to serve as informal advisers, policy allies and political boosters.

Basically, what the article reveals is that the US vice president is working directly with executives from large corporations to create policy.

And I’ll just read a few paragraphs here: “Vice President Kamala Harris has increasingly turned to corporate executives from Wall Street and Silicon Valley to serve as informal advisors, policy allies, and political boosters as she grapples with a sprawling and at times intractable policy portfolio.”

They mention executives from Microsoft, Cisco, and Citigroup, Citigroup being one of the major banks we talked about earlier, that received some of the \$4.5 trillion in Fed repo loans.

So do you want to comment on this revelation? I mean, it’s not surprising, but this revelation from Bloomberg that the US vice president is farming out her policy to executives from large corporations.

MICHAEL HUDSON: It sounds like she is looking for campaign contributions to me, and saying, you know, I will continue to pay attention to you if you give me enough campaign funding that I can get elected over whoever the rival is going to be.

>But I mean, she has to do something with her time, and she is trying to just pacify big business on behalf of the Democratic Party and the Biden administration.

So it just sort of pacifying, saying, we’re on your side. Forget what we put in our platform. Forget the campaign contributions between us. I’m on your side, not the voters.

BENJAMIN NORTON: Great. Well, on that note, before we leave, there are a few comments, super chats with a few brief questions and then we can conclude here.

This is from a Taste of Bass. Thanks for the super chat comment. They said, “Can you ask Professor Hudson about bitcoin? A lot of bitcoin promoters have been using Super Imperialism in their, I’d say, fallacious arguments.”

What do you think about bitcoin?

MICHAEL HUDSON: I don’t like it at all. I have nothing to do with it, and I just avoid all discussion of it even. You might as well buy Andy Warhol etchings.

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BENJAMIN NORTON: Yeah we’ve asked you this before and you said it does seem to me that it’s just a bunch of speculation. And not only is it a bunch of speculation, but it seems to be a pretty unreliable investment considering how much the price fluctuates month by month.

MICHAEL HUDSON: Well, let’s look at what they’re speculating on. They’re speculating on that the great growth industry of our time is crime, is drug dealing and its crime. And the criminals use bitcoin. And as they get richer and richer and put all the criminal savings into bitcoin, the price is going to go up and you can make a profit riding the crime wave.

BENJAMIN NORTON: All right, well, I want to thank everyone who watched, everyone who commented. Like always it was a great discussion with Professor Michael Hudson.

And you can go to  michael-hudson.com to check out his articles, his interviews, and I would highly recommend going and reading his book “Super Imperialism.”

And for those who want to who are kind of more visual or audio learners, you can go check out the interview that we did here with Professor Hudson on his book “Super Imperialism.” But I still think it’s important to read the book because there’s so much information in there. It really can change the way you see the world.

So it’s always a pleasure, Professor Hudson. Do you want to plug anything before we wrap up?

MICHAEL HUDSON: I can’t think of anything right now, except my “Killing the Host,” my book on the American economy. I mean, don’t just stop with one book. There are plenty there. You can check on Amazon.

BENJAMIN NORTON: Yeah, his books are excellent. He has “J for Junk Economics,” “Killing the Host,” “…And Forgive Them Their Debts” and others. So definitely go to michael-hudson.com and check those out.

And thanks to everyone, and we’ll see you all next time.

MICHAEL HUDSON: Thanks for having me.

 
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  1. Nothing in our highly technological and ideological society is accidental. Inflation is going to be the nail in the coffin for the American middle class.

    The poor don’t really care; they’re handed everything anyway.

    Those in high income/net worth brackets can hedge inflation with property. As property values go up, loans against that value are taken. As inflation increases, those loans are paid back with money that has less value (a win/win) while the property value increases.

    The middle class, largely income dependent and majority paycheck-to-paycheck due to expenses gets killed with inflation. They aren’t taking out 100k loans against a real estate portfolio or stocks. Instead it’s a struggle just to keep up as rising daily costs (food and fuel are two easy ones) go up faster than income.

    Again, nothing in this complicated highly structured world is done by accident. Unexpected results are quite possible, that’s the story of human history. But do not think for one minute that as inflation kills the middle class that there won’t be a lot of grins and backslapping in D.C. as the numbers come in.

  2. Great interview! Thanks for the transcript, too! Always good to hear from the professor!

    • Agree: Biff
  3. Apparently Hudson only gives interviews to people who do not know what a video camera is. This is the umpteenth interview that features an ancient method called a “transcript.”

    I do not know what part of the world has never heard or used a video camera. But leave it to Mr. Hudson to find that place on Earth in order to sit for an interview.

    Michael’s advice and words are frequently meaningless to people who live in the world currently. He talks fluently about things that happened in the 19th century and all the way back to 5,000 years ago, but says very little about what can or should be done in the 21st.

    So I guess giving interviews to people from a hundred years ago (when they did not have video cameras) is fitting for him. A meaningless interview with a man spouting meaningless nonsense from a time way in the past.

    Is he doing this on purpose? How could anyone be so stupid?

  4. What is causing inflation is that they want there to be inflation.

    If they didn’t want there to be inflation, there wouldn’t be inflation.

  5. @restless94110

    Videos suck, dumbass. They eat up too much time. Transcripts are a thousand times better. And most people, grown-up people, people with experience of the world, on here and elsewhere, agree with me and laugh at you as some typical underage puerile child who doesn’t understand big words and can’t read fer the life of him anyway.

  6. @obwandiyag

    Forsooth, me Lord, go back to the 17th Century in which you inhabit, ye olde nobleman of the reining King.

    • Replies: @Badger Down
    , @fish
  7. Call it supreme irony. Call it unbelievable. But it’s a fact. Those 3 hyper banks who got the big bailouts from the “Federal” Reserve, TRILLIONS OF DOLLARS, MIND YOU; just happen to be among the primary owners of that privately owned central bank.

    Now think that over. Are we living in a theatrical production of Alice In Wonderland? It sure seems that way. Reality has gone bonkers. And because the Bank\$ters, combined with their interlocking directorships with Blackrock, Vanguard and State Street, together with unmentionable Crime Clans headquartered in City of London; happen to also own the mass-media of disinformation and out and out lying to the gullible 30% of the American public who drown themselves in the sewers of Boobtoob Noose; they are able to make the likes of Bernie Madoff look like a two-bit street corner swindler.

    Salvador Dali, with his melting watches and all, could not have come with the surrealistic psychodrama being played out on working-class Americans, particularly the common senseless denizens of sub-urbia. Waaaay too many of those folks done got themselves edjumacated to the point of reality-denying idiocy. But they’re exactly the ones who are catching it in the shorts. As the majority of those nearly terminally deluded fools also happen to be zonked out completely on taking the Jab, they just happen to be not only getting it in the shorts—but at both ends with the double-whammy of ever elevating prices on most everything, together with deteriorating physical AND mental health from being mired within a false sense of reality.

    Whew! What a comedy of fools.

    • Replies: @PetrOldSack
    , @annamaria
  8. So this supposed banking liquidity problem happened… that nobody talks about, then a pandemic?

    You know there is another way to look at it.

    There was a crisis coming (“pandemic”) that the powerful knew about and they made sure plenty of lucre was put in place for a lockdown populace if needed?

    Maybe the germ attack theory may have some truth? Just before the pandemic China has some bad luck? China had to cull pigs and chickens because of virus outbreaks?

    Now Bidet wants to open up the electoral system to massive voter fraud?

    The “elites” are busy.

  9. Ruckus says:
    @restless94110

    Everybody, gather round. This is what a faggot looks like.

    • LOL: Biff
  10. @American Citizen

    The poor have not been handed everything anyway

    Otherwise your comment works

  11. @American Citizen

    The middle classes are the biggest net loss to the elites. They are the appendix-cancer of the power mongers. Covid – Vaxxing, more then explaining inflation, is a return on elite thinking. Inflation helps, planned as in paying less for consent building. What the middle classes essentially do. Societies in the twenty-first century need a pancake flat bottom(soldiers, technicians, that can cope with smart machines, shifting smart to robots, and “just smart enough” to the pancake individuals.) The middle classes are a exo-cancer putting in-necessary pressure on elite singularity.

    The war on, is shaping the elite in-fights as to who, where(as far or up to inside China and Russia), and how(how to layer, trim, brown the stew at the bottom). For now the Chinese and Russia seem to have a more streamlined take on the how to go at it.

    The middle classes are not to be considered, they chose to be self destructive. Have no sense of collective survival, bet everything on individual strife.

    The middle classes are considered a systemic failure, overhead, those in power seem to address the issue as above. We can expect more of a trial scenario of expatriating the middle-class houris to where they belong: Allah’s and the Catholic and Orthodox afterlives. Inflation, Bitcoin, Covid-Vaxxing in concurrence at work.

    And, just as a pertinent mention to unz.com readers, it is not the Jews, it is the Jewish middle classes as much as the White ones that are to be shipped of.

  12. 94110 is the worst zip code. Ever.

    • Troll: restless94110
  13. @American Citizen

    The poor don’t really care; they’re handed everything anyway.

    Neither do the ultra rich, and for the same reason.

    For details, please consult,

    Wall Street on Parade.

    https://wallstreetonparade.com/

    What’s causing inflation? It’s the Fed, along with its partners in crime on Wall Street and in D.C., and their never ending “loans,” bailouts, grants, and what not under cover of “covid” and other exceedingly lame pretexts.

    • Replies: @Change that Matters
  14. It takes 2 economists to turn an obvious result of a simple economic law into a 5-10 thousand word* interview transcript. The law of Supply & Demand cannot be waived for anything, and that includes CURRENCY. The repo market liquidity crisis in ’19 is one thing, but one can simply look at Congressional spending* on the national budget and see the problem.

    Over the last 20 years, though it’s been in fits-and-starts, the debt (one can still see this near the back of the IRS 1040 tax instruction booklet in pie chart form) owed to Treasury bondholders has increased by numbers near \$1,000,000,000,000 (that’s Trillion) yearly. Since the government supported Kung Flu PanicFest has given Congress a great excuse, spending has been ramped up greatly. Treasury bonds can be converted to dollars, so, POOF, more money is created into existence.

    Those BLS numbers over the last decade and a half, saying 1-2% is our inflation rate, have been bogus, as Peak Stupidity has long noted in posts with our Inflation topic key. (One may also want to read Shadowstats.) We have consistently seen more like 4-5% yearly in lots of consumer price inflation, utilities, insurance, healthcare (has been even higher), higher education, building materials, auto parts, food, etc…

    Well, you ramp up the spending, and you’re going to ramp up the price inflation. Housing and land have gone way up, just as in China, because people want to save the value of their labor in something that can’t be stolen from them so easily as currency in the bank can. Yes, economies around the world are starting to realize that this \$28,000,000,000,000 debt can’t be paid back by the dwindling number of, and poorer at that, American White middle class that pays the bulk of the income taxes.

    .

    * Contrary to what these 2 econonotards kept blabbering about, the US President does not spend any of the taxpayers’ money.

    • Replies: @Mefobills
  15. gotmituns says:

    What I don’t like is these jewish bastards might want to celebrate the centennial of wiping out the middle class in Germany in 1923 by doing the same thing to us next year.

    • Agree: HdC
    • Thanks: al gore rhythms
  16. BENJAMIN NORTON: Professor Hudson, if I can jump in for a second, I want to point out that, in 2021, two people in China died of COVID. Two. In the U.S., over 400,000 died of COVID. So it says everything about those priorities.

    Poof!, goes the credibility of this Norton guy. We have no idea how many Chinamen died FROM Covid. It’s not likely 2, though, hahaaa! We also have no idea of how many Americans died FROM Covid either, as there was those great government-bailed-out financial incentives – for me, no co-pay and 0 deductible – for any healthcare that somehow was related to the dreaded Covid one niner to be marked as such for “case” numbers and deaths.

    The discussion on the bailing out from the SWIFT system and the quest for gold was decent, but something from the later discussions tells me these two are just a couple of Big-Government supporting, yes, Socialist, and anti-all-things-America types. Their take on China was retarded, and their take on bitcoin is similar (only for drug dealing and the like?)

    Regarding bitcoin (and other cryptocurrencies), yeah, speculation on the price is not something I’d have anything to do with either, being a conservative guy. However, it’s use to avoid government control and taxation of payments is nothing but a good thing. No, it’s not good as a store of wealth, but it’s great currency for money transfers.

