2008 All Over Again
http://www.truthdig.com/report/item/2008_all_over_again_20160624/
Posted on Jun 24, 2016
By Chris Hedges
Financial markets in the United States and worldwide face uncertainty and
potential crisis after Britain voted to leave the European Union. (Sparkx
11)
Great Britain's decision to leave the European Union has wiped out many
bankers and global speculators. They will turn, as they did in 2008, to
governments to rescue them from default. Most governments, including ours,
will probably comply.
Will the American public passively permit another massive bailout of the
banks? Will it accept more punishing programs of austerity to pay for this
bailout? Will a viable socialism rise out of the economic chaos to halt
further looting of the U.S. Treasury and the continued reconfiguration of
the economy into neofeudalism? Or will a right-wing populism, with heavy
undertones of fascism, ascend to power because of a failure on the part of
the left to defend a population once again betrayed?
Whatever happens next will be chaotic. Global financial markets, which lost
heavily on derivatives, are already in free fall. The value of the British
pound has dropped by over 9 percent and British bank stock prices by over 25
percent. This decline has wiped out the net worth of many Wall Street
brokerage houses and banks, leaving them with negative equity. The Brexit
vote severely cripples and perhaps kills the eurozone and, happily, stymies
trade agreements such as the Trans-Pacific Partnership. It throws the
viability of NATO and American imperial designs in Eastern Europe and the
Middle East into question. The British public's repudiation of neoliberal
economics also has the potential to upend the presidential elections. The
Democratic Party will orchestrate a rescue of Wall Street if there is a call
for a bailout. Donald Trump and the Republicans, by opposing a bailout, can
ride popular revulsion to power.
"A lot of banks in America and Europe that held their money in Great Britain
just lost 9 percent at current exchange rates," said economist Michael
Hudson when I reached him in New York by phone. "They have probably not
hedged it. There have probably been large Wall Street institutions that made
bets believing that Britain would remain in the European Union. There are
firms and banks, I suspect, which have lost hundreds of billions of dollars.
There is talk of another Lehman Brothers. We don't yet know who it will be."
The Democratic Party, by rescuing Wall Street, will be unmasked as the
handmaidens of the financial elite.
"I expect Obama to do whatever he is told to do by Wall Street," Hudson
said. "He has turned over management of the economy to his campaign
contributors from Goldman Sachs and Chase Manhattan. He does not have views
of his own, other than self-promotion. He wants his presidential library. He
wants to have a big foundation like the Clintons. Most of the population
will oppose a bailout, of course, and he will cry all the way to the bank."
Economies built on scaffolds of debt eventually collapse. There comes a
moment when the service of the debt, as we see in Greece, becomes
unsustainable. More and more draconian austerity measures are imposed on a
captive public to pay banks and bondholders until these measures reach an
intolerable level. The people revolt. The system crashes. This is what
happened in Britain.
The war against international finance, and the array of intergovernmental
systems and institutions used to enforce the predatory beast of global
speculation, has begun. The question is, who will win? Will it be the banks,
which intend to continue to pillage economies? Or will it be popular
movements that will rise up to cancel debt and reinstate economic and
political sovereignty?
Hudson sees the crisis in Europe as, in part, spawned by the U.S.
intervention in the Middle East and the Ukraine.
"If there is anyone who is responsible for the Brexit, it is Hillary Clinton
and Barack Obama," he said. "They destroyed Libya. They turned over Libyan
weapons to [Islamic State], al-Qaida and [Nusra Front]. It was their war in
Syria, where many of these weapons ended up, which created the massive
exodus of refugees into Europe. This exodus exacerbated nationalism and
anti-immigrant sentiment. Clinton and Obama are also responsible for a huge
exodus of Ukrainians. This is all a response to American war policy in the
Middle East and the Ukraine. In central Europe, with the expansion of NATO,
Washington is meanwhile demanding that governments spend billions on weapons
rather than on recovering the economy."
The eurozone prohibits central banks from financing government budget
deficits. Countries in the eurozone have, in effect, surrendered economic
and political sovereignty. They cannot create money to cope with their
budget deficits or pump money into the economy. This, Hudson said, has
"turned the eurozone into a dead zone since 2008."
"The eurozone now shrinks economies through debt deflation," said Hudson,
author of "Killing the Host: How Financial Parasites and Debt Bondage
Destroy the Global Economy." "That is one of the factors that led the
British and the euroskeptic parties to say, 'We don't want to be a part of a
Europe run by banks that impose debt deflation. We want governments that can
create their own money to re-inflate the economy and build economic
recovery.' As long as a country remains part of the eurozone, bankers will
continue to lower wages and wipe out pension funds to pay bondholders. The
Brexit vote reverses this rotten program. There are now calls from the
Netherlands, France and Austria for a similar referendum."
"The debt imposed on countries like Greece can never be paid off," Hudson
went on. "And the intention is that it can never be paid off. The banks use
this inability to pay to insist that governments sell off more and more of
the public domain and privatize. Debt is the lever used to force
privatization. It takes away the power to carry out public investment and
build a public infrastructure.
"Some financial firms, banks and perhaps even governments will now default,"
Hudson predicted. "The French and other European banks will try and pick up
the banking business that operated out of London. There is going to be a
huge loss by British banks. The taxes paid by these firms and banks will
disappear from the British economy. Who is the British central bank going to
create money for in this crisis? Is it going to put money into the economy,
or is it going to pay for a new wave of quantitative easing so the banks can
make up the losses on their bad bets?"
Britain's withdrawal from the eurozone will damage not only the
international banking system, but hamper Washington's aggressive policies
toward Russia and the Ukraine. Britain has served within the EU as an
American proxy. German Social Democratic Party leaders, who have accused
NATO of warmongering, have already called for the lifting of the sanctions
against Russia. And there is a growing reluctance to continue supporting
endless war in the Middle East.
"By breaking with the European bankers, you also ultimately break with the
American domination of Europe through NATO," Hudson said.
"At some point, governments are going to have to put their own populations
and economies above those of predators," he said. "The only question is, how
long it will take the political system to realize the debts imposed on them
by the banks cannot be paid? How long will it take to turn this mathematical
certainty into a political response?"
If the liberal class, embodied by the Democratic Party and bankrupt
socialist parties in countries such as France, continue to serve the
bankers, the right wing will have an easy route to power. This will be true
in Europe and the United States.
Trump, in Scotland, heralded the vote to leave the EU as "a great thing."
"People want to take their country back, they want to have independence in a
sense, and you see it with Europe, all over Europe, and you're going to have
more than just, in my opinion, more than just what happened last night,"
Trump said. "You're going to have many other cases where people want to take
their borders back, they want to take their monetary [policy] back, they
want to take a lot of things back, they want to be able to have a country
again."
Hudson said such a stance could propel Trump and other right-wing populists
to power.
"I can see Trump winning the election if he opposes what I expect will be
the coming bailout of Wall Street," Hudson said. "By the time Obama leaves
office, the economy will probably be wrecked. I see us undergoing a slow
crash. The economy will go down and down and down. If the Democrats give
more money to Wall Street and creditors, if they say the debts have to be
repaid, if they again use government to hand money to the 1 percent, they
will be discredited. Economic chaos always leads to political chaos. The
only way to stop this move to the right is for genuine socialist movements
and parties, such as Podemos in Spain, to organize and challenge the
international banking system and its enablers in the political
establishment. And they need to do it now."
http://www.truthdig.com/ http://www.truthdig.com/
2008 All Over Again
http://www.truthdig.com/report/item/2008_all_over_again_20160624/
AddThis Sharing ButtonsShare to FacebookShare to TwitterMore AddThis Share
optionsShare to Email
Posted on Jun 24, 2016
By Chris Hedges
Financial markets in the United States and worldwide face uncertainty and
potential crisis after Britain voted to leave the European Union. (Sparkx
11)
Great Britain's decision to leave the European Union has wiped out many
bankers and global speculators. They will turn, as they did in 2008, to
governments to rescue them from default. Most governments, including ours,
will probably comply.
Will the American public passively permit another massive bailout of the
banks? Will it accept more punishing programs of austerity to pay for this
bailout? Will a viable socialism rise out of the economic chaos to halt
further looting of the U.S. Treasury and the continued reconfiguration of
the economy into neofeudalism? Or will a right-wing populism, with heavy
undertones of fascism, ascend to power because of a failure on the part of
the left to defend a population once again betrayed?
