Home > Economics, Finance and money > Hudson: we have a problem.

Hudson: we have a problem.

Now, when one economist named Micheal Hudson, starts to warn us of impending woes, we should be concerned.

But when there are two Micheal Hudsons handing out warnings, then we really ought to sit up and listen!

After initially falling for the confusion myself, I was delighted to stumble across this recent piece where the clarification is laid to rest as the two Hudsons exchange views, putting across the rationale for our current economic woes in plain simple language:

Hudson to Hudson

Michael W. Hudson, reporter, and author of The Monster (release date today 6/12/10):

“Getting people to load up on debt required not only crooked tactics, but also changing their attitudes about debt. First, the finance industry stopped calling it debt. Debt meant you were in the hole. You owed. Calling it credit removed the stigma of going into deficit and instead replaced it with a sense that you were being conferred an admirable distinction.”

Michael Hudson, (veteran) economist and author of SuperImperialism:

“Your articles showed how the mortgage brokers and other pilot fish for Wall Street increased debt pyramiding by outright fraud. These sleight-of-hand lending practices at the local level were enabled by junk economics at the highest level.
This wealth creation really was debt creation. That’s what was bidding up real estate prices — just as was the case with leveraged buyouts bidding up stock prices during the takeover wave. And a rising proportion of this debt was ’empty’ debt, without any corresponding real value.”

  1. January 26, 2011 at 5:48 am

    Creating money is creating more claims on pre-existing assets. Using credit so created to create yet more credit is what the financial system does today. Because markets have stopped being simple things where we all go to sell and buy, they are imperfect and depend upon information that has been falsified and delayed in order to defraud, otherwise people would not take on credit as the assets should go up in price commensurate with the credit creation. Eventually however, people stop taking credit as the assets simply do not return enough to service loans even at 1% rates of interest. Then all the information is bad and comes at once! All future consumption is deferred and dedicated to repayment and servicing.

    No wonder the economies are faltering!!!!

    Sell all paper investments and buy materials etc. Even wheelbarrows might be good for when credit cards become refused!

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