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.” Rooted in Truth.
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#austerity#bailout#barack obama#brexit#democratic party#donald trump#europe#european union#finance#greece#hillary clinton#libya#michael hudson#middle east#nato#neoliberal#populism#recession#republican party#right wing#russia#syria#td-original#ukraine#united kingdom#usa#wall street