Now, at a time when there are no serious challenges from abroad to U.S. security or military supremacy, more than 60 percent of U.S. discretionary spending goes to support defense, including the budgets of the Pentagon, Veteran’s Affairs, Intelligence, Energy, and Homeland Security. No other agency in the U.S. government gets as much as 10% of U.S. discretionary spending, and Trump’s current budget calls for cutting the budgets of domestic agencies such as Health and Human Services, Education, and Housing and Urban Development even further.https://www.counterpunch.org/2020/03/25/the-coronavirus-and-the-urgent-need-to-redefine-national-security/
the basic idea is the US has the global currency as the Petro-dollar. So other countries get their bank loans in Dollars and pay for oil in Dollars and so they HAVE to invest their "extra" dollars (trade deficit) BACK into the US Empire. So this means the dollar value stays strong compared to other currencies. The problem now is the Debt Deflation is so high that the FED can't raise interest rates because it could not afford to pay back those "loans" to the US government. So Michael E. Hudson says only if the private debt on citizens is written off - then only could the money be shifted to US government debt increasing. Global debt right now is $250 trillion.
The FED is putting in about 8 times more money then it gets back because of the various means that the FED props up big business. So the FED printed $4.5 trillion since 2008 for propping up Stock Buybacks at low loan rates.
NOW the FED is printing $4.25 trillion to prop up the corporate debt - the Money Market Mutual Funds - that the corporations created to Buy back their Stocks! So when Drumpf/Republicans say Big Business can't use the money for Stock Buy BAcks - that does not matter since the money is going to pay off their loans that big business took out to Buy Back their Stocks already. So it's a huge scam.
The current US debt is about $32 trillion. So now if private debt does not get written off - then people will not be able to afford paying their bills nor afford buying the international trade products. So then other countries will not be investing their dollars back into the US since the treasury bonds are so low and since they won't be able to trade as much (due to less demand from people in the US being so poor). video
So then the US won't be able to fund their military empire of 900 bases in other countries. Meanwhile Mother Nature will make it too hot to grow food at scale - in a few years.
yes indeed. Michael E. Hudson, the expert on MMT, is actually advocating that private debt be wiped out and then the US dollar be created not by private banks but instead by the US government. This is how China maintains their money supply. So the problem in China is lack of demand - so they finance supply side economics but the companies go bankrupt and then China can just cancel the debt.
So the US relies on maintaining monopoly control of the Oil supply - hence the Carter doctrine for the Middle East (the same as the Monroe doctrine for Latin America) - meaning "US interests" is then to have Saudi Arabia by lots of US weapons and then the SAudis reinvest oil profits back into the US. So until recently the amount of Bonds that the Saudis buy - this was kept secret and it's still secret from what I can tell.
So the idea of MMT then is that the US government prints the money - interest free - and then other countries don't buy our bonds but rather they buy oil without dollars and so also they don't take loans in dollars. China has created a global development bank that is as big as the Western World Bank in terms of investment money - only it's not in dollars. So the idea is for China and Iran and Russia to not need to use the US dollar and have their own oil markets not dependent on US-Saudi control of oil.
So yeah MMT requires also then no US global military empire - since currently 60% of discretionary spending is on the military. So to invest in creating jobs for production (and not destruction of war) - that means cutting back the military 900 bases in OTHER countries. So I really don't see how MMT could happen at all. Michael E. Hudson again advocates that the private debt held be forgiven but instead the new bailout is for the FED to "forgive" the private debt and then the taxpayers pay off the bonds that the FED "buys" as loans to the taxpayers.
So the corporate debt is being "forgiven" but in a round about way that just socializes the private profit for the elite as free Welfare money. So there would have to be some huge revolution. China may print their own government money but they still rely on exporting to the US and then reinvesting those dollars into US bonds. So unless China increases their domestic markets and also their own imperial trading markets based on their own currency - then China is tied into the FED dollar scheme indeed. Kissinger for example sits on the board of directors of the Chinese national petroleum corporation, etc. So there is an INTERNATIONAL elite profiting - US corporations make more profits in OTHER countries than the U.S. So yes I just don't see how MMT would be implemented - unless the whole system collapses.
"As the chart below shows, while earnings per share have risen by over 360% since the beginning of 2009; revenue growth has barely eclipsed 50%." https://seekingalpha.com/article/4293859-peak-buybacks-corporate-indulgence-hit-limits
So almost 90% of "earnings per share" since the 2008 Great Crash - was all just FED welfare funny money bailouts as stock buy backs. So then the Bubble Pops and guess what? Just do it all over again! Only this time hide it as Money Market Mutual Fund bailouts of corporate debt. That corporate debt is what funded the Stock Buybacks! Hilarious.
yes it was also democratic legislation that allowed banks to SELL the mortgages into credit default swaps and credit collateral obligations. So then Goldman bet against those bundled mortgages - knowing they would tank. So now the FED bailout since 2008 has been 8 times more than what the private sector has "paid back" from their bailouts. This is not mentioned since the FED bailout has been so expansive - over $4.5 trillion directly and globally the central banks created over $21 trillion in bailout money for big business.