  17. sally says:
    @obwandiyag

    no, i think the oligarchs cited in the article packaged into trillion dollar bundles zero value housing bonds guaranteed to trash..for lack of payment by the underlying zero credit borrowers. The banks and their subsidiaries that did the packaging and sold the unscrambles to foreigners and others were called upon to make good in a great big hurry by those who discovered they had been ripped off. IMO, that is why the banks mentioned were bailed out.. they were caught with their hands in the candy jar. Violating every thing known to mankind that would keep banks safe, they were just as guilty in 2008 as the 1929 crowd.

    I also agree if they wanted inflation, at least for now, there will be inflation, and I agree Covid seems to be a cover up scam and I agree Wall Street is the visible cause of the global problem, and that The visible top of the wall street pyramid finds two companies, Vanguard and Black Rock, with controlling or ownership interest in over 1600 or more wall street promoted companies which comprise between \$12 and \$14 Trillion a year in revenue.. These revenues are generated solely because the congress gave them a monopoly on making money to them. The rule of law industry (ROLI).. I call them.. The ROLI industries earn their profits from copyright and patents and other monopoly powered intangibles. Copyright and patent law give the wall street companies monopoly power, they owners of those law made packages of wealth survive because it is against the law to compete with them.

    The law i am talking about is called patent law and copyright law. Patents and copyrights and a few other intangibles comprise 90% or more of the assets shown on the balance sheets of these unbelievable in size, monopoly powered US government and international treaty protected global commercial rulers, corporations and organizations. Its all a paper piece of BS. The entire wealth of Wall street is a paper doll and yet every one of the elected are in full support of the Wall Street bandits. It was the Wall Street gangs that took from America its industry and it was the elected USA which made it possible for the members of the Wall Street gangs to rape America (the USA handed out patent and copyright monopolies like they were candy and entered into the treaties and treaty organization memberships and engaged in foreign activities that made the candy eaters very very wealthy on the paper made valuable by the rule of law. Remove the law, and wall street wealth will disappear, and American industrial and technical might will be restored. Problem is it will take 50 years to restore what it took 10 years to destroy. .

    Its about to crash on them. Putin pulled their plug in Ukraine yesterday, the tub is draining.. its about to happen I predict.. ..

    • Replies: @PetrOldSack
  18. onebornfree says: • Website

    MH said: “And this year, there is going to be a very major Communist Party Central Committee meeting that is going to announce a new plan forward for China, the general prosperity plan.”

    “And the plan is to have prosperity for the 99%, not the 1%. And just as China has been closing down the Ant billionaires and the real estate billionaires, it’s now moving to essentially cut the wealth of the 1% and promote the wealth of the 99%.”

    And yet: “Everything government touches turns to crap” Ringo Starr

    How is it that a drummer in a rock band understands this simple fact of reality, but a “professor” of economics remains completely oblivious to the exact same fact?

    “The idea that socialism is a share-the-wealth program is strictly a confidence game to get the people to surrender their freedom to an all-powerful collectivist government. While the Insiders tell us we are building a paradise on earth, we are actually constructing a jail for ourselves.” Gary Allen, “None Dare Call It Conspiracy”

    MH said: “And the criminals use bitcoin.”

    So “logically”, the criminals don’t run the big banks, or the government, and criminals don’t use fiat (ie fake) government-created “money”, right?

    Nah, silly me, they’re all in bitcoin! 😂😆😜

    “Taking the State wherever found, striking into its history at any point, one sees no way to differentiate the activities of its founders, administrators and beneficiaries from those of a professional-criminal class.” Albert J. Nock
    https://mises.org/library/our-enemy-state-0

    “Regards”, onebornfree

    • Replies: @Adam Smith
  19. Renoman says:

    It’s plain old money printing, they screwed the poor so hard most can’t afford food and shelter and this from a Country with that outrageous Military budget? What a disgrace, filling the country with immigrant wage slaves to boost their profits it’s all just crimes of the filthy rich and I mean really filthy.

  20. Mefobills says:
    @Achmed E. Newman

    Contrary to what these 2 econonotards kept blabbering about, the US President does not spend any of the taxpayers’ money.

    Only one is an econotard. There are only a handful of economists in the world who give the shit to you straight, and who are not “tarded.” In this very interview Hudson explains why they are tarded.

    Professor Hudson has pointed out for many years that inflation in the US and other countries is often measured in a very strange way that doesn’t include housing prices, and it doesn’t include what he calls the FIRE sector: finance, insurance and real estate.

    When finance pushes paper back and forth, say when you buy and sell a home, it is seen as GDP increase. But, the actual physical stock of housing didn’t improve. By not including something in the statistics is a blinding operation, like sticking something in your eye. So, there is a GDP increase, but the reality is that housing prices are pushed as new bank credit channels toward fixed amount of housing stock. It is the “loans” that people take out that pushes housing prices. Debt mechanics are not part of some “tarded” economists thinking; and it is Hudson who is taking them to task.

    Hudson is also telling us that Pam Martens is not a “tard.” Why? Because she is not beholden to her paymaster. She has the time and pluck to investigate balance sheets, when so much of the “press” has been bought out and consolidated into an Oligarchy of owners. Thanks Bill Clinton and other (((CRF))) stooges for the 1996 telecommunication act.

    Hudson is telling us that Yellen is corrupt, and that she changed the wording in Dodd-Frank. Remember, money’s true nature is law, and the privateering finance sector wants to own the money power. To this end, they will adjust and maneuver the government and the law to their benefit.

    Well, what happened, apparently, was that while the Dodd-Frank Act was being rewritten by the Congress, Janet Yellen changed the wording around and she said, “Well, how do we define a general liquidity crisis?” Well, it doesn’t mean what you and I mean by a liquidity crisis, meaning the whole economy is illiquid.

    She said, “If five banks need to borrow, then it’s a general liquidity crisis.” Well, the problem, as she points out, is it’s the same three big banks, again and again, and again and again.

    There is actually a lot in the article that is non-tarded, but I get the general outrage.

    People feel like there is an invisible hand in their pocket, squeezing their testicles, and there is an invisible hand. Hudson is perching glasses on your nose so you can see it.

    ______________

    Because if you get an economics degree in academia, they don’t talk about money, or debt, or credit. None of this appears. None of this is in your money in banking course. It’s all sort of a Mickey Mouse

    _____________________

    In other words, Hudson is straight up telling you that most economists are mickey mouse. Reality is not taught.

  21. Publius 2 says:

    Why does he repeatedly refer to (((communists))) — such as (((those))) who took over Ukraine — as “right wing” and “NAZI”? Hilarious.

    • Replies: @Mefobills
  22. Mefobills says:

    More from Hudson that probably could use some explanation:

    Well now they’ve (young Chinese students, some that Hudson taught) have grown up. Ten years later, they have risen within the Communist Party. And this year, there is going to be a very major Communist Party Central Committee meeting that is going to announce a new plan forward for China, the general prosperity plan.

    And the plan is to have prosperity for the 99%, not the 1%. And just as China has been closing down the Ant billionaires and the real estate billionaires, it’s now moving to essentially cut the wealth of the 1% and promote the wealth of the 99%.

    And that’s the difference between socialism and America’s finance capitalism.

    It’s important to understand what Finance Capitalism is. It is wall street and private capital controlling of the economy and government. Private capital ultimately is comprised of private bank credit, which is hypothecated into existence at debt.

    China is industrial capitalist, and uses state banks. There is a middle tier of private banks, who are loosely controlled by the state banks. Above the state banks is the CCP, and there is no doubt about the order of the hierarchy. Finance deep state actors are NOT in control in China.

    Cutting the wealth of the 1% is also cutting the wealth of an Oligarchy. For example, Jack Ma had the temerity to try and create his own exchange mechanisms within Ant Group. Part of what makes money work is the network, where money has high acceptance. Normally, the law is used to make money have acceptance, to make money good for paying taxes. Jack Ma was trying to take the law into his own hands, and to self aggrandize himself.

    The finance capitalist west does not have the ability to spank its Jack Ma types, to put them into a headlock and say – you shall not pass!

    The general welfare clause of the constitution became toilet paper when the U.S. transitioned to finance capitalism around 1912.

    And the plan is to have prosperity for the 99%, not the 1%. And just as China has been closing down the Ant billionaires and the real estate billionaires, it’s now moving to essentially cut the wealth of the 1% and promote the wealth of the 99%.

    The Ant billionaires, and the real estate billionaires, much of their “wealth” is in the form of sordid gain. They didn’t earn it. They were Jack Horner sitting in the corner eating their puddin and pie, and stuck in their thumb and pulled out a plum.

    Hudson has been lecturing the Chinese leaders on how to prevent property bubbles. The property bubbles in China have the exact same mechanism as the bubbles blown in Japan in the 80’s and in the U.S. in the 90’s, and to some extent up to today. This preventing includes the debt formation at inception, and also tax policy.

    None of what Hudson is teaching is being debated in the halls of congress. After the 17’th amendment, Senators became stooges of finance and their paymasters.

    Senators were never to be stooges of those who pay them to run for office, or to be subordinated to big business. Senators were to be sent directly by the State Legislatures, and not elected. Senators were never meant to be populists.

    Finance Capitalism includes populist democracy as a shield; popular democracy is the worst form of government.

    • Agree: Old and Grumpy, Biff
    • Replies: @Achmed E. Newman
  23. @Mefobills

    Don’t get me wrong, Mefobills, I appreciate reading things that are straight up from Mr. Hudson, most of it things I’ve read on Zerohedge over the years. However, when he veers off into stupidity, he has just put on his retard hat, and I can’t deny that.

    Regarding real estate, there’s NOT a fixed amount of housing stock, but yes, it’s not easy to just get overall apples-to-apples price changes in housing costs. Some neighborhood might get gentrified and house prices could go up 2x in 5 years. Are they better houses? Well, are the black people fewer and farther away? If so, yes, they ARE better houses. How much more are they worth? Who knows?

    Housing is not the only thing that makes the calculation of the varying (well, increasing since any of us have been alive) price of this “basket of goods” not only tricky to calculate but easy to hide inflation within. In that link I gave above, there are posts about “hedonics” and “price substitution” that you may want to read. It’s not an easy job, but if someone at a high level wants the CPI to stay low to avoid big increases in COLA to SS, etc and not scare the sheeple, then those green eyeshade boys at the BLS can probably make it work.

    • Replies: @Mefobills
    , @Adam Smith
  24. Realist says:

    Why all the insults over the format…video vs transcript???

    Almost eleven thousand words on what is causing inflation. How pretentious…economics is like reading tea leaves…just not as accurate.

    Supply and demand…just saved 10,797 words.

    • Replies: @Achmed E. Newman
    , @Sparkon
  25. @Mefobills

    The general welfare clause of the constitution became toilet paper when the U.S. transitioned to finance capitalism around 1912.

    The general welfare clause was always nothing but a preamble of two different parts of the document, Mefo. It was not supposed to be taken as giving powers to the Feds.

    Had Amendment X been adhered to, we’d never have had that finance capital at the top of the economy, nor the FED, nor Roosevelt’s and (even worse) Scumbag Johnson’s Socialism.

    [Sigh] “Well, we tried.” [Shrugs shoulders]
    – Thomas Jefferson.

    • Replies: @Mefobills
  26. Mefobills says:
    @Publius 2

    Why does he repeatedly refer to (((communists))) — such as (((those))) who took over Ukraine — as “right wing” and “NAZI”? Hilarious.

    Don’t let that get in your way. Don’t let it be an obstacle to your understanding.

    No economist can mention our (((Friends))) and keep their career. They will be persecuted.

    The people who took over Ukraine were neo-cons, who in turn are part of (((liberalism))). Neo-cons are the children of the Bolsheviks. The pale of settlement is where Ukraine is now. The Bolsheviks privately nurse grudges about Ukraine as they think of it as theirs. Remember the Jew Coup with Trump over Ukraine? Why so many Jews? There is a significant Jewish mafia located in Odesa.

    The actual NSDAP socialists were right wing socially, as Germany had been abused by liberalism. For example, in Red Berlin there was so much degeneracy that some mothers were hooking themselves and their daughters. Jews were putting on plays that promoted liberal degeneracy. During the Weimar hyperinflation, Germany found itself dispossessed, as “foreign finance” bought up the country. Most of the book burnings after Hitler came into power, was the burning of pornography, which in turn was typically Jewish. The parasite uses pornography to subdue populations, as was done to Palestine during the Zionist occupation.

