A derivative is a bet on whether a stock, or a bond or a real estate asset, is going to go up or down. There's a winner and a loser. It's like betting on a horserace.
Michael HudsonThere are so many currency exchange rate problems that people are buying gold as a safe haven. Right now, gold looks like a safe haven if international exchange rates break down.
Michael HudsonNobody prefers to earn income any more, because that's taxable. Rich people prefer to make capital gains.
Michael HudsonDebt deflation is when there's less money that people have to spend out of their paychecks on goods and services, because they're paying the FIRE sector. Oil going down is a function of the supply and demand of oil in the market. It's a separate phenomenon.
Michael HudsonDeflation is a leakage from this circular flow, to pay banks and the real estate, called the FIRE sector - finance, insurance and real estate. These transfer payments leave less and less of the paycheck to be spent on goods and services, so markets shrink.
Michael HudsonThe real estate interests and banks are in a kind of symbiosis. They're the largest-growing part of the economy. This is the sector that backs the political campaigns of senators, presidents and congressmen, and they use this leverage to make sure that their people dominate the Federal Reserve, Treasury and the federal housing agencies.
Michael Hudson