Wednesday, February 14, 2018

Fwd: Money & Markets

---------- Forwarded message
From: John H

This evening's missive deals with money (i.e., government deficits and debt) and markets (i.e., the financialization of the world).  The first attachment deals with one of my pet peeves, the disheartening fact that very few Americans have any real idea about how our government money works – or, perhaps more accurately, should work – if more people understood that it is no longer a commodity-backed (i.e., gold) currency.  The article deals primarily with the bi-polar attitude of Congresscritters who will one minute lament the overwhelming burden of debt on the American taxpayer and the very next vote for massive federal deficits and astronomical increases in the federal debt. 

People need to understand that there is absolutely no level of federal debt (as long as it is denominated in dollars) which the federal government cannot pay instantly without ever increasing the tax burden on the people.  Furthermore, much, if not most, of the federal debt is owed to us, the American people – think Social Security 'Trust Fund' and Treasury Bonds.  This is the very nature of a sovereign fiat currency which the United States, of course, has.  Until large segments of the American public come to understand this our neoliberal political parties (and yes, they are both equally neoliberal austerity mongers, one is just a bit nicer on the surface than the other) will continue passing off the myth that we cannot afford social safety-net programs while, at the same time, we can easily afford endless wars and bailouts of corporate and financial interests.  Folks, this is a very BIG deal and if you understand it please let your friends and neighbors know how money should be working for them and not against them.  Also included is a link below to an excellent video presentation by Dr. Stephanie Kelton (mentioned in the article) explaining money and debt in a fiat money economy.  If you have not as yet seen it, it is very good and well worth passing on.

The second attachment is for those who really want to understand how financialization has impacted worldwide financial and equity markets and in the process created enormous risks for calamitous, even catastrophic, financial crises which could break out at any time.  These are mostly unregulated operations encouraged by the world's central banks which are a primary source of instability and inequality in our world today; next to, that is, the U.S. predilection engaging is apparently endless elective wars of aggression (in itself a war crime) and decades-long efforts to destabilize and overthrow governments which do not favorably respond to demands to subvert their own national interests to those of global neoliberal corporate and financial capital.

This article is somewhat long and rather technical piece which provides a good preliminary overview of how neoliberal financialization works.  I have also included the usually excellent comments for this article found at the Naked Capitalism site since they in some ways amplify the points made in the piece.  For those interested in some more depth and background, I recommend reading two books by economist Michael Hudson, Finance as Warfare (2015) and Killing the Host: How Financial Parasites and Debt Destroy the Global Economy.

Stephanie Kelton on Money and the Economy, 2014

Happy Valentine's Day!


Why is it easier to imagine the total destruction of mankind, from nuclear war to a climate catastrophe,
than to work on changing the system of relations spawned by neoliberal capitalism?

Pepe Escobar

No comments: