How will households repay their record debt, when more than 1.3m a week are still filing for first time jobless benefits? When 24m are still unemployed? When it is clear business will recall workers to jobs very very slowly, when hours of work for those employed will be most part time and temp jobs, when wages will remain mostly stagnant, and when rising prices now taking off will reduce their real wages and real incomes even more?
Meanwhile, as businesses see bond and interest rates now rising rapidly, they too are taking on even further record levels of debt to take advantage of the soon disappearing low interest rates. Will Zombie companies be able to pay back the even greater debt load in progress? Business sectors like commercial real estate, travel, entertainment and big box retail, malls, etc. are candidates for default and bankruptcy as rate levels rise more rapidly.
Recently I was asked to explain by Michael Albert and ‘Revolution Z’ media how Wall St. stock markets work, what’s up with the recent Gamestop bubble, what’s financial speculation, what causes financial instability and crises–and how they are all related to, or unrelated to, the real economy. Presented in simple terms, the interview clarifies for laypersons how the current capitalist financial system functions to make investors ever richer, while the rest of the real economy experiences periodic great recessions, wages stagnate and fall, and the quality and quantity of jobs deteriorates.
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