    The right wing NAZI’s in Ukraine are working for a Jewish president, and are in thrall to (((international capital))).

    In other words, these supposed Nazis are LARPing. Mostly they are ignorant people who are being maneuvered by forces they don’t understand.

    During WW2 many Ukrainians sided with Hitler, as they did not want to be abused by the Bolsheviks. The Holodomor was still in their mind.

    Tragically, Hitler did not allow enough Ukrainians to join the Waffen SS. Hitler did accept a Cossack Battalion but not the Slavs in Ukraine? Nobody can defend Hitler’s mistakes in this region.

    • Agree: annamaria
    • Replies: @Rufus Clyde
    , @Publius 2
  27. @restless94110

    Reining is what the king does to a horse. You mean reigning. I see why you prefer video.

    • Agree: Barbarossa
    • LOL: Fart Blossom, Biff
  28. It’s good to learn that the Germans have been able to repatriate their gold after all; I thought the Americans had stolen the lot, in accordance with their usual practice.

  29. @restless94110

    You wrote:

    A meaningless interview with a man spouting meaningless nonsense from a time way in the past.

    That succinctly pretty much sums up who Hudson is.

    And, as is always the case with Hudson’s articles posted on UR, this will be bypassed by the sensible readers.
    It’ll finish with a handful of comments as few people will invest the time to read even a few paragraphs of Hudson’s twaddle (let alone bother to post a comment), seeing as Hudson’s opinions are about as sought after as a lice infestation.

    • Replies: @Mefobills
    , @restless94110
  30. @Realist

    Agreed, Realist!

    BTW, I was guessing on 5,000 to 10,000 above. Thanks for checking.

  31. R2b says:

    Too long article, with a few nuggets.
    Loan wasn’t given to cover losses due to plandemic, I believe.
    The gamblers just needed dow….for the scamdemic.
    It’s just a big crime-syndicate, stealing with funny-money we the people are forced to make liquid by our work, ok?

  32. Sparkon says:
    @Realist

    Most of us learned by reading, not by watching videos or the boob tube. I definitely appreciate the transcript as I am much more likely to at least skim an article than a video.

    It is also possible to use the search feature on a transcript, not so with a video. Additionally, it is much easier to quote from the written word than from a video, where one must prepare his own partial transcript in order to quote someone.

    After skimming through the discussion, I did use the search feature, and was not overly surprised to see that the word “energy” does not appear even once in the transcript.

    Renewable energy is the engine driving inflation.

    Of course prices will continue to rise when we all have to pay extra for electricity generated by the spinning whirligigs and bird cooking solar arrays which are money losing propositions: they cost more than they produce.

    When the cost of producing anything goes up, the costs are passed along to consumers.

  33. fish says:
    @restless94110

    No need to get worked up about Obi…..if he can’t have at least one foot stamping tantrum a day he just ain’t right.

    The words oldest thirteen year old girl!

    • Replies: @restless94110
  34. Mefobills says:
    @Achmed E. Newman

    Well you are not wrong about CPI and green eyeshade boys fudging the numbers.

    This brings up an important point about statistics, and who are keeping them. Even the Covid narrative is jacked up due to bad statistics. Did you die WITH covid, or because of covid?

    You can see how the housing bubble works on fixed housing stock in those areas where there is no new supply.

    For example, an already built out area of the city will see prices jump faster than those in the hinterlands, where supply can catch up to demand (new bank credit is demand).

    Or, a completely built out island area will see big property price jumps. New bank credit is chasing after fixed housing stock, with prices being elastic, and supply being sticky.

    The new bank credit is a knock on effect of QE and other schemes to keep the sheeple going into new debts, something like musical chairs.

    Banks have a business model, and that is to create new credit at interest. If they cannot make enough interest, they create other schemes, such as derivatives.

  35. Mefobills says:
    @Truth Vigilante

    It’ll finish with a handful of comments as few people will invest the time to read even a few paragraphs of Hudson’s twaddle (let alone bother to post a comment), seeing as Hudson’s opinions are about as sought after as a lice infestation.

    I was wondering when the Lolbertarian low IQ brigade would show up for a Hudson article.

    All we need now is oneborn free-dumb to do a drive by shooting and post some Mises links.

    Oh and he needs to give us his regards, what would life be like without his blessings?

    OH wait, I just scanned the comments, and freedumb did make a post. My apologies. He usually camps out and is one of the first commentators.

    • LOL: dogbumbreath
  36. Realist says:

    Most of us learned by reading, not by watching videos or the boob tube. I definitely appreciate the transcript as I am much more likely to at least skim an article than a video.

    That’s fine, but there were some nasty insults from commenters.

    When the cost of producing anything goes up, the costs are passed along to consumers.

    Yes, but it all boils down to supply and demand.

    • Replies: @Fart Blossom
    , @Sparkon
  37. Mefobills says:
    @Achmed E. Newman

    The general welfare clause was always nothing but a preamble of two different parts of the document, Mefo. It was not supposed to be taken as giving powers to the Feds

    It was probably from Franklin, who was trying to recapitulate the system they were running in Philadelphia Colony.

    Unfortunately, many of the mammonites (like today’s libertarians) were festooned around the constitutional convention trying to get their way. Jeremy Bentham especially was a bad actor.

    So, the constitution has some things in it that are obviously bad.

    Jefferson wanted one do-over when he died, and that was to fix the “government borrows its credit” from privateers. (Article 1 mistakes).

  38. nsa says:

    Let’s summarize what the learned Professor delineates in 10,800 words of illuminating prose: JOONOMICS 101. Joonomics 101 is a freshman level course describing a form of modern financial alchemy wherein money and credit are created out of thin air and ladled out to fellow tribal members, friends, relatives, various gentile useful idiots, and the apparatchiks needed to kept the scam functioning. Eventually, some of the slop spills out of the trough and trickles down to the masses of asses. One fine day the wall street jooies will just reach for the ring, attach floats to the US treasury, and tow it off to Izzieville.

  39. @restless94110

    Trying to explain the difference between the spoken word and the printed word to someone who does not read, is like trying to explain sight to a blind man.

    • Replies: @restless94110
  40. @Achmed E. Newman

    The numbers from China are 100% factual.

    The two COVID deaths were also obese. Turns out COVID isn’t a thing if the lungs of your elderly are coated in tar and none of them are 300lbs+ riding around on mobility scooters. Mopeds sure, but not the Walmart ones.

    • Replies: @Showmethereal
  41. @Realist

    Yes, but it all boils down to supply and demand.

    Then the thieves and their political butt boys enter the picture and complicate things a bit. Happens every time, all the time.

    • Agree: Realist
  42. Hudson should stick to economics and not interject his ignorance on military matters. He says Russia doesn’t have the money or the military to invade Ukraine??? The Russians have built a world power military of state of the art missile and nuclear tech with 1/18th the budget of the US. And only what 150+ million people?!!’ Hudson is an idiot. Russia’s military industry is practically 100% vertically integrated along with it’s oil and gas industries. The US relies hugely on other countries to build their military hardware ie computer chips/parts, heavy metals, rare earth elements etc. America can’t even produce cheap consumables like handsoap and paper plates lol. Americans shouldn’t fear war with Russia. They should fear war with Russia and China. The woke west is circling the degenerate drain now going after its own people ie domestic terrorists. America has stage 4 cancer and is on life support.

    • Replies: @Showmethereal
  43. Sparkon says:
    @Realist

    That’s fine, but there were some nasty insults from commenters.

    It was commenter restless94110 who ignited the flames at the top of the discussion:

    Apparently Hudson only gives interviews to people who do not know what a video camera is. This is the umpteenth interview that features an ancient method called a “transcript.”
    […]
    How could anyone be so stupid?

    Live by the flame, die by the flame. It’s one thing to remark or even complain, but one should be able to do it without gratuitous insults.

    Demand for energy has always been increasing, so artificial reduction of supply by reliance on unreliable sources can only drive up energy’s cost, and since everything but everything relies on energy to operate, the net result is inflation.

    Renewable energy is a bleeding wound on a nation’s economy.

    • Agree: Realist
    • Replies: @Gerrymander'd
  44. Very enlightening article/interview. Thank you for your work.

    Federal Reserve System – free riding suckers – thanks to Woodrow Wilson, a creature Germans and now the whole world should never forget.

    FRS the robbery-homicide against all of humanity.

    The robbers in the law ought to know that they are soul too, and shall have to pay back (twentyfold + „collateral damages“).

    It will catch up for each and every bankster & cons.
    If not this life than the next.
    Everyone reaps sooner or later what he has sown.
    Good and bad deeds are not offset and each harvests individually.

  45. @nsa

    Bravo!
    Brilliant summary!

  46. @fish

    Says the hillbilly who just crawled out of a bog in the Ozarks. This is an exciting glimpse of who reads Hudson. Words like : nasty, crazy, mean-spirited, stuck in the past, name callers. What a delightfully erudite audience for Michael!

    • Replies: @fish
  47. @Truth Vigilante

    I agree with you on much of your comment, but once another commenter linked to the video of the interview, and I watched it, Hudson did come through with a bit more contemporary analysis than he normally does. Still not much on the actions front from him, but it’s been a while since anyone nailed Biden on the student loans, and the minimum wage stuff. And Hudson did talk about how the asset bubble is being inflated and what that means for everyone but the 1 percent.

    I usually always will give him a chance, so long as I don’t need to read a huge transcript. And the column could have had both the vid and the transcript to satisfy all the fogies who want to read that long thing.

    What’s surprising to me is all of the fools leaving short comments to me, calling me names. I guess the only people reading the column and commenting are 13-year old boys? Anyway, I wish that both Hudson and Ellen Brown would man up and start vigorously speaking out their conclusions, instead of being so withdrawn and indirect.

  48. saggy says: • Website

    Does anyone really understand this stuff? My guess is not 1 in 1000. Let’s start at the beginning of the article … I’d like to be the 1, but so far I’m one of the 999.

    US Federal Reserve quietly (and apparently illegally) bailed out big banks in 2019 with \$4.5 trillion of emergency repo loans

    What is a ‘repo loan’, what is the ‘repo market’? From https://www.federalreserve.gov/newsevents/pressreleases/monetary20210728b.htm

    The Federal Open Market Committee on Wednesday announced the establishment of two standing repurchase agreement (repo) facilities—a domestic standing repo facility (SRF) and a repo facility for foreign and international monetary authorities (FIMA repo facility). These facilities will serve as backstops in money markets to support the effective implementation of monetary policy and smooth market functioning.

    Under the SRF ….

    Under the FIMA repo facility, the Federal Reserve will enter into overnight repurchase agreements as needed with foreign official institutions against their holdings of Treasury securities maintained in custody at the Federal Reserve Bank of New York. The rate for this facility will be set initially at 25 basis points with a per counterparty limit of \$60 billion. By creating a temporary source of dollar liquidity for FIMA account holders, the facility can help address pressures in global dollar funding markets that could otherwise affect financial market conditions in the United States.

    Shouldn’t the rate info be 25 basis points per ??? some duration?

    So, let’s say the Bank of Italy has Treasury securities held in custody at the Federal Reserve Bank of New York. The Fed enters into a repo agreement the BoI to buy 1 billion = 1,000,000,000 worth of Treasuries sold at face value and to resell them after a term of 1 day ! to the BoA at a price of 1,000,000,000 x (1+.0025) = 1,002,500,000 so the Fed makes a tidy profit of 2,500,000

    Or, maybe the rate is 25 basis points / year ?

    Then, once we understand what the repo market is, the next question is what purpose does it serve?

  49. @Timothy Madden

    What an arrogant prig.

    I read, you dope.

    Do I want to read a huge transcript when I can watch it on video? No.

    Because I see the difference and prefer the audio visual format for interviews.

    Trying to explain that to someone like you is like trying to lead a horse to water then try and make him drink.

  50. “I tvied to varn you.” –Funny Mustache Man

  51. @onebornfree

    How is it that a drummer in a rock band understands this simple fact of reality, but a “professor” of economics remains completely oblivious to the exact same fact?

    • Agree: Achmed E. Newman
  52. Jon Chance says: • Website

    Socialism is the billionaires’ best friend.

