AK: Hello everyone. Welcome back to my channel. I see we are live already, perfectly on time, with a Swiss Precision today, because I have fantastic guest – Mr. Michael Hudson, who has been recommended to me by the one and only Andre Marciano who said, Ania, you have to talk to Mr. Hudson, so here he is. I’m very grateful to welcome Mr. Hudson, who is a professor of Economics at the University of Missouri Kansas City, political consultant, commentator and journalist. He’s also a Wall Street Financial analyst, and the president of the Institute for the Study of Long-Term Economics, as well as a prolific author of, I don’t know exactly of how many books, but at least 11; I believe is correct yes? So welcome to my channel Mr. Hudson. Is it okay if I call you Michael?
MH: “Sure”
AK: Thank you so much for finding time to join us and I just want to say hello to everyone who will be watching us today. If you have any questions during our live stream, and if Michael has time, I will try to ask your question.
So, I would like to start with something that I’m very interested in. I’m coming to understand this. In the recent years I had no idea about any of this structure. There is such a thing as the triangle of power as I call it. We have the Vatican, we have the city of London, or I would rather say the crown if that makes sense, and we have Washington. Those three powers, in a way, represented the power over Spirit, over military, and power over money. However they are all connected financially, and I would like to ask you this: how strong is this concept really? This collaboration is going on at this moment. Who really, in your opinion, holds the most power in that triangle to influence and sponsor those wars? Then I will have one more question after you answer those two.
MH: “Well, I don’t think that the Vatican has any power at all. It really has nothing to say in this. I’m surprised it’s even mentioned. England has no power. The ending of World War II featured America’s attempt to absorb the British Empire into itself, and basically to prevent England from having any power. That was the whole fight between John Maynard Keynes and the Americans in creating the international monetary fund. Sterling was left overvalued. The British Sterling area was broken up by saying that India and other holders of British Sterling did not have to limit their spending to London and British exports. They could buy American exports or from anyone else. So England is simply a satellite of the United States. All the power is basically held by the US state department and the CIA in conjunction with Wall Street, but not necessarily representing the economic interests of Wall Street. I would say that the neocons are almost their own conspiratorial group called The Blob. They’re the people, such as Victoria Nuland, who I think is still in Africa right now, and her husband Kagan, and Anthony Blinken the Secretary of State and Jake Sullivan as the National Security adviser to Biden. So even Washington, Biden and his group are only satellites of this neocon anti-Russian American first idea to impose American control over the whole rest of the world. This is driving Africa, the global South, Latin America, Eurasia, Russia, China, Iran, and the Nares and the whole rest of the world together to defend themselves from this unipolar Washington-centered group, to create an independent World along different lines from those that the United States is using as control.”
AK: Okay, so at this moment as they faced a big challenge in Ukraine. How strong is that part in the United States in your opinion. And where is the dollar heading and how strong is that concept that was existing, because it looks to me like it’s crumbling completely.
MH: “Well, what the United States has realized is that what used to be a military control of other countries by invading, taking over by force can be done without the military, simply financially. So when you say where is the dollar going you really mean, not only the foreign exchange rate of the US dollar against the Russian Ruble and the Chinese RMB and other currencies, it’s the whole system of international organizations, the International Monetary Fund, the World Bank and all of the other International organizations that the United States controls. The dollar is not simply a dollar that you have in your pocket. It’s the whole financial system centralized by the United States that holds veto power in any International Organization it joins. So unlike other countries, the United States is the only country that can veto any organization that it joins and makes sure that it can control them by the way in which it has legally designed these organizations.
Which is why the alternative to the dollar isn’t simply doing your trade in Russian rubles or Chinese RMB. It’s creating a different kind of an International Bank is an alternative to the International Monetary Fund and the World Bank in the form of a BRICS bank. This is an alternative forum for international trade to the International Trade Organizations. The United States not only says that it can veto any organization that it joins but that it doesn’t have to follow any of the rules of the organizations that other people have to follow. The rules based order means that the United States sets all the rules and other countries have no role to play in it.
Take the Ukraine and the International Monetary Fund. Under the IMF’s operating rules – number one, it cannot make loans to a country involved in war. You may have noticed there’s a war going on in Ukraine right now. Number two it can only make loans to a country that it calculates has the ability to repay the loan. There is no way in the world that the Ukraine can possibly pay any of the money that it’s borrowed from the IMF because it’s not going to exist as the Ukraine anymore. The United States says ah yes Ukraine can pay because we are going to ask all of the countries of Africa, Asia, and Latin America to a break off trade completely with Russia, China, Iran and any country that does not join our pressure to make Russia pay all of the money that Ukraine owes to the IMF and to other foreign investors and all of the money that the IMF has paid into the bank accounts of Zelenski and the kleptocrats is now going to be a Russian liability.
And if these countries trade with Russia then America will completely cut them off with sanctions. Well this threat is basically saying we in America will commit economic suicide, if you don’t do what we’re saying. Because if America really cuts off trade and Financial relations with all of the world except its European satellites then how on Earth can a country that is de-industrialized and has run up debt that it itself cannot pay; how on Earth can a country that is thoroughly dependent on other countries now claim to run the whole world as if it were a parasite somehow empowered to suck all of the economic blood out of the rest of the world to somehow sustain its own prosperity. It can’t be done.
So the world is breaking apart. Ostensibly it’s breaking apart financially and against the dollar, but it’s really breaking apart in a sense of a whole new Financial system to juxtapose against the International Criminal Court, to the United Nations itself. That’s what all of these discussions are now. And you’ve seen the recent developments in Africa against other colonialism of France and it’s African colonies. And the whole defense against the United States attempt to control all of the key raw materials and Technology of the global South is now elaborated into a fight against the legacy of European colonialism that was absorbed by the United States after World War II.”
AK: So many questions I could ask you from here but I want to ask you this – in a nutshell so what is coming: suffering to the west and prosperity to the east?
MH: “The prosperity of everywhere is going to be impaired by the fact that other countries are going to have to increase their military budgets to defend against the United States. When a country like the United States is committing economic suicide, what it’s really saying is: Well if we’re going down we’re going to bring you down too. So you’re having the United States mount a military threat against the whole rest of the world which forces other countries to devote much of their economic overhead to military spending. You’re seeing what happened in Russia is going to have to happen in Africa and the Asian countries. It’s certainly happening in China. So the United States military buildup is forcing a kind of retaliatory move abroad and there’s going to be terrorism, regional color revolutions to try to break up Russia; to try to break up China; to try to break countries into parts to create domestic kleptocracies. The United States wants to do to Asian countries to African countries and to Latin American countries what it did to Russia in the 1990s. It wants to create a group of client oligarchs and kleptocrats who will somehow take enough control of natural resources, oil, mines, Public Utilities to then sell these resources to Wall Street buyers and to American Financial interests to control these resources financially. Obviously this is not going to be done without a fight and the fight will ultimately have to be settled on the battlefield.
The United States is not really set up for this fight. The amazing thing and what’s new about the United States military today is it wants to declare military war on all other countries without having its own Army; without having its own military draft; without having its own soldiers, but having other countries do the fighting. Other countries means its satellites. You can think of Europe – England, France, Germany the whole European Community as being America’s colonies. These are colonies that, in turn, have themselves been colonialists in Africa and Asia. But the United States is trying to use them as part of this sort of army to do the fighting just like at the end of the Roman Empire. Rome hired Germanic tribes, French tribes and Gaulish tribes to do most of their fighting including fighting against Rival generals.
America believes that it can control other countries militarily by fighting, not only to the last Ukrainian, but to let the last Polish fighter, the last German, the last Frenchman, the last Englishman as long as no Americans have to fight and they will fight with arms produced mainly by the United States. Arms which, Andrei Martyanov pointed out, don’t really work very well in the kind of warfare that’s being fought today but arms that do create an enormous Financial profit for the investors in the military-industrial complex. So you’re having an American Army controlling foreign armies; the American Army controlled by generals whose objective is to rise through the ranks to a point where upon retirement they get to join the board of directors of Raytheon or Boeing or other major arm makers. The purpose of war isn’t simply to defeat a foreign population but to use enough arms to generate a trillion dollars per year in military spending of which a large portion is profits to the financial investors in the arms making industries and their Boards of directors.”
AK: Michael, so how can this end in your opinion? Any possibility of ending this ever in the future because it looks like this is a vicious cycle that goes on and on and on….
MH: “That’s the idea. When President Biden said in February of last year 2022. He said that this war in Ukraine is not about Ukraine. This is the beginning of a two-decade war, maybe three decades. He said, this war will go on not only until we defeat Russia, but once we destroy Russia we can then go against our number one enemy China. It’ll take 20 or 30 years for us to uh destroy China and it’s going to take all of our allies an enormous fight of their own Army and their own citizens dying and their own economic resources to support the U.S encirclement and sanctions and its attempt to isolate the Chinese Community along with the entire Shanghai Cooperation Organization: Russia, Iran, Saudi Arabia, the whole rest of the world is to be isolated somehow by the United States without its own Army and without being a creditor anymore and without having its own industrial base. Nobody would have believed a science fiction story that would have said that an economy with all of the liabilities and negative features that the United States had could be any kind of a power at all except being like England after World War II which is the position America is in economically. But what makes America different from England and World War II is America doesn’t have a higher power that’s fighting against it. America is Its Own Worst Enemy fighting against itself instead of other countries fighting against this, so uh you’re having the dynamic of this International conflict that’s dividing the world into two – on the one hand the United States and Europe on the golden billion, “the Garden”, and on the other hand the rest of the two-thirds of the world’s population, the global majority, which America calls “The Jungle” which is to be cut down and clear-cut and privatized for the benefit of “the Garden”.”
AK: Thank you. In one of your interviews you said that you have spoken if I remember correctly, three times in front of the Russian Duma. You had spoken in the Russian Duma and, you know, I’ve been to Russia a few times recently. I love Russia. I grew up being brainwashed to hate Russians. I’m polish originally and when you were there you were addressing the topic of what was the plan of the West towards Russia. Now this was some time ago.
MH: “No, I was discussing how Russia could deal with the kleptocracy that the Americans had put in place and my message on all three occasions was that even when you have kleptocrats taking control of Russian oil, Russian mineral rights and other natural resources, you can recapture it. You can get this back for the Russian government and for the public domain by means of a land tax. I was urging Russia not to adopt the single tax system that was being forced on Russia by the neoliberals. I was urging it to prevent housing prices from exploding by taxing the lands rising rental values. If you do not tax the land’s rental value Russian families are going to have to be forced into debt to the banks to borrow the money to buy their own apartments and all of the money that used to be paid to the Russian state or was paid in the west to landlords will be paid to the Russian banks that the kleptocrats have taken over .So I wanted Russia number one to treat the money and credit system as a public utility as China does. I wanted Russia to keep the money creation and the credit in its own hands.
Number two not to tax its labor or to tax its industry but to recapture what the kleptocrats had taken by a rent tax. If they’ve taken the oil resources then you tax away the whole free lunch that they’ve got from the oil and it doesn’t matter whether they’re the owners as long as all the income from it ends up being paid once again to the government by taxing instead of by direct ownership as before. Same thing with the electric utilities that chubias and others took over. You can tax the economic rent that chubias and the kleptocrats received over and above the money that they actually put in the new investment . That’s the only way Russia could have actually funded new construction and begin to build housing for its population, which was the one great lack that Russia had ever since Soviet times when families were all crowded together. The only way that Russia could Finance its own industry and its own development. In practice has been done on an informal level by insisting that the kleptocrats act as if they their oil revenues and their mineral revenues are used for public projects.
But I wanted to make it formalized and this in fact was precisely what the great fight in Europe was for socialism in the 19th century; for free markets – the fight of Adam Smith and John Stuart Mill and Marx himself was that you have to get rid of feudalism. The United States wanted to re-introduce feudalism to Russia. It wanted a client oligarchy, it wanted to put in Russia what it had put in Chile under the kleptocrats under Pinochet. It wanted to create new landlords, a new financial class but instead of really a landlord class that wanted to create a banking class as the new feudal Lords controlling Russia. I was trying to help Russia avoid that plan and I brought over the former Attorney General of the United States Ramsey Clark ,I brought over a whole group of people to address the dirt in the Duma. Needless to say we didn’t have a chance because we didn’t have the billions of dollars of bribery that the United States was able to use to bribe the most corrupt Russians that it could find to put in power as its client oligarchy.”
AK: Thank you so much. Now, when you look at Russia, how do you see it? How do you see their financial approach to this entire situation? Do you think they took the right road? What would you do if you were in in their position right now? Do you think they are doing the right thing as they are going forward?
MH: “Everything Russia is doing is on an ad hoc basis that they’re sort of making up as they go along. They’re not making a formal economic and tax system. The financial system has to be part of the tax system itself and the monetary system. And the banks are still largely private. They’re operating as a kind of do-it-yourself, make it up as you go on purely pragmatic grounds that are dictated by the war. So they’re doing what is necessary but they have not yet created a system for what is going to happen after Putin finally leaves. What is going to be the long-term in Russia. You have to have some kind of an economic structure and the structure has not been put in place yet. It remains informal and therefore opaque because I haven’t been in Russia since I was brought over by the former prime minister Medvedev, quite a few years ago.”
AK: Fascinating life you have, Michael ,fascinating truly…Now BRICS, let’s talk about BRICS. Soon there will be a summit in South Africa on 22nd of August. Now will there be just one currency that they will be operating with or different currencies and would it be backed by gold? What does this really mean for the future of any other currencies like euro, dollar, any other currency, even polish Zloty, because there are many countries who still keep their own currency in Europe?
MH: “Right , the only choice right now and for the immediate future is to do trade in their own currencies – they can do currency swaps as you’re saying. One country will exchange its currency with another country and they can deal with them by denominating their trade in their own currency. The problem is what are you going to do for trade and investment that is not in Balance. What do you do when one country borrows currency from another country and it pays in the currency and then it doesn’t have any more? What is going to happen? There is not going to be a new currency for actual trade and spending to go to the store, to buy steel, to buy consumer goods. In order to have a currency that’s used in everyday life you need a political Unity to assign who gets how much of each currency and that’s a long way off. When people talk about an alternative currency to the dollar they’re not talking about a currency for spending at the store or for trade with each other they’re talking about an asset that can only be used among governments to pay money that governments owe each other for their trade and investment in Balance. Something like the international monetary funds special drawing rights or like gold and right now you have almost all countries of the world holding dollars their own currencies and gold, that’s the only choice you have now.