Wall St. has gone up since 2008 due to Stock Buybacks as 86% of the "earnings per share" from low FED loans - next to zero. So NOW the FED is buying up the corporate debt that was used as the stock buybacks. Yes the SCAM continues. US debt is now $32 trillion and global debt is $250 trillion. The real economy is ecology and energy - and is rapidly collapsing due to abrupt global warming http://arctic-news.blogspot.com So this is way beyond the blame game. Mother Nature is taking revenge.
The US relies on the value of the dollar being strong due to other countries forced to both buy their oil in dollars and take out loans and pay back their loans in dollars. So then the US through the IMF/World Bank can impose "structural adjustment programs" to other countries - aka Austerities - as the pillage and extraction system of US Empire (900 military bases in other countries). So then "free trade zones" are set up as slave labor zones. The Current US Debt is at $23 Trillion - to be paid back by US tax payers!! video
As documented here, the U.S. government arms, trains, and funds all variety of oppressive governments, not just dictatorships. The choice to focus on dictatorships in this book was not made merely to shorten the list.
But now with US debt being so high then we can not raise the interest rate on the US treasury bonds. So other countries no longer have any incentive to want to invest in the US dollar via purchasing bonds. Saudi Arabia is supposed to do this but this amount of Bond purchasing is kept secret. The rest of the world is trying not to buy US bonds - but what else is there to do with all the US dollars they get from trade deficits (China, Japan, etc.) The FED announces unlimited purchases of the $4 trillion Money Market corporate debt Bond market
journalist confirms - the $450 business bailout goes to the FED to fund a 10 times leveraged bailout of corporate debt - over $4 trillion dollars - video
Since you can't get blood from rocks - therefore when the profit margin of selling to the US with no return from US bond rates - this profit margin will bottom out. People are organizing to demand better working conditions and pay to survive - despite being under authoritarian military thug rule in Indonesia, etc. It's not the OWNERS of these slave wage factories that will be protesting against losing money to the imperial system. The FED announced $125 Billion PER DAY in QE purchasing of bonds.
Since real wages have not increased in 40 years in the US against inflation - therefore personal savings are at an all time low with 80% of the US having next to no savings. "Averages" try to hide this fact. The bailout stimulus is not any structural change to working conditions in the U.S.
37 million jobs could be lost in the coronavirus crisis and ...
So how will the funny money system work now? So 22 million jobs were lost during the Great Recession of 2008..... This is already deemed to be worse.3 days ago - The scale of job losses is likely to hit unprecedented levels in the ... China, in December and has infected more than 318,000 people worldwide ...
https://www.counterpunch.org/2020/03/25/covid-19-and-the-death-of-connectivity/
Almost 80% of US workers live from paycheck to paycheck ...
Jul 29, 2018 - It has a 'good jobs' crisis – where too much employment is insecure, and poorly paid. ... Simply put, the vast majority of American workers have lost just about all their ... In subsequent decades public employees became organized, too. ... 58 59. If anyone's consumption junkies it's the wealthy of this world.
Covid 19 has killed connectivity, and globalization, hopefully for good.https://www.counterpunch.org/2020/03/23/a-debt-jubilee-is-the-only-way-to-avoid-a-depression/
But the big question is, what will replace globalization as the new “paradigm?”
Critics warn of a creditor collapse and ruinous costs to government. But if the U.S. government can finance $4.5 trillion in quantitative easing, it can absorb the cost of forgoing student and other debt. And for private lenders, only bad loans need be wiped out. Much of what would be written off are accruals, late charges and penalties on loans gone bad. It actually subsidizes bad lending to leave them in place.As I noted previously:
On the same note, our banks are already super leveraged because the worldwide bank capital is only $10 trillion. At the same time, we have a $250 trillion global debt. This means that we have a 1:25 leverage.https://realinvestmentadvice.com/the-disconnect-between-the-markets-economy-has-grown/
The reality is that after 3-massive Federal Reserve driven “Quantitative Easing” programs, a maturity extension program, bailouts of TARP, TGLP, TGLF, etc., HAMP, HARP, direct bailouts of Bear Stearns, AIG, GM, bank supports, etc., all of which total more than $33 Trillion, the economy grew by just $3.87 Trillion, or a whopping 24.11% since the beginning of 2009. The ROI equates to $8.53 of interventions for every $1 of economic growth.So that means there's been a diminishing rate of return on the value of the dollar. Wall St. stocks were expanded in value by Stock Buy Backs funded by the FED "almost free" money. That bubble just popped again because the money had never been invested back into the real economy!! It was hoarded as extreme wealth at the top (fake money)....
So the global central bank stimulus from 2008 was over $21 trillion with the US Fed contributing $4.5 trillion. Now the FED stimulus plus fiscal aid has to be over $3 trillion for the US.
So US debt will then cause the US not to be able to absorb global debt to buy US bonds - and the FED buying bonds will just prop up money for the elite while the real economy is in great depression again.
The real economy is based on Ecology and Energy - and so the increased debt levels indicates a Diminishing Rate of Return of profit from extraction from Mother Nature.
There has been a diminishing rate of return on Energy investments. The oil prices dropping do not matter if it is too hot to grow food at scale. The real economy will keep being destroyed due to the inability to get blood from the rocks of Mother Nature.
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