I’m Bonnie Faulkner. Today on Guns and Butter, Dr. Michael Hudson. Today’s show: The Slow Crash. Dr. Hudson is a financial economist and historian. He is President of the Institute for the Study of Long-Term Economic Trends, a Wall Street financial analyst and Distinguished Research Professor of Economics at the University of Missouri, Kansas City, as well as at Peking University. His 1972 book, Super-Imperialism: The Economic Strategy of American Empire, is a critique of how the United States exploited foreign economies through the IMF and World Bank. His latest book is Killing the Host: How Financial Parasites and Debt Destroy the Global Economy. Due out soon, “J Is for Junk Economics.” Today we discuss in detail the concept of debt deflation; housing, student loan and automobile debt; the oil market; the stock market; negative interest rates; currencies; and the shrinking real economy.
Bonnie Faulkner: Michael Hudson, welcome.
Michael Hudson: It’s good to be here again, Bonnie.
Bonnie Faulkner: You have indicated that as a result of United States and European debt deflation, there is an economic slowdown. First of all, how would you define deflation?
Michael Hudson: There are two definitions of deflation. Most people think of it simply as prices going down. But debt deflation is what happens when people have to spend more and more of their income to carry the debts that they’ve run up – to pay their mortgage debt, to pay the credit card debt, to pay…