There’s talk about creating a BRICS bank that will not be a bank for Traders and investors and tourists to use it’ll only be a bank creating credit for to evaluate mutual debts among the world, the central banks that are members of the BRICS bank, or the Shanghai cooperation organization or its Associated group. It will be like paper gold. So the idea is to move out of the dollars because if you leave your money in dollars in the form of Holdings of U.S treasury bills or U.S Bond Holdings or even U.S investments in the United States, like Venezuela had an investment in American Oil stations, the United States can simply grab it all. So the dollar is not safe any longer and for other countries even for gold. Germany and other countries after World War II left their gold supply in the United States because there was a war in Europe and they didn’t want their Central Bank to be raided by a foreign army and their gold stolen. But now there is a war and there is a foreign army and it’s the American Army and the American Army told Germany I’m sorry we can’t give you back our gold, there’s a problem. Germany said what’s the problem and the US said the problem is that the gold is gone and they said, well, not really gone. We’ve pledged the gold to hold down the price of gold so that other countries are not going to hold gold as an alternative to the dollar. We’ve lent this gold to foreign gold Traders and special speculative firms and we owe it to them and it’s pledged to them so we can’t give it to you.
So in effect the United States is grabbing the whole world’s gold Supply that’s kept in the New York Federal Reserve Bank and that leaves foreign countries to say well why don’t you give us the gold that you have in Fort Knox is that also pledged? We don’t know and the fact that there are no statistics in the United States is insane. So when you talk about countries holding gold of the gold they have in the United States it isn’t gold that you can actually use because it’s not in your physical possession.
So the question is how are countries going to be able to run trade deficits for instance if they import oil and minerals and raw materials and grain. How are they going to finance this and if there is this artificial paper gold that’s issued by the BRICS bank what’s the value of this paper gold unit going to be? The Russians have suggested that Sergey Gaziano has said “well we’re going to evaluate. We’re going to assign a value to this paper gold and it’s going to be based on a price index of raw materials because so many of the new countries that are joining the BRICS++ group are raw materials exporters so we’re going to create a currency with its own assigned values and it looks like that’s going to be the very limited form of currency not a currency, not money to be spent on by private buyers, by private corporations, by tourists ,but just money for to settle inter-governmental relations.”
That’s where the whole problem lies right now, an agreement between governments or among governments as to how to settle their trade and investment and balances and what do you do with the fact that for the time being Russia and China are going to be the big export Powers; they’re going to be accumulating IOU’s from countries that import oil and import what China and Russia are exporting. How are they ever going to be able to repay us. They can only repay it by becoming more economically independent. And one of the ways they can be independent is not paying the debts that the global South owes to the United States anymore, there has to be a write down of all of the foreign dollar denominated debts owed to American and European bondholders. That write down is going to free the balance of payments of the global South and Eurasia for spending with each other.
As long as they keep the international bond Holdings and debts that they owe in dollars they are not going to have the economic freedom to spend their government money on developing their own economy and they will remain subject to the international monetary fund. You can think of the IMF as a small office in the Pentagon in the basement ,telling other countries what to do as part of America’s military planning. If you’re not going to fight or send your troops to fight with American troops in Ukraine do not send your money to the IMF fund or to the World Bank or to the bondholders of your dollar debts. This International debt is a legacy of America’s colonialism on the global South. So we’re dealing with creating a whole alternative structure to the world economy structure that is not centered on the United States and dependency on the United States but in autonomy by this emerging BRICS++ group.”
AK: With your knowledge I am so honored that you a guest on my channel today. I’m learning so much. I want to ask you about gold specifically .now. Since 1971 when Nixon removed the dollar from the gold standard and then the dollar became backed by debt, no Commodities, no asset ,really they’re just printing money which is the formula in so many countries, now including Poland. I would like to ask you now, as we know the real value of gold that is shown is not the real value. They are fooling people all the time with those numbers. What happens with the dynamic changes with BRICS for example – are we going to have the gold price announced and it will be the new price for gold? The dollar goes down which means the gold’s price goes up, clearly. How is it going to look for precious metals, for gold specifically?
MH : “To answer that question you have to look at what happened when the United States went off gold in 1971. I wrote my book super imperialism in 1972 to describe how going off gold did not hurt America’s position, it actually became America’s new form of imperialism. That was what monetary imperialism was. I thought I explained exactly what has happened for the last 50 years and I thought that my explanation is if you don’t pay in gold for the entire U.S military balance of payments deficit that had depleted this gold Supply with military spending. The question is how is America going to continue to spend abroad as military power without paying in gold now that it won’t and, as you just said, it will pay in IOU’s and U.S treasury bills?