Whatever happens next will be chaotic. Global financial markets, which lost
heavily on derivatives, are already in free fall. The value of the British
pound has dropped by over 9 percent and British bank stock prices by over 25
percent. This decline has wiped out the net worth of many Wall Street
brokerage houses and banks, leaving them with negative equity. The Brexit
vote severely cripples and perhaps kills the eurozone and, happily, stymies
trade agreements such as the Trans-Pacific Partnership. It throws the
viability of NATO and American imperial designs in Eastern Europe and the
Middle East into question. The British public's repudiation of neoliberal
economics also has the potential to upend the presidential elections. The
Democratic Party will orchestrate a rescue of Wall Street if there is a call
for a bailout. Donald Trump and the Republicans, by opposing a bailout, can
ride popular revulsion to power.
"A lot of banks in America and Europe that held their money in Great Britain
just lost 9 percent at current exchange rates," said economist Michael
Hudson when I reached him in New York by phone. "They have probably not
hedged it. There have probably been large Wall Street institutions that made
bets believing that Britain would remain in the European Union. There are
firms and banks, I suspect, which have lost hundreds of billions of dollars.
There is talk of another Lehman Brothers. We don't yet know who it will be."
The Democratic Party, by rescuing Wall Street, will be unmasked as the
handmaidens of the financial elite.
"I expect Obama to do whatever he is told to do by Wall Street," Hudson
said. "He has turned over management of the economy to his campaign
contributors from Goldman Sachs and Chase Manhattan. He does not have views
of his own, other than self-promotion. He wants his presidential library. He
wants to have a big foundation like the Clintons. Most of the population
will oppose a bailout, of course, and he will cry all the way to the bank."
Economies built on scaffolds of debt eventually collapse. There comes a
moment when the service of the debt, as we see in Greece, becomes
unsustainable. More and more draconian austerity measures are imposed on a
captive public to pay banks and bondholders until these measures reach an
intolerable level. The people revolt. The system crashes. This is what
happened in Britain.
The war against international finance, and the array of intergovernmental
systems and institutions used to enforce the predatory beast of global
speculation, has begun. The question is, who will win? Will it be the banks,
which intend to continue to pillage economies? Or will it be popular
movements that will rise up to cancel debt and reinstate economic and
political sovereignty?
Hudson sees the crisis in Europe as, in part, spawned by the U.S.
intervention in the Middle East and the Ukraine.
"If there is anyone who is responsible for the Brexit, it is Hillary Clinton
and Barack Obama," he said. "They destroyed Libya. They turned over Libyan
weapons to [Islamic State], al-Qaida and [Nusra Front]. It was their war in
Syria, where many of these weapons ended up, which created the massive
exodus of refugees into Europe. This exodus exacerbated nationalism and
anti-immigrant sentiment. Clinton and Obama are also responsible for a huge
exodus of Ukrainians. This is all a response to American war policy in the
Middle East and the Ukraine. In central Europe, with the expansion of NATO,
Washington is meanwhile demanding that governments spend billions on weapons
rather than on recovering the economy."
The eurozone prohibits central banks from financing government budget
deficits. Countries in the eurozone have, in effect, surrendered economic
and political sovereignty. They cannot create money to cope with their
budget deficits or pump money into the economy. This, Hudson said, has
"turned the eurozone into a dead zone since 2008."
"The eurozone now shrinks economies through debt deflation," said Hudson,
author of "Killing the Host: How Financial Parasites and Debt Bondage
Destroy the Global Economy." "That is one of the factors that led the
British and the euroskeptic parties to say, 'We don't want to be a part of a
Europe run by banks that impose debt deflation. We want governments that can
create their own money to re-inflate the economy and build economic
recovery.' As long as a country remains part of the eurozone, bankers will
continue to lower wages and wipe out pension funds to pay bondholders. The
Brexit vote reverses this rotten program. There are now calls from the
Netherlands, France and Austria for a similar referendum."
"The debt imposed on countries like Greece can never be paid off," Hudson
went on. "And the intention is that it can never be paid off. The banks use
this inability to pay to insist that governments sell off more and more of
the public domain and privatize. Debt is the lever used to force
privatization. It takes away the power to carry out public investment and
build a public infrastructure.
"Some financial firms, banks and perhaps even governments will now default,"
Hudson predicted. "The French and other European banks will try and pick up
the banking business that operated out of London. There is going to be a
huge loss by British banks. The taxes paid by these firms and banks will
disappear from the British economy. Who is the British central bank going to
create money for in this crisis? Is it going to put money into the economy,
or is it going to pay for a new wave of quantitative easing so the banks can
make up the losses on their bad bets?"
