Economic Crisis Over? Dr Michael Hudson comments

Karl FitzgeraldCommentaryLeave a Comment

Creative Commons License photo credit: Sepperer Markus | www.weltraumsepp.blogspot.com

We don’t think so. And neither does Dr Michael Hudson in this riveting interview (thanks to Guns and Butter, KPFA radio). Please listen. Forward this on. Hudson sums up the issues behind the credit crunch and the mystery behind the details of the bankers bailout in a damagingly direct manner. The world is at a crisis point. A new economic order is being thrust upon us.

In Australia we have a growing confidence returning to the market. But with Chinese demand slowing, our resource boom is under threat. Reading a Bushite economic advisor one understands why we are in today’s mess. David Hale tells us today that China will grow at 8% because domestic demand is strong. All the world needs is lower taxes.

However in the next paragraph he concedes that housing is in slowdown mode. Can we reflect on that for a second. If apartment prices are dropping by 25% in Guangdong, this flows through to the bank’s balance sheet, where they have to write down the value of their mortgages This infers they have less credit to offer. China’s domestic economy is victim to the same speculative excesses in housing as Australia, China and the rest of the western world. They will follow the US.

Whilst the political system prioritises the bankers over the wider community, land and housing prices will be propped up, meaning we the people have less to spend on food or to save. This prolongs the pain.

We are presently in the eye of the speculative storm. The bankers have been shaken around. They have sped to the front of the neo-handout queue. Soon the effects of high rents will crimp more and more business, sending them to the wall. Unemployment will rise and the people will try to join the neo-handout queue. This trend is increasing daily in America. Soon it will be occurring in China and then Australia.

A dangerous trend is developing. Again policy makers are doing exactly opposite to what the wider community requires.

The Irish Times reports: China acts to boost property sector as figures show sharp drop in growth

The government said yesterday that taxes on house purchases would be reduced and value added tax rebates would be increased for exporters of textiles and machinery.

Thankfully Forbes reveals:

However, the report cited a survey by Sina.com as saying that more than 84 pct of Internet users oppose governments’ efforts to revive the market as they believe such measures will benefit real estate developers by driving prices higher.

Keep thinking beyond the press like the everyday Chinese are.

Unfortunately the new West Australian Liberal government is pandering to the richest people in the nation by cutting Land Taxes. This dangerous reduction in taxes will automatically be pocketed by the land monopolising speculator. Economic law dictates this and will ensure that the looming recession is deeper and longer because we are spending too much on housing and business on commercial property. But hey, the banks love it.

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