    Anyone who still views the world through a lens of “Left vs Right” (or “Black vs White”) is incapable of understanding history, economics, or much of anything else.

    https://www.youtube.com/watch?v=cTPopNG6LRM&list=PLDVQ932i7NF1jXUrdC589fMRAKx_LmAVp&index=2

    http://TheMoneyMasters.com

    https://HenryGeorge.Org

  53. @Achmed E. Newman

    How much more are they worth?

    They are worth what the bank is willing to lend.

  54. You wrote: “Do I want to read a huge transcript when I can watch it on video? No.”

    How exactly does one “watch a huge transcript”… “on video”?

    The only reasonable answer that you can give me is that you meant something else. But that is essentially my point.

    I understand what you are writing / saying – that you prefer to receive the information through a delivery mechanism that you find more convenient than reading a transcript.

    The idea that I am trying to get across is that you are suggesting the impossible. In certain areas that are extremely important, the capacity of the written word is vastly greater than can be expressed orally. Just as in certain areas the spoken word is vastly superior and meaningful than the same words written on a piece of paper.

    [MORE]

    I also understand and share your frustration with the 10,000-plus words of the transcript – but that is not because of the written format – it is because it is for the most part meaningless gibberish.

    Almost two decades ago I read a collection of 16 antiquarian law dictionary / encyclopedia sets comprised of a total of about 30,000 pages. In my well-considered opinion, this following is the single most important and explanatory definition that I encountered:

    “A “systematized delusion” is one based on a false premise, pursued by a logical process of reasoning to an insane conclusion ; there being one central delusion, around which other aberrations of the mind converge.” Taylor v. McClintock, 112 S.W. 405, 412, 87 Ark. 243. (West’s Judicial Words and Phrases (1914)).

    Mr. Hudson, like the vast majority of nominal economists, is trapped within a systematized delusion that defines and provides a de facto feedback-loop that can and likely will occupy their minds in perpetuity.

    So what then is the monumental false premise that powers such a thing?

    Actually there several dozen, but at the top of the list is their belief in the existence of some tangible thing called money.

    For the vast majority of people on Earth, or so they believe, the single most important determinant-in-fact of their quality-of-life is money.

    Yet paradoxically, and near inconceivably, most people do not know the first and most important thing about money, and that is that there is no money.

    Everything that people are habituated to think of as money is in fact a derivative-of-money. There are promises-to-pay money, there are orders-to-pay money, there are various kinds of evidence (exchangeable-evidence-of-debt) that one party owes money to another party, and all of the accounts are denominated in money. But there is no money.

    Just as we could have a fully functional otherwise duplicate of the existing system but denominated in unicorn-horns instead of dollars, euros, yen, rubles and yuan. There are no unicorn-horns in fact, but that does not matter because there doesn’t have to be.

    The real problems start when the public is deliberately and systematically induced to believe otherwise, and when law or government-policy provides for it to make a difference depending on who you are.

    I think that the reason I reacted to your comment like a red-flag-to-a-bull is that we possess very different perceptions of the video media.

    I was born with a kind of birth-defect. For whatever reason I do not seem to be able to shut my mind off. To control it and to prevent myself from losing my mind, I have read a book a week for forty years.

    But when it gets really bad I have the option of going into a trance-like state by – you guessed it – turning on a television set. It’s not necessarily the programming – it’s the medium itself. But here again, trying to explain that to someone – anyone – who has not experienced it directly is like trying to explain sight to a blind man.

    In any event, my apologies if you took my comment as personally offensive as such was not my intent.

    If you want the benefit of 30 years of research and over one million pages of reading, then here is a link to what you can do with 10,000 words:

    http://werex.org/a-general-theory-of-financial-relativity/

  55. @sally

    Ah! those “tarty” intellectuals gone public! Their crime on the sly? Forget to mention that there are a zillion ways to cook the books. _These_ “tarty” intellectuals, adding another layer of deceit. Please plaster over any suggestion to a solution to prolong a remnant of society, not comprehension, that one(comprehension) is infinite(at the least five-thousand words plus, as much as the angels of truth with reading glasses can take).

    It is a joy to meet so many, ready to bite the bait. Sell a few more copies of the same, that’s all it amounts to.

  56. @Sparkon

    spot on…afterall, we must move to renewable energy and today I’m trying the meatless chorizo at (((chipotle))), delivered to my door safely by an immigrant refugee of climate change. could have used a side of bugs, but didn’t see it on the menu.

  57. @nsa

    A beauty of literate commenting.

  58. @emerging majority

    You are one of the great ones. Not being cynical. It takes a brain to have some kind of overview. Rare breed you are.

  59. Anonymous[306] • Disclaimer says:

    Consider something:

    They knew they were gambling, the knew they might lose.
    These banks aren’t idiots. They knew that gamblers sometimes lose, and they certainly knew about the 1995 Barings Bank failure

    Barings Bank collapse was brought on by the BFS group starting to trade with its own account. Leeson was attempting to gain from arbitrage spreads between Singapore and Japanese exchanges. The London management and chairman Peter Baring believed that this was extremely profitable and basically risk free trading. The problems arose from Leeson establishing a secret account called 88888 where he began to make enormous bets on Japanese markets.

    At first he appeared to make the company huge amounts of money, including 10 million pounds in 1993 that represented 10% of all the bank’s annual profits. In 1995, the secret account was uncovered, along with losses of 827 million pounds he had wracked up in the name of Barings in only a matter of weeks. Leeson had left a note that said “I’m sorry” in the Singapore office and gone on the run.

    https://www.financial-dictionary.info/terms/barings-bank-collapse/

    10% of annual profits from gambling on derivatives. Think about it. Barings was highly respected, but not highly profitable. Barings was historically a merchant bank, offering bridging loans and the like to commercial enterprises. It apparently decided to augment its core business by highly risky activities that it knew little or nothing about. I maintain that Barings would not have done that unless it saw no other way of remaining competitive and avoiding an eventual takeover.

    I maintain that the same thing happened to Chase Manhattan, Goldman Sachs, and Citibank. They found they weren’t competitive, and tried to make it up with high risk / high return bets. This, as it usually does, succeeded for a time, then failed.

    And this, to me, is the important part: Chase Manhattan, Goldman Sachs, and Citibank found that they were unable to locate modestly high return / moderate risk investments. A bank historically makes its money by investing in capital goods / startup costs that result in a dependable stream of income. Present value of the investment has to be less than the present value of the income stream at present interest rates when the loan is made, and has to remain so throughout the life of the loan.

    What if there are no such loans? Apparently there are very few. Think about what that implies. There are not enough profitable investments to keep our present collection of banks in business, so they are trying to become government supported zombies. Think about what that implies. Think about State Run Enterprises under command economies, and what happened to the societies with command economies. That is the inescapable lesson here.

    • Agree: Miro23
  60. @obwandiyag

    Hell, even I agree with you obwan.

  61. @Achmed E. Newman

    Ask any Chinese you know how many people they know died of Covid. Then ask an American.

    Norton lives in Central America so doesn’t care how the US gov spends its money.

    Bitcoin? Fool’s gold. Governments will never allow its widespread adoption unless they have some control…

  62. JohnT says:
    @restless94110

    It is on video. Look for Ben Norton.

    • Replies: @restless94110
  63. frontier says:
    @Achmed E. Newman

    but something from the later discussions tells me these two are just a couple of Big-Government supporting, yes, Socialist, and anti-all-things-America types

    Yeah, they are old commies, I don’t bother with Hudson anymore.

    I really don’t wanna do this to the fine people here, but Mefobills hasn’t mentioned his “jubilee” yet… LOL

    • Replies: @Achmed E. Newman
  64. The Federal Reserve is not a US government organization. They like having people think that they are a US governmental entity. It may be a shadow government organization.

    Who sits in the Fed Chair matters about the same as who sits in the Oval Office. The puppet masters make the important decisions.

    The employees are not Civil Service. They have GS grade levels, as if they are government employees. No OPM involvement. No employee rights under Civil Service policies.

    Back when actual paychecks were issued, the NY Fed’s checks were almost identical to USG issued green checks, except the Fed’s were pink and had the Federal Reserve seal.

    Now that I think of it, every payday one received a pink “slip”. Pink sheets carried OTC penny stocks. Using pink was likely a joke from the financial spooks.

  65. @restless94110

    A transcript is a FAR MORE EFFICIENT method of transmission, for people who are able to read at typical intelligent adult rates. You can read a transcript three or four or five or more times as fast as you can listen to the talk.

    • Replies: @restless94110
  66. @JohnT

    If you check the comment thread, you’d find that someone also found the video and embedded it. Just like the person who posted the article (if that was Hudson or not) could have and should have done. That was my point.

    I watched the video, and have commented in a different entry that it was better than other interviews I’ve seen him do, meaning I’m positive about parts of the interview.

    Thanks for your help. But when Michael posts another long interview he does, next time, he might want to take the few seconds to embed the video he knows was recorded of his interview, into his article. If my comment has convinced him to do that in the future, then my work is done.

  67. Trump’s US trade representative, Robert E. Lighthizer, wrote a Wall Street Journal letter to the editor where he suggested that any attempt to blame Trump’s tariffs for recent inflation is a bunch of crud.

    Robert E. Lighthizer in WSJ:

    In “Joe Biden’s Inflationary Trade Policy” (op-ed, Jan. 5), William Walker and Stanton Anderson attempt to blame President Trump’s tariffs as the “real culprit” for President Biden’s inflation. Yet there was virtually no inflation for nearly three years after the Trump tariffs on steel and Chinese goods first went into effect in 2018. What changed in 2021 was massive new government spending and a disastrous new energy policy. That toxic combination—along with excessively easy monetary policy and loads of new regulation—is what caused inflation, not tariffs.

    https://www.wsj.com/articles/trade-inflation-trump-tariffs-consumption-prices-11641745795?mod=e2two

    The QUANTITATIVE EASING highly accommodative monetary policy of the privately-controlled FEDERAL RESERVE BANK is entirely to blame for INFLATION.

    The Federal Reserve Bank is an Organized Crime Syndicate that is using monetary policy to inflate asset bubbles that mainly benefit the billionaires and the top ten percent loot holders. The billionaires and the top ten percent loot holders get the asset price inflation and regular Americans of modest means get the price inflation in housing, food, fuel, and much else besides.

    • Replies: @Mefobills
  68. @J. Alfred Powell

    I disagree. Video is FAR MORE EFFICIENT!!! I can listen to voice inflections and facial expressions and body language, which YOU CANNOT DO WITH A TRANSCRIPT.

    Buddy, lay off the CAPS LOCK. Go read a transcript. I’ll go watch a video.

    P.S., Evelyn Wood got nothing on you.

    • Replies: @Truth Vigilante
  69. annamaria says:
    @emerging majority

    “Those 3 hyper banks who got the big bailouts from the “Federal” Reserve, TRILLIONS OF DOLLARS, MIND YOU, just happen to be among the primary owners of that privately-owned central bank. … the Bank\$ters, combined with their interlocking directorships with Blackrock, Vanguard and State Street, together with unmentionable Crime Clans headquartered in the City of London … also own the mass-media of disinformation.”

    — Thank you for the great synopsis. These entities that you have mentioned are the ones that are itching for a war against Russia and China – because of the latter’s drive towards de-dollarization. Perhaps the only way to stop the approaching apocalypse is to physically eliminate these entities, which would present a proper lesson for the MIC’s war profiteers, warmongers in US Congress, and NATO.

    Can you tell more about “Crime Clans headquartered in the City of London?”

  70. JLK says:

    The increase in money supply is causing inflation.

    • Replies: @Miro23
  71. If you follow the science, than science tells us the universe is inflating into the infinite unknown, therefore MMT should also be inflationary and inflate into unknown multidimensional realities.
    Think of it as a Ponzi/Madoff scheme made just for the usual cast and crew. It’s their version of Grand Theft Auto, where we are the cars and they’re the thefts, police, judge and jurors.

  72. Extremely long and tedious article to answer what is causing inflation. Inflation is the increase in money supply. Consumer prices should go up with money supply according to many PhDs in economics – and since M1 and M2 and M3 have gone through the roof we should have hyperinflation but we are not. Thus that theory is a fail, but the lack of inflation can be attributed to the falloff of velocity.

    M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other liquid deposits, consisting of OCDs and savings deposits (including money market deposit accounts).

    Velocity of M1 has crashed – thus no hyperinflation

    Thus we can conclude the Fed is battling deflation and is keeping CPI above zero with massive increase in the money supply.