Britain's withdrawal from the eurozone will damage not only the
international banking system, but hamper Washington's aggressive policies
toward Russia and the Ukraine. Britain has served within the EU as an
American proxy. German Social Democratic Party leaders, who have accused
NATO of warmongering, have already called for the lifting of the sanctions
against Russia. And there is a growing reluctance to continue supporting
endless war in the Middle East.
"By breaking with the European bankers, you also ultimately break with the
American domination of Europe through NATO," Hudson said.
"At some point, governments are going to have to put their own populations
and economies above those of predators," he said. "The only question is, how
long it will take the political system to realize the debts imposed on them
by the banks cannot be paid? How long will it take to turn this mathematical
certainty into a political response?"
If the liberal class, embodied by the Democratic Party and bankrupt
socialist parties in countries such as France, continue to serve the
bankers, the right wing will have an easy route to power. This will be true
in Europe and the United States.
Trump, in Scotland, heralded the vote to leave the EU as "a great thing."
"People want to take their country back, they want to have independence in a
sense, and you see it with Europe, all over Europe, and you're going to have
more than just, in my opinion, more than just what happened last night,"
Trump said. "You're going to have many other cases where people want to take
their borders back, they want to take their monetary [policy] back, they
want to take a lot of things back, they want to be able to have a country
again."
Hudson said such a stance could propel Trump and other right-wing populists
to power.
"I can see Trump winning the election if he opposes what I expect will be
the coming bailout of Wall Street," Hudson said. "By the time Obama leaves
office, the economy will probably be wrecked. I see us undergoing a slow
crash. The economy will go down and down and down. If the Democrats give
more money to Wall Street and creditors, if they say the debts have to be
repaid, if they again use government to hand money to the 1 percent, they
will be discredited. Economic chaos always leads to political chaos. The
only way to stop this move to the right is for genuine socialist movements
and parties, such as Podemos in Spain, to organize and challenge the
international banking system and its enablers in the political
establishment. And they need to do it now."
http://www.truthdig.com/report/item/2008_all_over_again_20160624/
http://www.truthdig.com/report/item/2008_all_over_again_20160624/
http://www.truthdig.com/report/item/2008_all_over_again_20160624/
http://www.truthdig.com/avbooth/item/robert_scheer_and_barbara_williams_talk
_tragedy_fame_and_fortune_20160624/
http://www.truthdig.com/avbooth/item/robert_scheer_and_barbara_williams_talk
_tragedy_fame_and_fortune_20160624/
http://www.truthdig.com/avbooth/item/robert_scheer_and_barbara_williams_talk
_tragedy_fame_and_fortune_20160624/
http://www.truthdig.com/arts_culture/item/fighting_for_peace_and_dignity_at_
hurricane_street_20160624/
http://www.truthdig.com/arts_culture/item/fighting_for_peace_and_dignity_at_
hurricane_street_20160624/
http://www.truthdig.com/arts_culture/item/fighting_for_peace_and_dignity_at_
hurricane_street_20160624/
http://www.truthdig.com/report/item/will_sit-in_make_congress_stand_up_on_gu
n_control_20160624/
http://www.truthdig.com/report/item/will_sit-in_make_congress_stand_up_on_gu
n_control_20160624/
http://www.truthdig.com/report/item/will_sit-in_make_congress_stand_up_on_gu
n_control_20160624/ http://www.truthdig.com/ http://www.truthdig.com/
http://www.truthdig.com/about/http://www.truthdig.com/contact/http://www.tru
thdig.com/about/advertising/http://www.truthdig.com/user_agreement/http://ww
w.truthdig.com/privacy_policy/http://www.truthdig.com/about/comment_policy/
C 2016 Truthdig, LLC. All rights reserved.
http://www.hopstudios.com/
http://support.truthdig.com/signup_page/subscribe
http://support.truthdig.com/signup_page/subscribe
http://www.facebook.com/truthdighttp://twitter.com/intent/follow?source=foll
owbutton&variant=1.0&screen_name=truthdighttps://plus.google.com/+truthdight
tp://www.linkedin.com/company/truthdighttp://truthdig.tumblr.com/http://www.
truthdig.com/connect
