Since 2008 you've had the largest bond market rally in history, as the Federal Reserve flooded the economy with quantitative easing to drive down interest rates. Driving down the interest rates creates a boom in the stock market, and also the real estate market. The resulting capital gains not treated as income.
Michael HudsonThat's why Apple, Microsoft and the big information technology companies have kept so much money registered abroad (although in US dollar accounts with a nominal foreign address's owner). They pretend to make their global income in Ireland. They have an office, which could be simply a postal drop box in Ireland, and claim to make all their money there, not in America.
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 HudsonEvery government, from the Obama administration right through to Angela Merkel, the Eurozone and the IMF, promise to save the banks, not the economy.
Michael HudsonI think the Republican tax law is so bad that it almost guarantees a Republican victory, precisely because it's so bad. The seeming irony is that it's so bad that it enables the Democratic Party to think, "A-ha, all we have to do is be the lesser evil.
Michael HudsonWe're still in the collapse that began after 2008. There's not a new collapse, there hasn't been a recovery.
Michael HudsonDebtor countries may postpone the inevitable by borrowing from the IMF or U.S. Treasury to buy out bondholders. This saves the latter from taking a loss - leaving the debtor country with debts that are even harder to annul, because they are to foreign governments and international institutions.
Michael Hudson