Quotes from Michael Hudson

Ponzi austerity schemes, just like Ponzi growth schemes, necessitate a constant influx of new capital to support the illusion that bankruptcy has been averted.

The Godfather, Part III (1990): Vincent Mancini: Don Lucchesi, you are a man of finance and politics. These things I don't understand. Don Lucchesi: You understand guns? Vincent Mancini: Yes. Don Lucchesi: Finance is a gun. Politics is knowing when to pull the trigger.

This unique ability of the U.S. Government to borrow from foreign central banks rather than from its own citizens is one of the economic miracles of modern times. Without it the war-induced American prosperity of the 1960s and early 1970s would have ended quickly, as was threatened in 1973 when foreign central banks decided to cut their currencies loose from the dollar, letting them float upward rather than accepting a further flood of U.S. Treasury IOUs.

Debt leveraging is a major reason why the United States and Britain have lost their industrial advantage. Debt-inflated costs for housing, education and other basic needs have priced their labor out of markets abroad and at home.

The euro and the ECB were designed in a way that blocks government money creation for any purpose other than to support the banks and bondholders. Their monetary and fiscal straitjacket obliges the eurozone economies to rely on bank creation of credit and debt. The financial sector takes over the role of economic planner, putting its technicians in charge of monetary and fiscal policy without democratic voice or referendums over debt and tax policies.

Blaming the wolf would not help the sheep much. The sheep must learn not to fall into the clutches of the wolf.

A return to classical bank policy would deem loans fraudulent and annul debts when creditors do not lend with any reasonable calculation of how the debt can be paid in the normal course of economic life. Loans made without such a calculation should be considered predatory. The natural check on such behavior is to permit mortgage debtors to walk away from their homes, free of the debts attached to them, letting title revert to the banks that over-lent.