    And with the post Covid hysteria we see inflation surging, thus the Fed promises to increase rates, and most analysts feel that the Fed is behind the power curve, they are too slow, the Fed taper is too slow, etc. Taper is a decrease of massive bond purchases by 80 billion a month to 70 billion a month. That means the Fed is still juicing the market by a huge amount. Here is what the Fed says, right from the horse’s mouth:

    https://www.stlouisfed.org/open-vault/2021/november/what-fed-tapering-means
    How Will Tapering Work?

    The first step in the tapering process will be taken in mid-November, when the Fed will reduce the pace of purchases.

    Treasury securities purchases will go from \$80 billion to \$70 billion a month.
    MBS purchases will go from \$40 billion to \$35 billion a month.

    Then, in mid-December, the pace of purchases will be reduced again.

    Treasury securities purchases will go from \$70 billion to \$60 billion a month.
    MBS purchases will go from \$35 billion to \$30 billion a month.

    Goldman predicts the Fed will hike rates four times this year, more than previously expected

    Goldman Sachs expects the Federal Reserve to raise rates four times this year, one more than previously forecast.

    The estimate comes amid rising inflation and a tightening job market.

    Along with the rate hikes, Goldman sees the Fed shrinking its bond holdings soon.


    The implied inflation rate based on 10 year Treasury yields:

    The United State can NOT have hyperinflation like Weimar Germany because the US has a huge bond market that will sell off first, and a central bank committed to fighting inflation (see Paul Volker strategy). Thus we could have stagflation like the 1970s or we could have deflation, where the Fed tightens at this point and the whole bubble implodes causing a massive shift to negative psychology.

    See https://deflation.com/

  73. @restless94110

    ***Apparently Hudson only gives interviews to people who do not know what a video camera is. This is the umpteenth interview that features an ancient method called a “transcript.”***

    You have just admitted you are semi-literate and have a tough time reading a transcript. To you it’s faster to watch an interview than to struggle thru a transcript, but literate people are the opposite. I prefer a transcript that i can skim thru and read what i want. My time is valuable to me.

    • Replies: @restless94110
  74. Good to see Hudson slam bitcoin. It is super-fiat money and is a scam. All cryptos are scams. Put your money in something real like gold or gold mining stocks or land. Housing is usually a good safe haven but right now is way overvalued.

    • Replies: @Showmethereal
  75. @nsa

    Actually, when I clicked on the ‘Agree’ tab, it was not in relation to your remark that Hudson was ‘illuminating’, but what followed thereafter.
    After all, even Blind Freddie can see the malfeasant input of the Zioinist Usury Banking Cartel through their ownership of the U.S Federal Reserve and the other western central banks.

    And, further proof that Hudson doesn’t understand the problem is the bit about the \$778 billion spent on the military when it should have been diverted to social programmes.

    At the end of the day, neither expenditure is warranted as the only thing achieved is further indebtedness and making future generations even more beholden to the Zio cabal through indentured servitude.

    Hudson will never give you the real solution – ie: a massive cull of all levels of government with entire departments abolished.
    That’s because he’s a Big Government statist and all his ‘solutions’ revolve around centralised authoritarian control and reckless government spending.

  76. The 2022 Recession Is Coming! | Jim Rickards

    The real debate is not over what causes inflation, the real debate is whether we will have hyperinflation blowoff or a deflationary collapse. Will the Fed fight inflation like Paul Volker or will the Fed cave to political pressure because of the huge national debt that needs to be reduced in real terms?

    https://duckduckgo.com/?q=inflation+vs+deflation+debate&t=ffab&iar=videos&iax=videos&ia=videos

    This debate is critical because of the massive speculative bubbles in stocks and real estate. Everyone is ‘all in’ expecting a continuation of present trends. But what if the Fed tightens? Will that not cause the bubble to pop? And would that not set off a deflationary trend like 1929?

    https://www.advisorperspectives.com/dshort/updates/2021/12/14/margin-debt-down-1-8-in-november-still-near-record-highs

    https://www.yardeni.com/pub/stmkteqmardebt.pdf

  77. How big is the stock bubble? Well look at this chart, it is epic, and if it pops it could be the biggest crash of all time.

    “The Largest Market Crash Will Burst In The Next Few Months” | Jeremy Grantham

    • Replies: @Yukon Jack
  78. @restless94110

    You’re absolutely right ‘restless’ in that watching someone’s body language whilst they’re delivering their speech, one is better able to assess the sincerity of that individual and their conviction in said remarks.

    If I’m pressed for time and, given the choice, I might choose the written transcript and skim through it. On the hand, if I’m multi-tasking (as is often the case), I can be checking my emails or engaged in another activity while listening to the audio (and occasionally looking at the visuals).

    I’m sure very few of us would disagree that, when subject to a powerful oratory from a gifted speaker, the audio/visual option is always the better route.

    Unfortunately, Michael Hudson is a dullard in his oratorical skills, as indeed he is in his rabid adherence to his Trotskyist influenced (tried-and-failed) economic prescriptions.

  79. @Yukon Jack

    You wrote:

    Extremely long and tedious article to answer what is causing inflation.

    That concisely sums up who Michael Hudson is.

    MH subscribes to the maxim:’Why state in simple terms what can be expressed in a long-winded and excessively verbose way?’

    Thanks also for your graphic representations in this comment (and subsequent comments of yours), that clearly demonstrate the cause of the inflation we’re now experiencing.

    You’re economic literacy is on par with your outstanding grasp of the Manned Moon Landing hoax, as is evident from your commentary in that other thread on UR.

  80. @Mefobills

    Who do you think made up the ranks in the Galicia SS division?

    • Replies: @Mefobills
  81. @obwandiyag

    Yes they want inflation because the middle class especially the white middle class will pay for it and they wish to destroy them. It’s part of the plan. Hudson as usual is clueless (intentionally?) about what’s going on however. The banking scandal that will not be told is pretty simple: Jews taking care of Jews! And of course the media is owned by the Jews! Bloomberg’s site and data are there for one reason: to protect himself and his friends.

    Nothing to see here Goy. Go back to sleep. We the Jews own it and we will do whatever WE want and all you will pay for it. SUCKERS!

  82. @Mefobills

    Indeed. In addition to purchasing power in an economy – another very important factor is total production of real goods and services. GDP accumulation that are just figures on a spreadsheet or electrons are not real signs of the health of an economy.

  83. @Supply and Demand

    Indeed. The key is not letting the healthcare system be overwhelmed by taking proactive measures. That and actually treat people who have the disease to give their immune system a fighting chance. But like anything in life there are always some exceptions who sadly will pass away.

  84. @frontier

    Thanks, Frontier.

    Jubilee, UGGGHH!

    It worked OK in the Old Testament days because people KNEW it was coming. They could loan money accordingly.

    Just to get ahead on the good Mr. Mefo., how would you feel as a young man who had worked part-time during college, passed on much of the expensive partying and Spring Break trips, driven a beater or nothing, and kept his loan down to \$20,000 while the others rang up \$60-\$80,000 debt having a good old time, when Creepy Joe or the Kamel-toe arranges for Congress to forgive the loans?

    I know EXACTLY how I’d feel: NO more of this responsibility business! It doesn’t pay. I’m not going to be a sucker again, so it’s time to live irresponsibly like the rest. What a way to run a country, huh?

    • Replies: @Mefobills
  85. @Conqueringfools

    I think you are misunderstanding. He is talking from an economist point of view… He is not saying Russia cant defeat Ukraine in a war… Everyone knows that. He is saying the NATO idea that Russia built its military to take over Ukraine is nonsense. Only the US military is built to forcibly take over other countries. And when he is saying money I would believe he is saying the “opportunity cost”. War with NATO is a last resort… There are plenty of better things Russia can do with the money. Kind of like if a kid wants a ten dollar meal and the parent says to buy a \$5 dollar one. That parent can have \$100 in their pocket but they “cant afford” that \$10 sandwich because it is “too expensive”.

  86. @Hang All Text Drivers

    I have admitted only one thing: Many people–including me–prefer video to a transcript. That does not mean I “struggle” to read the written word. It does not mean I am “semi” anything.

    It also does not mean you are better than me because you can read and prefer to read. No one cares that the reason you supposedly prefer to do so is because your time is valuable to you.

    It’s not all about you, boobie. It’s just a simple statement: Michael Hudson, post the video along with the transcript. It’s not about me. It’s not about you.

    Stop wasting your valuable time writing putdowns.

    • Replies: @Mefobills
  87. Mefobills says:
    @Charles Pewitt

    QE is responsible for finance paper “asset” inflation. Not the real economy. Although Hudson goes on to describe some of the leakage into the real economy from the finance sector.

    QE is a composition change in bank reserves. Think of it like two pools of water. One pool of water is used by the general money supply, that is the buying and selling of goods – mainstreet.

    The other pool is only for bankers, and relates to reserves. The reserves pool, or reserves loops as I sometimes call it.

    The pool that bankers used consists of Tbills and “dollars” and if the law is changed, mortgage backed securities, or other assets allowed by Basel rules. What is in reserves has to be highly liquid and secure. Whenever there is a bank stress test, they test the quality of the reserves.

    QE is mostly a SWAP operation. The reserve “pool” had its TBills taken out by the FED, and instead dollars were put in. The SWAP is a composition change, but the overall net position of the private bank does not change. Think of it like your wife taking dollars out of your savings account and putting them in checking, your overall net position did not change.

    It has knock on effects to the real economy, which are: The dollar is held up in value, TBills are held up in value (there appears to be a buyer), and interest rates are driven low.

    QE by the banksters was to protect finance assets in wall street, and world wide reserves (paper mostly in the stock market) and at banks.

    So, the QE was not responsible for inflation, as this money does not really enter into the mainstream money supply (the other pool). All of the trillions of QE has not caused inflation since 2008, despite all the predictions. The ‘predictors” were wrong in the old days because they didn’t understand the bankers shell game.

    Most of the money that enters into the money supply is when YOU YOU YOU YOU go to a bank and take out a loan. It is PRIVATE PRIVATE PRIVATE debts that are responsible for the mainstreet economy. Low interest rates induce you to go out and borrow borrow borrow.

    The other component of debts that represent money in the real money supply is when the government deficit spends.

    In a debt money system, you have to look at debt instruments and where they are, and what are they claiming. The debt instruments can be sucking the main-street money supply down, or they can be adding to it at the moment of hypothecation.

    None of this is taught in economics school, as if debts and money are a neutral veil. The idea is to turn the average sheeple person into a mushroom. This way you don’t know whose hands are in your pocket caressing your testicles, and not for pleasure.

    The QUANTITATIVE EASING highly accommodative monetary policy of the privately-controlled FEDERAL RESERVE BANK is entirely to blame for INFLATION.

    NO. Hudson explains that it is cost push and leakage from the finance sector:

    Norton is also confused on this point:

    We we had you on in early 2020 to talk about the CARES Act, and the so-called bailout, that was, as you said, basically a multi-trillion-dollar giveaway to the financial sector.

    And I believe that’s an addition to the \$4.5 billion in the repo loans that we’re talking about.

    MICHAEL HUDSON: Yeah, that wasn’t the Federal Reserve; that was Treasury spending, not the Federal Reserve. They’re completely separate.

    BENJAMIN NORTON: Exactly. So we’re talking about over \$10 trillion, between the two, over \$10 trillion that went to the financial sector in the span of less than a year, in six months or so, from late 2019 to early 2020.

    Do you think that that is one of the main reasons for the inflation?

    The cares act which was TREASURY money can be thought of as PUBLIC DEBT, which does go into the general money supply. That should have caused inflation, but it didn’t, or as Hudson explained, it went straight into paying down private debts.

    When you pay off a private debt, the money disappears. What comes from nothing returns to nothing.

    Here is Hudson on the CARES act:

    Because the way the Treasury made the payments was to credit either their credit cards or their bank accounts. And that most Americans are overdrawn on their bank accounts, or they owe money on their credit cards.

    And the money went right out of their hands to reduce the volume of debt they had. And essentially, it was a debt repayment to the bank.

    That was what happened to most of the CARES Act. It wasn’t spent on goods and services, and so it wasn’t inflationary. Just the opposite.

    Hudson says it straight up – it is not a monetary inflation:

    It’s not a monetary inflation, except for the financial inflation of housing prices, and the fact that it has created so many multi-billionaires by the Fed’s quantitative easing, that they’ve all created private capital buyout funds, and they’re buying up all the housing and outfitting the owner occupants that want to buy housing, to take over the housing, turn it into rental housing, and charge cutthroat rents to the economy.

