The real problem is that we’re still in the
aftermath of when the bubble burst in 2008, that all of the growth in
the economy has only been in the financial sector, in the
monopolies—only for the 1 percent.
And it’s as if there are two
economies, and the 99 percent has not grown. And so, the American
economy is still in a debt deflation. So the real problem is, stocks
have doubled in price since 2008, and the economy, for most people,
certainly who listen to your show, hasn’t grown at all.
So, finally, the stocks were inflated really
by the central bank, by the Fed, creating an enormous amount of money,
$4.5 trillion, essentially, to drop over Wall Street to buy bonds that
have pushed the yields down so high—so low, to about 0.1 percent for
government bonds, that pension funds and investors say, "How can we make
money?"
So they buy stocks. And they borrowed at 1 percent to buy up
stocks that yield maybe 4 percent. But who are the largest people who
buy the stocks? They’re the companies themselves that have done stock
buybacks. They’re the managers of the companies that have used their
earnings, essentially, to push up stock prices so they get more bonuses.
Ninety precent of all the earnings of the biggest companies in America
in the last five years have gone for stock buybacks and dividends. It’s
not being invested. It’s not building new factories. It’s not employing
more people.
So, the real problem is that we’re in a
nonrecovery in America, and Europe is in an absolute class war of
austerity.
hat’s what the eurozone is, an austerity zone. So that’s not
growing. And that’s really what’s happening. And all that you saw on
Monday was just sort of like a shift, tectonic shift, is people
realizing, "Well, the game is up, it’s time to get out." And once a few
people want to get out, everybody sees the game’s up.
Read more: "Casino Capitalism": Economist Michael Hudson on What’s Behind the Stock Market’s Rollercoaster Ride | Democracy Now!
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