Well, I thought that when I wrote this book on super imperialism and it was translated into Spanish and Japanese and Russian, I thought that I meant to warn the rest of the world about what was happening. But the most of the books were sold in Washington to the CIA and to the defense department and immediately Hermann Khan at the Hudson Institute, a national security Institute, offered me to quadruple the salary that I was getting as a professor at the New School for Social Research in New York and said: “look, why are you hoping to teach students about this? Maybe one of them will somehow become a senator someday but if you leave Academia and join my Institute I’ll take you to the White House next week”. And the defense department gave the Institute an $85 000 Grant for me to explain to the White House and the defense department how monetary imperialism worked. And it’s just as you say you pay with IOU’s, not gold. In order for this to work the United States had to keep the gold price down. Obviously there was an immediate jump from $35 an ounce all the way up to $800 and then further up and today it’s almost two thousand dollars an ounce. Now the question is why is the price of gold only two thousand dollars an ounce. Well the reason, i’m told by former U.S treasury officials, is the United States has said we are going to keep the price of gold artificially down by selling it short or selling it forward. We’re going to keep offering to sell gold in the future. In three months we’re going to sell gold at only say eighteen hundred dollars an ounce and that’s going to hold down the price of gold. We are going to lend this gold to major gold trading Banks and firms that are going to intervene in the financial markets to control and manipulate the price of gold. So apparently all of the gold that America is holding for Europe and South America and Asia has been Advanced to gold trading dealers to artificially hold down the price of gold and throwing all of this gold of other countries central banks and monetary reserves onto the market has held down the price of gold. All of a sudden now that people say there’s no more gold to be offered because it’s not available anymore. Obviously there’s going to be a big jump in the price of gold just like there was in 1971. So we can expect another Quantum Leap in this gold and the question is what are other countries going to do when they realize when US will give us back the gold that our central banks are holding on deposit with you in the Federal Reserve Bank of New York in the fifth sub-basement there. I’ve gone there and I’ve taken the tour of the gold is supposed to be there. Well, the Americans say well I’m sorry we’re not going to pay you that’s because we make the rules that’s what a Rule’s Based Order is. We make the rules as we go along. Then these other countries can say okay you keep the gold we’ll write off all the debts we owe and we’re going to take all of your investments in our countries. We’re Sovereign countries. We’re going to take the U.S oil and European oil investment in this country. They are now our Public Utilities. We’re going to take your mine Investments. They’re now public utilities. All of the dollar debts that are the public infrastructure and electric companies and Roads and ports that you’ve privatized on borrowed with paper dollars we’re going to now take back. We’re going to wipe out the result of financial colonialism by renationalizing what you, the United States with your European satellites have kleptocratically taken away from us. So you’re going to have a whole reorganization of the economies and the question is: now these oil resources and mineral resources and Public Utilities can be used for National Economic growth and now that they don’t owe money to the United States and Europe anymore in the form of their foreign debt Holdings, the money they owe bondholders they can use it for themselves. Well the United States will say: well under international law in the courts that we control because we’re the judges, and I can assure you the international courts, controlled by the United States are just as crooked as the New York real estate state courts and local courts are in the United States. The United States can say well we can grab all of your holdings in this country like we’ve grabbed all of Venezuela’s Holdings in this country and like we’ve grabbed all of Russia’s Holdings outside of its allies. So you’re going to have a whole decoupling of the poison garden of Europe and the United States from the thriving jungle abroad. Now that the jungle is free of the gardeners there will be no more devastation and cross-cutting of their economies.”
AK: Now let me ask you about the digital money. How can people keep their freedom if we are all going digital and actually when I was still in Moscow they announced that Putin signed the documents that Russia will have the digital Ruble. Do you think, what’s happening in Russia now with the ruble. Is it the same form of control as it will be in every other Western Country? How can we exist with that digital control?
MH: ” I cannot answer that question because there’s so many forms of digital control. The United States would like it because it can simply wipe out your account. Last week Wells Fargo Bank in the United States, simply erased the accounts of many people, many of its depositors and that’s checking account holders. Then imagine what would happen if all the money was digital and one day this there was a solar flare that every once in a while the sun has an electric exhaustion and the solar flare wiped out everybody’s Financial electronic equipment. I can’t understand the details of how this digital currency can work so it’s that’s just not my department. I can talk about the geopolitics of it all but I can’t talk about uh how electronically or which electronic form they’re going to use. The fact is all banks right now are digital. I mean the money that you have in your bank account – all of this is kept digitally so I’m not sure what they even mean by digital accounts. It can mean whatever you want it to mean – so right now the word digital money remains to me meaningless.”
AK: All right ,so let me ask you about the debt Jubilee that apparently goes back even 4 000 years. In the ancient Babylon it was the time as you know when you wrote about this in your books as well that ancient Kings would sometimes forgive the debts of people. Do you think we actually will be witnessing something like this in our lifetime?
MH: “It wasn’t just the king who sometimes wiped out the debt. Every new King in Mesopotamia; every new king in Sumer; every new king of Hammurabi’s Dynasty in Babylon. When they took the throne they would wipe out the debt. And there is a simple reason. The Babylonians had an economic model of the business cycle that is more mathematically sophisticated than the models that are taught and used in the west today. The model is very simple and I’ve explained it in my book “Killing the host” and other books. We have the mathematics that are trained to scribes in Babylon in 1800 BC. And the model is quite simple: any debt, interest bearing debt is a doubling time and it grows exponentially x equals y squared that’s the growth of debt But the real economy grows more slowly. It begins to grow and then it tapers off in an s-curve. Now what do you do when the amount of debt grows but the economies grow slower and is unable to pay. What do you do when there’s a crop failure and the Farmers can’t pay the debt. if you did not cancel the debts then you would have all of the land and all of the people’s labor ending up being owed to the creditors. And the Babylonian rulers did not want to see a financial aristocracy develop.
Well today this is exactly what’s happening. In all of the near East you have this the Babylonian debt cancellation, the Clean Slate, taken over word for word in the biblical lands by the Jubilee year of Leviticus 25. You cancel the debts you free all of the bond servants that have been pledged for death and you return the land to Farmers who’d pledged the land and forfeited it for death. Well right today you have, in the U.S economy and in the European economies, you have debt growing much faster than the economy. Well the result is that the debt to GDP and debt to national income is rising for everybody. Families owe much more debt relative to their income; corporations owe much more debt relative to their profits which are all being paid out to the banks. You’re having Finance take over essentially the entire economy.
So what we’re having in the west is not the kind of industrial capitalism that people expected to see in the 19th century. We have instead financed capitalism which is sort of a retreat the bankers and the landlords and the rent seekers have fought back against Adam Smith against John Stewart Mill against Marx and against the Socialists to say well we’re going to re-establish a kind of feudalism that this time it’s controlled by the bankers not the landlords. And that’s what’s happening everywhere. If the debts are not written down and not canceled then countries like Latin America will all be in the position that say Haiti has been in ever since it won its freedom from France in the early 19th century. All of Haiti’s money had to be paid to France in the form of bonds that were sold to bondholders and Haiti ended up never being able to earn its way out of poverty.
Greece had a revolution away from turkey and the Ottoman Empire in the 1820s. It had to borrow money from the Ricardo brothers and the money that it paid it defaulted again and again and again and ended up not being able to develop. The same thing happened around 2015 when you had the crisis of the Greek kleptocrats avoiding paying taxes keeping, I think 25 billion dollars in Switzerland instead of paying the taxes. The result is that Greece had to borrow 25 billion dollars in Euro and because it didn’t wipe out the debt as a result of pressure from the Obama Administration in the United States, Greece ended up being utterly impoverished and has remained impoverished because it had to repay the debt. All of Latin America is impoverished. Argentina which apparently seemed to be the world’s richest country in the 19th century has been absolutely impoverished for a century by its foreign debt; most of which is owned by its own kleptocracy by the way. So if you don’t write down the debt then families corporations and governments are going to pay all of this debt service to the bonds and to the bank loans owed by bondholders in the United States and you might as well become a colony of the United States once again because if you have to pay the debt then all of your national income and all of your personal income and corporate income is going to be paid to bondholders of this US dollar debt. So the Jubilee is a price to be paid for breaking away from American Financial colonialism and American monetary imperialism.”
AK: Thank you, I would like to ask you, there was a bailout in the United States not that long time ago. We’ve experienced bail-ins in Cyprus and in Greece; the banks are collapsing in the United States; not only there but mainly there. Is there a bail in coming for the U.S citizens?
MH: “Nobody can really decide. The banks are not collapsing because in 2008 you had the bank crisis resulting from the fact that the American banking system was built primarily on fraud – namely junk mortgages. 80 percent of the bank loans in America and England are mortgage loans and the mortgages are supposed to be backed by real estate, by housing and by commercial real estate and by the rental income that these properties have. Well, the banks falsified their records. They falsified the ability of the mortgage debtors to pay; they falsified the value of the real estate; and as a result, there was a collapse in 2008. President Barack Obama was elected promising to throw the crooked Bankers in jail and to write down the debts to the actual market price of the homes that Banks had lent money on and to undo the effect of the frauds. Well that was all a lie. Obama was part of the gang that was centered around the former Clinton treasury secretary, Robert Rubin, who worked for Citibank. Obama was a gangster and appointed as Secretary of the Treasury, Tim Geithner, another gangster and essentially you had America taken over by the same kind of financial banksters/gangsters that were known as the seven Bank Barons in Russia in 1994 who controlled the banks and the privatization system. You have basically the financial system that has grabbed everything and Obama instead of writing down the debts evicted seven or eight million American homeowners and the Federal Reserve created nine trillion dollars worth of financial support to the banking system to press interest rates way down near zero and this has led to an enormous huge debt build up including loans to the global South countries that are completely unpayable.
Now what do you do if the amount of debt that you have cannot be paid? Well, obviously my motto is that a debt can’t be paid won’t be paid but the question is how won’t the debts be paid. Either you pay them by losing all of your property and the bankers end up with all of the public domains of the global South, all of their land and public utilities and everything the government holds or you don’t pay the debts and the debts are wiped out? Well, obviously if you’re a sovereign country and you’re really and all countries are supposed to be legally Sovereign countries. They can do whatever tax system they want. They can have whatever laws they want. The countries can save themselves from bankruptcy by saying we’re just wiping out the debt just like in the United States an individual can say well I can’t pay the debt rather than becoming a slave/servant of the bank, I wipe it out and have a fresh start. That’s what these countries can do with the Jubilee. They can say we’re starting all over again. The loans that have been made by the international monetary fund to Latin America, Africa and Asia are just as bad as the loans that it’s made to the Ukraine. They’re bad loans. Bad loans should be the liability of the bad Banker who’s made them. They made a bad business decision. Okay you made a bad loan – it can’t be paid. We’re not going to go bankrupt because you made a bad bank loan. You lose the money – we’re going to live and go forward. So, the question is, is the world going to go forward or is it going to go back into Financial Service and bondage?”
AK: So, last question here is this: as every Empire has fallen in history, would you say that the United States will also be that Empire that has fallen and what will emerge in the world after that? Will we have this collaboration multi-polar world, people trading, different countries strengthening their own sovereign uniqueness ,strengths? Or this will be still the fight? How do you see that future Michael, because you know so much about the history, you know the cycles, what cycle are we in right now ? Where this is heading ?
MH: “Well I’ve just published a book on the collapse of antiquity – why Greece and Rome collapsed. The Roman Empire collapsed because of the grade of its oligarchy. The financial oligarchy. It collapsed because the wealthy oligarchs drove the whole economy into debt; they expropriated the landowners; organized the whole land into huge landed Estates and reduced the population to serfdom. Ultimately the greed of the financial class, according to the Roman historians that spelled it all out, they said they were so greedy, the wealthy Senate leadership, that they bankrupted the whole economy and rather than saving the whole economy they wanted to keep just enslaving and enserfing other people. Almost all empires have destroyed themselves from within. So the Roman historians know say Rome is collapsing, not because of the Barbarian invasions. Our banking class; our financial leadership. We’re The Barbarians. Romans were defecting to the Germans, defecting to the Gauls , defecting to the tribal societies outside of the Roman Garden because they were more equitable. They were fairer. There was a flight from Rome; the population was basically collapsing and the so the Roman army invited in foreign fighters and the foreign fighters ended up just saying well you know we’re going to just take over the economy and the part of Rome that survived was in Constantinople and that’s basically where Christianity survived. Christianity ended in the West in the fourth Century with a Cyril of Alexandria and Saint Augustine that completely got rid of the Lord’s Prayer as it was in the Bible “forgive us our debts” and said no “it’s forgive us our sins”, the sins are sexual sins and egotism for Adam and you get rid of the sins by paying money to the church and we will give you a passport to Heaven – an Indulgence if you pay us. So it’s for the Catholic church and the Christian church a sin was the failure to pay money to the church for them to enrich themselves and what had been the actual Roman Christianity and real Christianity survived in Constantinople in the Eastern Orthodox Church that was then conquered in the Crusades. So, a long story there; so Rome killed itself from within.
And you could say today the United States, by fighting the war, by putting the sanctions on Russia, by destroying the north stream pipeline to Germany, and by America saying we’re going to make sure that if we’re losing our power to control China and Russia and Iran at least we can control our European colonies. We want to make sure that Europe does not go it. We want to prevent Europe from acting in its own self-interest and moving into the China Russia Eurasian orbit so we’re going to cut off all the gas supply and oil supply and fertilizer supply to Germany. We’re going to bankrupt German industry. BASF the German chemical company has already announced a few months ago it’s not going to invest any more money in Germany it’s going to have to move out of Germany. Germany is going to look like Latvia and the Baltics – its population a skilled population, if it wants employment is going to have to move either to the United States or to Russia and China or elsewhere outside of Europe. So you’re having Europe being essentially broke now, just as it was broke by World War I and broke again by World War II and you’re finally seeing the end of Europe is an active force in the world stage. That’s been destroyed by the European colonialism and is being destroyed by the U.S and we’re seeing it finally being snuffed out in the French colonies of central Africa now. and the United States is destroying Itself by imposing sanctions on trade with all the rest of the world. The result is it’s imposing sanctions on itself. It’s stifling the U.S economy that does not produce its own raw materials or its own metals and does not produce its own prosperity and is completely dependent on other countries and is now separating from them so that the rest of the world no longer has to support the United States and Europe. Now that they have destroyed their own economies there’s no way that the rest of the world can afford to pay its dollarized debts and follow international trade and investment rules that favor the United States Financial system that controls U.S trade and investment. The rest of the world can free itself from this economic anchor that is holding its development back and in a way that’s a positive result of the Ukraine War. The Ukraine Wars have given the United States the leeway to hang itself. “
AK: Incredible… Would you be so kind and answered two of my very quick questions because they were just born from what you were saying. Do you think European Union will survive much longer? Or it’s on the brink of collapsing? How will this go with the Euro currency as well for that matter?
MH: “If you believe that countries ultimately are going to act in their economic self-interest then Europe will break up. The Eurozone will break up – it was a disaster from the beginning. The rules written into the Eurozone make it financially dependent on the United States. You have the United States reacting to a depression by running a budget deficit to pump money into the economy. The European constitutions prevent any national government from running a budget deficit of more than three percent of its GDP. This is not enough leeway to pull Germany, Italy, France and other countries out of the depression that the U.S war in Ukraine (which is really the U.S China War) has been causing them. So Europe’s choice is either to remain a U.S satellite, a U.S Colony, or to try to go its own way but it can’t go its own way because it’s already been de-industrialized. German industry cannot be revived without oil and gas from Russia and the United States says no. The European politicians have been manipulated by the United States. European politics since World War II has been manipulated by the United States especially taking over their labor parties and their Social Democratic parties to be traitors to Europe. The European politicians represent American national interests not the national interests of their own countries so the whole European political system the whole EU mechanism has become a means of imposing United States neoliberal policies on Europe and that whole system has to go. But since Europe has let itself be manipulated and twisted by American political interference the only way is to turn Eastward to turn toward Russia China the near East and to turn its back on the United States. So probably England will stay – they would rather be impoverished and starved to death than give up their fantasy of somehow being the little brother of the United States, but the rest of Europe, the non-English speaking Europe, certainly has an option of going its own way. It probably won’t until there’s very substantial emigration of labor, flight capital and a relocation of European industry in Eurasia away from Europe. leaving Europe basically as a kind of Disneyland – a theme park. Tourists will want to go to Europe and they’ll see Germans in their old Lederhausen and quaint costumes doing medieval dances and Europe will be sort of an entertainment zone for Eurasia but not an industrial or a financial power.”
AK: Very heartbreaking but I agree with what you said. My last question is about China. When I look at the map and I see Asia and I see Europe one would think to create the Silk Road we don’t have to do that much really. We have the land we can build this road, we don’t have to cross the oceans we don’t have to go around the planet we have the land – you just build it. They are making constructions in China that people never imagined are possible but yet they exist, planes are landing on the top of the mountain ,yes it’s possible. So Michael, tell me, do you think we will be able to see this Silk Road in the future that will actually connect Europe with Asia with China and there will be the sense of collaboration and trading, the healthy way of doing it? Or do you think it’s not realistic?
MH: ” Well China and the rest of Asia do not need Europe. If you read the speeches of President Putin and Sergei Lavrov you can see a feeling of disgust including disgust with themselves – how could we have ever believed that we could turn toward Europe; how could we ever have thought that somehow we could turn to them for leadership. Look at them – they’ve fallen apart; they’ve turned out to be just puppets of the United States in the same way in which America tried to make Russia a puppet under President Yeltsin. I think of Europe as being run by a whole set of local president Yeltsin’s in charge of Germany, France, Italy, and the other economies, so Asia does not need Europe. Europe has a choice, either it can try to rejoin Asia with the Eurasian land mass or it can simply depopulate and empty out So far the choice of European voters is that we want to empty out. We want to die. That’s what we’re voting for; that’s our Democratic rights. We’re voting to die like Ukraine. We’re voting to pay all of our taxes to give to fight for America’s war against China and we’re willing to be impoverished for America that’s our choice. We realize that our life expectancy is going to go down; we realize that we’re going to be out of work; we realize that suicide is going to go up; we realize that our women are not having children anymore but it’s worth it because we have a dream of America and we’re going to live in this dream that’s our dream and we have a right to commit suicide.
So right now to me it looks like Europe is committing suicide for the foreseeable future. If you want to see what it’ll be like look at Latvia and Estonia since 1990. Look at how they’ve lost 25 percent of their population. They’ve all had to leave. Think of in Poland and how the Polish people were leaving for what the English called polish plumbers. Think of all of the movement of Labor out of the Central Europe. Well now the question is, are you going to have a similar movement of Labor out of Western Europe? Well you’re certainly having an exodus of labor’s employers of European heavy industry outside of Western Europe. If the Employers in heavy industry are going, won’t the skilled labor follow them? Will they follow them to Russia to China to Central Asia to India? Who knows where they’re going to go – but there’s really no future for them in Europe as long as Europe remains an American colony and lets this policy be dictated by the United States through its economic arms of the IMF, the World Bank, the international criminal court and the various United Nations agencies that are controlled by the United States. Europe has a choice. Is it going to join the growing part of the World economy – the global majority – or is it going to stick with the garden, the golden billion, the shrinking minority.”
AK: Yeah I think we will end our life here I am immensely I truly mean it from my heart, immensely grateful for all your knowledge and your time today that you gave me in my audience. What is the best way to support your work besides of course getting your books because all the links are already, there what’s the best way to support your work Michael ?
MH: “Well you can go to my website michael-hudson.com and you can join my Patreon group and have discussions with me on that. So my website, my Patreon group through michael-hudson.com helps. Reading my books will give you the logic behind all of my ideas which I’ve tried to explain in very great detail how the system works and reading them then, you can become part of the fight to help save your part of the world.”
AK: Thank you, thank you so much for coming on today and I hope in the future I will have a chance to connect with you again on my channel.
MH: ” Well I look forward to reading the transcript.”
AK: Thank you thank you so much everyone for watching and I will say goodbye here. Leave the comments down below and all the links to Mr. Michael Hudson you already have in the description box. Bye everyone and thank you
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