    The pea and shell game was made complex on purpose. This is what happens when you allow privateers to own the money power. They scheme and find ways to fleece the public for their own gain.

    One of the issues that people have with Hudson is that he is flying up in the stratosphere with knowledge of how things really work, that normies cannot keep up. Even Paul Craig Roberts has admitted this, that PCR himself had to read up on Hudson to figure out things not taught to him in economics skool.

    Lolbertarians and other neo-liberal (((privateers))) will never admit that the “free market” does not work, because there is no such thing as a free market. There are always scammers looking to self aggrandize.

    • Thanks: Showmethereal
    • Replies: @Truth Vigilante
  88. Mefobills says:
    @restless94110

    I have admitted only one thing: Many people–including me–prefer video to a transcript. That does not mean I “struggle” to read the written word. It does not mean I am “semi” anything.

    Allow me to put a stop to this sort of argument please.

    Humans born after a certain period are a new genus. Electronicus humanus.

    Their brains are actually wired for accessing information visually. These neurons develop early on, especially if Mom gives the kid an I-PAD.

    The college professors that are successful today, do their lectures and video tape them, and then post them to YouTube, or have them available for the kid to download. They also give written assignments in advance and teach verbally (didatic teaching). The written word is no longer enough.

    Auditory, and visual inputs are now required. Electronicus humanus prefer visual inputs to include moving images.

    Montessori schools still produce kids that engage with the written word, so there is that…

    Two inputs visual and auditory are helpful for many to access information, even those who are not electronicus humanus.

    • Replies: @restless94110
  89. Mefobills says:
    @Achmed E. Newman

    Just to get ahead on the good Mr. Mefo., how would you feel as a young man who had worked part-time during college, passed on much of the expensive partying and Spring Break trips, driven a beater or nothing, and kept his loan down to \$20,000 while the others rang up \$60-\$80,000 debt having a good old time, when Creepy Joe or the Kamel-toe arranges for Congress to forgive the loans?

    This is the ole ITS NOT FAIR TO ME argument. I DID EVERYTHING RIGHT. ME ME ME

    ME ME ME.

    Fortunately, there are thinkers who have figured out how to do a jubilee and have it FAIR, so that everybody gets a cut.

    Steve Keen’s method is that X amount of debt relief goes to everybody EQUALLY. That way there is no ME ME ME Kvetching.

    For example, a college student all of his \$10K (or whatever) student debt is erased. The bankers ledger gets erased, too bad so sad for the banker.

    For those who are older and are in a net positive position, and have no debts, they are given a \$10K CREDIT. This credit has to be used to buy STOCK in a company, where said company is in debt.

    The target company MUST use your credit to buy down their DEBT position.

    In other words this whole ME ME ME argument needs to be put to bed. There are plenty of ways to maneuver the debt money system.

    TINA is B.S. There is no other way? There are other ways.

    We actually want young children to enter into a work life while being educated. We want them to own homes that don’t consume their life energy by paying banksters debt service. And we want them to have healthy intelligent children to revitalize civilization.

    Without a debt jubilee we are screwed, because the worst sort of people – mammonites and oligarchs, have seized the reins of civilization.

    Civilization, especially in the WEST, is now polarized toward Creditors, who are making claims on everything.

    Of course, Kamel Toe and Creepy Joe, who are dumber than shit, and captured by finance, will not give a general debt amnesty along the lines of Keen.

  90. @Mefobills

    Allow me to put a stop to this sort of argument please.

    You have failed.

    In the first place, 5 years ago, I spent 5 years earning two degrees. Everything you said about people moving to video instead of writing and reading is completely false. One of the best things (and the most useful) I was taught and trained for in university was how to write academic papers of analysis. A 2nd immense benefit was I was taught the basics of logical fallacies. And there were many more, but you do a lot of writing and reading in university and you are completely off base.

    Another fail on your part is your assumption that certain people of a certain age are somehow born and bred to just look at an iPad or other tablet and that that tablet is video only. Both are completely wrong. I read constantly from my tablets although I do watch video presentations and entertainment.

    And I am 73 years old.

    You best, stop with your theorizing. You got it completely wrong.

    All that is being said here is I, and many people of all ages, prefer to watch interviews rather than read a transcript. Because we prefer it. For the reasons previously given. Hudson should have posted the video as well as the transcript for the simple reason that his words would then reach more people. Pretending that there are different classes of people (readers and non-readers)?

    You get an F in class, bud. Put a stop to your posting.

    • Agree: Truth Vigilante
    • Replies: @Mefobills
  91. Mefobills says:
    @Yukon Jack

    The United State can NOT have hyperinflation like Weimar Germany because the US has a huge bond market that will sell off first, and a central bank committed to fighting inflation (see Paul Volker strategy).

    It was the Reichsbank, returned to Chancellorship control, and under Schacht, that the Hyperinflation was fixed.

    The Hyperinflation in Weimar Germany was caused due to “free market” principles, especially (((international))) currency shorts.

    Not including debt instruments into an analysis of money or economy, is like not putting batteries into your flashlight.

    A debt money banking system isn’t really money, it is bank credit, created at debt. On the other side of the debt instruments are the “credit.”

    Below link is a good synopsis of the hyperinflation. All hyperinflations in modern history are due to exchange rate pressures, with the exception of Zimbabwe. In Zimbabwe, ruling class Negroes killed the production base, the white farmers.

    https://www.wintersonnenwende.com/scriptorium/english/archives/articles/hyperinflation-e.html

  92. Mefobills says:
    @restless94110

    You best, stop with your theorizing. You got it completely wrong.

    It’s not theorizing, it is actually professors (including family members) who have noticed the change.

    Your appeal to authority (your two degrees) does not carry water.

    They have had to adjust to the new reality. I’m sure if we did a broad statistical analysis we would find most professors have noticed that the population is different now than in the past.

    Since you are 73, your brain is probably calcified and cannot adjust.

    People in the past were more accustomed to reading. People today are more inclined to get their information with videos. You even see it in the comment section… where is the video? Take the hint.

    It is probably good that old people with calcified brains die off.

  93. @Hang All Text Drivers

    Yes and it appears central banks are manipulating gold price as they seek to buy it up cheap – as they lessen US dollar holdings. It is certainly safer than crypto.

  94. @Mefobills

    It’s not an appeal to authority. It’s my experience and the experience of thousands of others.

    If my brain is calcified then I would be pushing for transcripts, since people in the past were more accustomed to reading.

    An appeal to authority is you talking mess about people in your family who are professors. Anecdotes are bullshit, bud.

    Keep going, motormouth. Your calcified brain dead comments nominate you for the die off you promote. Do this: get 4 or 5 jabs and you’ll be gone daddy gone.

    We can’t wait. We’ll read about it. On out tablets.

  95. @Mefobills

    Thinking on your two replies, I realized something.

    In comment 1 you are age bashing thinking my comments were coming from a young person.

    In comment 2 you are age bashing now knowing I am an old person. Now in comment 2 I should be part of a die off.

    Yet in comment 1 I am stupid unable to read because I was raised with a tablet in my crib.

    I hereby nominate you for the brain fungus king of January 2022. There are so many like you, but you keep talking and keep exhibiting what has infected so many in your age group over the past few years.

    Congratulations!

    • Replies: @Mefobills
  96. @Yukon Jack

    Jack Dorsey (CEO Twitter) says hyperinflation is coming.

    Cathie Woods (ARKK Hedge Fund manager) says deflation is coming.

    Peter Schiff (market commentator) says high inflation is coming.

    Jim Rickards (Wall Street banker insider) says deflation is coming.

    [MORE]

    —————

    “Hyperinflation is going to change everything. It’s happening,” Dorsey tweeted on Oct. 22. Later, in response to a follower’s follow-up question, Dorsey added that ”[hyperinflation] will happen in the U.S. soon, and so the world.” Jack Dorsey October 2021

    —————
    My comment on another article on Unz.

    How many people actually know we are not just in an epic ‘everything’ bubble, but the biggest pump and dump scam ever? The Fed lowered interest rates to zero, and injected trillions of liquidity with bond purchases, this has caused the biggest runup of equities and now even real estate. Money is seeking a home somewhere where the gain is above the inflation rate. Since regular bank savings interest is almost at zero percent, money has gone into the stock market, and this has fueled even more speculation with margin buying which is now near 1 trillion USD. Thus the Fed has caused the biggest speculative stock bubble of all time. This bubble spread to real estate, which is now higher than the 2006 peak.

    Thus if the pull the rug out now, by aggressively raising rates to fight inflation, the world markets would implode in the most epic bust of all time, and it would further their cause of consolidating wealth in the hands of a few insiders who know the game. It would be the biggest fleecing of the lambs (robin hood traders and newbies).

    https://www.unz.com/article/the-holocaust-of-six-million-jews-in-world-war-i/#comments
    ——————

    Why is pump a dump a factor this time also? Because Jews like to sucker the Goyim into market bubbles then pull the rug out and when the market dumps they buy in at the bottom, and foreclose on all those who got caught in the end of the credit cycle trap – that they engineered with the central bank.

    This happened in 1929, the insiders got out near the top, the public was wiped out, FDR then confiscated all the American private gold and issued irredeemable fiat Federal Reserve Notes. Then in August of 1971 the USA defaulted again when Nixon closed the gold window and ended the post WW2 Bretton Woods agreement where nation states traded dollars as gold. So twice in the past century the Jew run government of Amerika defaulted twice, first on their own citizens then on other central banks and foreign holders of ‘dollars’ (really just FRM script).

    Then we have this insider pervert Klaus Schwab, leader of World Economic Forum, who recently said “you’ll own nothing and be happy”.

    New World Order pervert taking a beach stroll, just so you know who we are dealing with:

    Think about what he said carefully, how are we going to get from owning to not owning? By the great reset he is helping engineer, and the way that is done is exactly the same way they did before, by a pump and dump scam. First the banksters pump by buying trillions in bonds. This leads to mass speculation in the stock and real estate markets – as everyone is sure there’s hyperinflation coming like the 1970’s at a minimum. But at the top of the market (now) they tighten credit, they raise interest rates, they slow QE then stop QE then reverse QE by selling bonds.

    This kills the speculation, first the junk bonds and unicorn startups (not making a profit but borrowing heavily) go tits up first, then the contagion spreads until an outright panic grips the investors who are ‘all in’, leveraged to the hilt, completely convinced the Fed has their back. That commonly held viewpoint by the robinhood traders is not true, as the Fed’s charter is full employment and price stability. Nowhere is the Fed obligated to prop up the stock market like so many think. In fact it was Alan Greenspan who warned of “Irrational exuberance”

    Irrational exuberance is the phrase used by the then-Federal Reserve Board chairman, Alan Greenspan, in a speech given at the American Enterprise Institute during the dot-com bubble of the 1990s. The phrase was interpreted as a warning that the stock market might be overvalued.

    Then we have the famous case of “buy stocks when there’s blood in the streets’, Rothschilds knew a day in advance that Napoleon had lost at Waterloo. The way you get ultra rich is to scoop up stock and bonds at a crash bottom – and with today’s control of the markets, – when you engineer a crash after suckering in the public. And the Jews believe they are destined to own the world, so their religion gives them guilt free pleasure taking you to the cleaners. It is their destiny and yours – to be completely stripped of all wealth and made their slave.

    ‘Fleecing the Lambs’ is a famous stock market book. It should be called Fleecing the Goyim by Jewish Banksters. Make no mistake what I am offering here, a theory as to why the next phase of the market cycle is the engineered crash by the insiders who plan on fleecing the Goyim who they suckered into the market in the past decade. After 2009 they knew the system was broke, so they did a classic pump and dump scam. The dump is due now because everyone is ‘all in”.

    Call it a conspiracy if you want, it’s how they do it to own everything, and when they have their clown gofer boy Klaus Schwab bragging ‘you’ll own nothing’ he is simply mocking you with his knowledge of the scam. All we need is a pin to pop the everything bubble, and the greatest transfer of wealth will then be complete as the pumped up market is dumped into the oblivion of debt default and deflationary crash that makes the Great Depression seem like a Boy Scout outing.

  97. QE Is just theft by another name.

    The stupid and the desperate just stick a gun in your face and demand all your assetts but the “elite” just use the mechanisms of the state to click a few keys and hey presto! your money is worth less and all that value you lost now sits in their pile.

    Its a great system….if you sit at the top and have a whole bunch of apologists to get on the biggest megaphones and tell you -the great unwashed- that this is necessary.

    Well….they don’t even do that now….they just say “look over there….A PANDEMIC, click, click!”

    You don’t fight…you lose.

  98. How close are we to another 1929 stock market panic, like in October 1929? No one knows for sure, but it can start anytime the market has gone exponential then lost its rocket fuel juice from the Fed QE. Fed taper may all that is needed to start the process of the great unwind. Here is some evidence it may be happening right now:

    https://www.investmentwatchblog.com/anyone-who-believes-that-an-entire-generation-can-be-financially-obliterated-with-no-impact-to-their-own-investments-deserves-whats-coming/

    Basically a panic is a shift in psychology from ultra bullish and FOMO (fear of missing out) to Fear Of Losing Everything (FOLE). The way this shift occurs is that each player acts on information they are receiving and as the market makes it’s initial slide fear starts to set in, but then the market usually goes up for a couple of sessions temporarily relieving the fear of loss. But then the market starts down again taking out key technical support levels and moving averages, so many technical traders start selling their positions automatically. This makes the slide worse, and then real fear sets in again and all of sudden it’s like someone yelling FIRE in a crowded theater.

    • Replies: @Yukon Jack
  99. Jerome Powell (top Fed official) tells you directly what the Fed targets: max employment stability and inflation, especially in wages. He does not talk about any Fed role in propping up the stock market like so many Robinhood newbies think.

    Fed’s Powell warns of recession if central bank forced to tighten too much
    12,973 views Jan 12, 2022

  100. JR Foley says:

    Time is due in America for a Black Swan event and all the cast will come crumbling down. 30 trillion Debt–itching for war with Russia —after a really successful campaign against some cavemen in Afghanistan ground USA down for 20 years and 6 trillion and now——take aim—you and the Ukrainians are going to face a Real force this time —

  101. @Mefobills

    Mofo-Bill, demonstrating further proof of his economic illiteracy with this statement:

    So, the QE was not responsible for inflation, as this money does not really enter into the mainstream money supply (the other pool).
    All of the trillions of QE has not caused inflation since 2008, despite all the predictions.

    Of course, the textbook definition of inflation is ‘An increase in the money supply’.

    And, as Yukon Jack has amply demonstrated with the graphs he’s posted, U.S M1 and M2 money supply has gone through the roof.

    [MORE]

    The Zio-owned MSM (like the Mofo) will muddy the waters by pretending that inflation is an increase in the price of goods and services, as measured by the Consumer Price Index (CPI) when in facts the CPI increase is a SYMPTOM of inflation.
    In other words, in accordance with the theory of Cause and Effect, the increase in the money supply comes FIRST and the EFFECT is a rise in various asset classes, goods and services.

    Even on that measure, inflation is at a 50 year high, when measured using the equivalent system employed a few decades ago.
    John Williams (of ShadowStats.com) does the calculations and shows that, although the official U.S rate of inflation is 7%, in fact it is north of 15% when calculated the right way.

    Even a few years ago, when the U.S govt was telling everyone that inflation was around 2%, every man and his dog knew that was B.S.
    Yet Mofo and his messiah Michael Hudson slavishly repeat the official stats.

    The U.S government manipulates the rate of inflation using hedonics and substitution to create an artificially far lower figure, and they’re forced to do that to keep up the pretence of GDP growth.
    You see, if the U.S economy grows by say 5% in nominal terms, one must subtract the GDP deflator (more or less the rate of inflation), to yield the REAL growth rate.
    If said deflator is 7%, then 5% – 7% = Minus 2%. ie: negative growth.

    So they jiggle the GDP deflator lower than the nominal growth rate, so that the difference yields a positive growth figure.
    If the true rate of inflation had been used in the last decade or so, it would’ve shown the U.S economy was in recession for nearly the entirety of the time post the 2008/09 GFC.

    MoFo’s LUDICROUS remark that QE has not caused inflation since 2008, epitomises the bankruptcy of his and Hudson’s voodoo economic beliefs.

    So, when the Federal Reserve creates trillions out of thin air to facilitate QE (Quantitative Easing), where do said trillions go ?

    The U.S government runs chronically irresponsible budget deficits year after year.
    So, for example (these figures are rounded to the nearest trillion), the U.S government budgeted for \$6 trillion in expenditures in its last budget.
    However, it only generated \$4 trillion in incoming revenue from income/corporate taxes, tariffs etc.
    So it had a \$2 trillion deficit.

    It would normally sell U.S treasuries to finance the deficit (short and long dated bonds – predominantly to creditor nations like China, Japan etc), but most countries recognise that the U.S is a bad credit risk and has stopped buying U.S bonds.
    Many, like Russia, have sold off the entirety of their U.S bond holdings and instead opted to top up its reserves with real money. ie: Gold.

    So the Federal Reserve steps in and creates trillions from thin air to purchase said bonds and in the process, to manipulate and SUPPRESS the interest rates (especially on the all important 10 year bond, which is the benchmark from which mortgage and consumer loan interest rates are based on).

    Long story Short:

    1) The QE finances the profligate expenditures of the U.S government and allows the U.S to live well beyond its means (and, seeing as huge chunk of the U.S budget is allocated to welfare, Medicare, Medicaid and all manner of social programmes, not to mention the wages of hordes of government employees, much of this will go into expenditure on a LESSER quantity of goods and services -seeing as the government is paying an increasing number of workers to stay at home during the Covid Psyop).

    In other words: MORE Money chasing FEWER Goods and Services (since fewer people are working and contributing to Output) = Inflation.

    2) QE is also used to purchase Mortgage Backed Securities (MBS’s) which prop up the housing market. Without said trillions used to artificially prop up real estate, the market would implode and we’d have a repeat of 2008/09 – only on steroids.

    3) QE is used to ensure that interest rates are at 5000 year lows. (I’m not saying that 5000 years ago they were this low – they were NEVER even close to these lows).
    The Fed Funds rate at 25 basis points right now.
    Interest rates HAVE to be engineered artificially low because if ever a market rate of interest should return (ie: government stops manipulating market rates), the U.S government would NOT be able to service the interest payments without imploding the economy.

    4) These ultra low rates of a few basis points have enabled companies to borrow trillions to purchase their own stocks in Buy-Backs, which artificially props up the stock market.
    Absent these share buy-backs, and absent these artificially low rates that enable speculators to take huge margin loans to purchase overpriced stocks, the market would collapse in a heap.

    5) In addition to QE being used to buy U.S treasuries and MBS’s, it’s used to purchase municipal and corporate bonds, stocks etc. (Hence propping up the balance sheet of zombie companies and zombie local municipalities that would otherwise have gone bust in a free market).

    Bottom Line: The BULK of the QE does indeed go into the economy and does indeed create MASSIVE INFLATION.
    But, as you can see from what I’ve written above, the bulk of said money DOES NOT trickle down to the 99% and thereby create massive inflationary pressures on the goods and services that Main St spends its money on (although there was more than enough to create double digit inflation as measured by ShadowStats.com and what we ourselves can see with our own eyes).

    The bulk of the QE flooded into those asset classes that the 1% own in abundance (ie: stocks, real estate, top end art, numismatics etc, Bitcoin) and caused MASSIVE INFLATION in these asset classes. (S & P 500 up sixfold since its low in March 2009, NASDAQ up tenfold from it’s 2008/09 lows).

    In other words, the inflation, which has been COLOSSAL, has concentrated in those asset classes that benefit the 1%, and hence further facilitates the biggest transfer of wealth from Main St to Wall St in human history.

    That you Mofo and Michael Hudson ignore this phenomenon, or purposely refuse to focus on it (like the MSM and the Zio establishment), tells us who you’re aligned with.

    Meanwhile, the Libertarians recognise, with every fibre of their being, that the Zionist Usury Banking Cartel owned Federal Reserve is the ROOT of humanity’s problems..

    Have we ever heard Michael Hudson and his literal handful of supporters advocate for something like this (5 min video):

    As Ron Paul said:

    Civilisation advances when you have less power in government.
    We had an example of minimal power in our government [which corresponded to] maximum productivity and a maximum wealth*,

    *Of course Ron Paul refers to the 130 or so years leading up to the formation of the Federal Reserve – a period, universally agreed, to have been as near as any country has ever come to a Free Market/Small Government/Low Taxing/Free enterprise system.

    I’m in Australia and, in the early part of the 20 century, their was a brief period where Australia had the highest per capita GDP on the planet.
    So, what were the conditions that preceded this you may ask ?

    You guessed it – Australia had what was very near to a Free Market/Minimal Government/Low Taxing environment coupled to rugged individualism and the pioneering hard work ethic.

    The sooner we abandon the Big Government/Nanny State Trotsykist/Stalinist authoritarian ‘Five year plan’ mentality that you and Hudson advocate, the sooner we’ll be on the road to prosperity.

    • Replies: @Showmethereal
  102. @Mefobills

    Mofo-Bill wrote, smearing someone who’s his superior in every department:

    Since you are 73, your brain is probably calcified and cannot adjust.

    The irony of it all.

    That a Mofo like you, someone who I’ve repeatedly exposed and humiliated as being a peddler of failed Centralised Big Government Socialist policy prescriptions, should be criticising Mr/Ms Restless, is beyond the pale.

  103. @Truth Vigilante

    The irony is both you and Mefobills are making arguments where both of you are saying things are correct. That is why there are so many schools of thought in economics. When economic systems falter is when they are too rigid in their school of thought (I would say the same of politics too).

    • Replies: @Truth Vigilante
  104. @Showmethereal

    You write:

    That is why there are so many schools of thought in economics. When economic systems falter is when they are too rigid in their school of thought

    There are many schools of economic thought, for the SAME REASON that there are many different theories propagated over who killed JFK, or how 9/11 transpired.

    [MORE]

    That’s because the perpetrators of both events, the same entity that controls the western media and the western financial system, has a VESTED INTEREST in muddying the waters and propagating as many competing theories as possible (each of which appears plausible to the layman by virtue of the books published or the countless professionally made You Tube videos funded by this cashed up entity which can afford to hire various unscrupulous academics and ‘experts-for-hire’ who will swear under oath that their theory is the right one).

    Their is nothing wrong with rigidity in a theory if said theory is the correct one, or at least far closer to being correct than the competing theories.
    Of course, like scientific theories, as new information comes to hand, the previous theory is amended and updated to reflect the new reality. If said previous theory is proven not to work, then it should be discarded in its entirety.
    In this way, we actually have PROGRESS.

    Have you noticed, that in the field of economics, there has been NO forward progress over the last century or so.
    The Founding Fathers had it right (or very close to being right), over 200 years ago and that system created the greatest opportunity for economic advancement for the common man in human history.
    Then, come the 20th century, the U.S/Great Britain (the two most prosperous countries on Earth, the two economies whose systems was closest to unfettered Free Market Capitalism), these countries went into retrograde motion as far as the economic policies they adopted.

    This was no coincidence. This was by design.

    Because the Ruling Elite, the controllers of the western banking system had a vested interest in preventing economic advancement for the working class.
    They wanted a monopoly on power and wealth and, as far as they were concerned, a poor and impoverished proletariat is a COMPLIANT and easily manageable citizenry.

    All I say to you is that you should compare REAL WORLD examples where societies were relatively free, voluntary exchange was minimally interferred with by intrusive government, markets were relatively free, taxes were low and government as a percentage of GDP was minuscule and what government there was, was as localised and decentralised as possible.

    In ALL cases, these societies were the MOST PROSPEROUS on Earth.

    On the other hand, Mofo-Bill advocates for Big Government, centralised control, comprised of layer upon layer of parasitic bureaucracy, establishment of a ‘Politburo’ of sorts, that will lord over us and tell us ignorant rubes how we should run our lives – because we’re too stupid to make decisions on our own.

    Does that system remind you of anything that we’re experiencing now in the western world ? (as in mandated vaccination, vaxx passports, QR codes to track our every movement and every purchase, mask muzzling etc – all for our own good).
    Because, as Mofo and his ilk will always tell you: ‘Government knows best’.

    Nothing could be further from the truth.

    To quote one of the great Libertarians of history, Thomas Jefferson (slightly paraphrased):

    The Government that governs best, is the Government that governs LEAST.

    • Agree: Achmed E. Newman
    • Replies: @Showmethereal
  105. @Truth Vigilante

    The “founding fathers”? Never mind. The US was once highly protectionist and wealth was taxed very heavily. Time and chance happens to all. The unfettered free market capitalism was a myth. It never existed. Europe was so protectionist Americans used to steal intellectual property from Europe. Once everyone goes through their “new frontier” and “wild west” stage – regulations will inevitably come in. That is true of nations and companies.

  106. Jim H says:

    ‘the Fed is not going to raise interest rates this year’ — Michael Hudson

    With all due respect to the eminent Professor Hudson, the Fed Funds futures market — where large institutions including banks place real-money bets — indicates a probable four quarter-point rate hikes in 2022.

    Jamie Dimon of JPMorgan Chase said he wouldn’t be surprised by six or seven hikes.

    Perhaps Professor Hudson was speaking in jest. But the written transcript offers no indication that he was joking.

    If Professor Hudson is serious about no rate hikes this year, he is badly out of touch with the world of finance and the Fed.

    The Fed has flipped hawkish, with Chair Powell making unmistakable remarks to this effect. Therefore, the Fed is not going to jettison its credibility by holding its policy rate at zero.

    Not possible, not conceivable, not going to happen. And you can take that to the bank.

    • Replies: @Michael Hudson
  107. Ron Unz says:

    I’m afraid Prof. Hudson was very unhappy with the extremely rude and disruptive behavior of some of the commenters on this thread, and requested that they be banned from his articles.

    Please note that such personal attacks and gratuitous insults are not acceptable in his discussions, and may result in the comments being trashed or the commenters banned.

    • Replies: @Achmed E. Newman
  108. Fuzzbaby says:

    What could be causing inflation are the people who set the prices of goods and services.
    The people who own and operate businesses.
    These people ensure that whatever goes bad in the economy isn’t going to hurt them.

    • Replies: @HdC
  109. @Ron Unz

    Was this somehow related to the grey-out comments by OneBornFree and Truth Vigilante? I’d thought it was some bug that had to do with the “ignore commenter” feature, one I have never used – I can skim past as well as the next guy.

    • Replies: @Ron Unz
  110. Fuzzbaby says:
    @American Citizen

    Perhaps on the bright side the slovenly carefree people of America who are addicted to materialism and gross over- consumption will be forced to re-think their priorities. Many are irresponsible spenders that waste money on things they don’t need and then whine about 10 cents more for a quart of milk.

    • Agree: showmethereal
    • Replies: @Wokechoke
  111. Ron Unz says:
    @Achmed E. Newman

    Was this somehow related to the grey-out comments by OneBornFree and Truth Vigilante? I’d thought it was some bug that had to do with the “ignore commenter” feature, one I have never used – I can skim past as well as the next guy.

    Yes, all the past comments of banned commenters are now grayed-out and hidden, which will help deter other commenters from getting themselves banned by Prof. Hudson. He was very unhappy with all the personal insults and disruptive behavior.

    • Replies: @Achmed E. Newman
  112. HdC says:
    @Fuzzbaby

    Raising prices does not necessarily increase the profitability of a business. This has to do with the price elasticity of the product being sold.
    For example:
    Gasoline is relatively price inelastic, ie. the sale of gasoline does not vary very much with its price changes because people have to drive to work, go shopping, go to the doctor, etc.
    Liquor, cigarettes, restaurant meals, etc. are relatively price elastic because the sales vary much more with price changes.
    As a consequence, businesses raising prices for price elastic goods and services will see their profitability decrease with increasing prices.
    A monopoly can increase prices and profitability on price inelastic products and services until the hue and cry of the populace compels governments to go on a trust busting spree.
    In a competitive market this is much less possible because the customer can always switch to a lower priced competitor.
    Fact remains that setting a price to obtain maximum profits is an ongoing experiment in many cases.

  113. @Ron Unz

    Thanks for the reply, Mr. Unz. I gotta say, though I’ve been insulted by you a number of times, you take the time to argue logically. I guess this venue is not to Mr.Hudson’s liking, as compared to a classroom lecture in which students have to be respectful due to … big red “F”s.

    Mr. Hudson has great knowledge of the wonky economic details. Perhaps it’s partly due to his feeling he needed to humor the idiot Norton here, but his support for Central Planning/Industrial policy, along with his take on American politics and the real situation in China is just ignorant of reality. Ooops, I’m greying out here … G-LOC, I’m meltiiiing!!

    • Troll: showmethereal
  114. Reaper says:

    Ok article is long there are many talk-talk, but fail to answer to it`s own title:
    “what-is-causing-so-much-inflation”

    1. Inflation is when the circulating currency is increasing.
    Currency is not money. Currency have no value itself, it is just a promise by central banks/ governments someone can buy something for it.

    2. The rising of prices not inflation: it can be a symptom of inflation (among other factors).

    3. Low interest rates will lead to inflation:
    – It provides an environment where there is no reason to hold on currency/ make safe long term investments. Who have currency either will spend it or make risky (expectedly high yield) investments.
    – It encourages loan taking and currency will be spent.

    4. Quantitative easing is a massive inflation as enlarge the circulating currency.

    5. Government spending CAN lead to both inflation and rising of prices, one of those, or none. There is no rule it must lead to either (regardless it often does).

    That is a differentt question of “how to reduce inflation”, and an again different one is the “how to reduce of the rising of prices”.

  115. I agree with your rate hike outlook. I pay close attention to what Jerome Powell says, and he has indeed, flipped to a more aggressive interest rate hikes to stop inflation, and in fact he has said this directly in his last conferences.

    There is a good evidence that the Fed follows the markets, the theory says the Fed adjusts rates up or down depending on where the 3 month Treasury rate is. This is illustrated in the following charts:


    https://www.elliottwave.com/Economy/-/media/DE957CD95B8C4A7DB9CD0653460ACC36.ashx

    https://www.elliottwave.com/Economy/The-Fed-Follows-the-Market-Yet-Again

    Thus, to know when the Fed will raise Fed Funds rate, just pay attention to 3 and 6 month Treasury Bill yields:

    When the Fed Funds is lagging by a few months the market rate change, the Fed will eventually be FORCED to change it’s rates to keep the gap within ~250 basis points.

  116. Reaper says:
    @American Citizen

    The middle class is the main catalyst in the increase of prices.
    For a simple reason: it has large AND wide variety of demands.

    The ultra rich spend much but on a limited variety of goods and services (like luxury).

    The poor cannot spend much at all, and incapable to fulfill large demands.

    If there are no demand for something (or cannot be fulfilled) – eg. something cannot be sold for that price it will:
    1. either decrease (the price fall)
    2. or the one who offers it for that price can/ have the will to withstand the reality: will have minimal sales (income, profit, etc…) -> like the diamond market actually does it

    That called economic depression the kind which often include deflation.
    That is demonized regardless it is natural and should have a cleaning effect (in case certain interventions by state/ central banks/ international organizations DID NOT occur).

    Whenever governments/ politicians/ the financial sector/ economist talk about “saving economy” they talk about: upkeep the status quo (more or less), and improve/ enlarge harmful processes which lead to the (natural) economic depression.

    An example:
    When a government (charities/ etc) do subsidy food prices it is one of the largest REASON of high food prices.
    Government pays (from either public money or loans), and as additional benefit decrease tensions which benefit the ones who actually make high food prices. They get paid, they can sell, and their stocks are safe.
    But all subsidies are the same: when medication gets “cheaper”, when fuel prices are “low”, when loans are “cheap” because government pays a part of it, etc, etc.

    The funny thing is: politicians often win with such promises as:
    – give cheap food for all
    – we will stop the rise of fuel prices
    – cheap (free?) health care for all
    – we will reduce rental prices
    The more funny thing is: IF they have any intent to fulfill such subsidy promises: it WILL lead to price increases.

    So yes the middle class not the solo reason for price increases by spending but by demand.
    When it cries for “reduced tution costs” it cries for government debt and (in reality) price increases.

    Nothing free someone pays for it. Nor will be cheap if low demand not enforce it to be cheap.

  117. @Jim H

    OK, you got me. I MEANT to say that the interest-rate raise would be unlikely to be more than marginal — meaning not enough to bring about the crash of stock and bond prices that people have been warning about.
    My point was to say that the Fed’s job was to inflate the financial markets, not deflate them. I made that statement too strongly. I’m glad to clarify that here.

  118. Thomasina says:
    @restless94110

    “This is the umpteenth interview that features an ancient method called a ‘transcript.’”

    It’s nice to have both video AND transcript, if you can get it. Sometimes I listen to a video, but then want to go back and find something interesting that was said. With a transcript, I can more easily find it; with a video, I might have to listen to the whole thing again. A hard copy is very useful.

    • Thanks: restless94110
  119. Miro23 says:
    @JLK

    The increase in money supply is causing inflation.

    It seems to be rather that increased money supply is causing stock price inflation (an asset price bubble).

    In other words, the FED is creating money and feeding it to their speculator friends.

    The process affects the general public when they are obliged to deal with assets holding speculative potential like housing and energy products. When it eventually devolves into food price speculation then it’s Game Over.

  120. @Yukon Jack

    Here is an update on the Dow Jones Internet Composite, it looks extremely bearish and going into the ‘crash’ phase:

    Here is a daily chart of the October 1987 crash:

    Dot com rise and fall:

    South Sea Bubble:

    Smartest mathematician Isaac Newton invests:

    The current everything bubble is the biggest bubble in the history of mankind. It has gone up in an exponential curve, everyone is now in, and the Fed says it will probably raise the Fed Funds rate in March 2022. Thus the writing is on the wall, and the stock market is poised for an epic crash as FOMO turns into Fear of Losing Everything.

    And if Isaac Newton got fooled by the bubble, I bet many people right now are fooled because they think (incorrectly) that the Fed has their back. But the Fed is not chartered to prop up the stock market, the Fed’s job is full employment and stable prices, so if inflation continues then the Fed will continue to jack rates and Jamie Dimon now says 4-6 times in 2022.
    ——————–

    When will the Fed raise rates according to Fortune magazine:

    My fearless forecast, therefore, is: Inflation accelerates in 2022. Then, the public outcry over skyrocketing prices and the media reports highlighting how prices are decimating the average family’s purchasing power may cause the Biden administration to impose wage-price controls as President Nixon did in 1971 to take the sting out of inflation before his 1972 reelection campaign. Biden could use an executive order if Congress doesn’t give him statutory authority to impose price controls.

    Without price controls, I expect the Fed to raise the Fed Funds Rate, sometime in 2022 and to continue tightening in 2023. Thus, the next recession could begin in the fall of 2023, but no later than a year later. If the recession does not begin on schedule, it only means it has been postponed, not eliminated.

    https://fortune.com/2021/12/09/next-recession-heres-everything-bubble-markets-2021-2022-covid-murray-sabrin/

  121. Smith says:

    It’s not about how many money you print, it’s what you spend on.

    Spending money on stocks and speculation bullshit equal to burning them.

  122. Mefobills says:
    @Rufus Clyde

    I would think they were Poles. But please correct me if I’m wrong.

  123. Mefobills says:
    @restless94110

    Becoming demoralized and unable to uptake new information is a real thing.

    Flinging insults and ad hominems is uncool.

    For example, Simon Patton could never have done his work at Harvard or Yale, as the group think there was a form of demoralization. Their brains were myelin sheathed to the point of calcification.

  124. Wokechoke says:
    @Fuzzbaby

    Americans are not materialists. There would be prettier cities and cars if that were true. No, it’s a sadomasochistic modus vivendi between peoples.

  125. Inflation is caused by the government printing a flood of excess money. That results in a devaluation of all outstanding money held anywhere by anyone. This is, in effect, an across the board, tax on everyone.

    Except real estate, Old Masters, and expensive jewelry owned by the rich. This is why rich people are not concerned with inflation. Valuable stuff retains its value through calamity, especially if it is transportable.

    Because it’s called “Inflation”, it escapes the stench of the word “Tax”.

  126. Publius 2 says:
    @Mefobills

    I know. I’m saying it’s time for everyone to have the courage to speak the whole truth and nothing but the truth, so help us, God.

    Stop letting “the left” control the language.

    For example, woke means “aware of the JQ” since the 1990s. They stole that word.

    They made republicans commie red on election night.

    So tired of it.

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