Intro: I need to begin with a MAJOR caveat and tell you how/why this “interview� happened. I did not plan to interview Michael Hudson. I was listening to a well known Russian economist, Mikhail Khazin, and I was fascinated by what he was saying. I also understood only some of the points he was making. To put it mildly, I am not an economist, and while listening to Khazin did did not take any notes. What I did do is email Michael and ask him a few question by email, just to clarify my own thoughts and marginally better my (rather dismal) “understanding� of economic and their role in the current standoff. With this typical kindness and generosity, Michael gave me some very interesting answers, and he agreed to allow me to turn this into an interview. So, here are the caveats to keep in mind: I might have misunderstood or forgotten what Khazin actually said. So if the question sounds stupid, please blame me, not Khazin! As they say in the USA, this entire topic is way above my pay grade…

Please think of this as an exchange between a young and ignorant student and a college professor and my apologies to the economists out there 🙂

Having said that, here is my exchange with Michael Hudson:

Andrei: Is it true that the USA cannot raise interest rates to lower the inflation rate as this would trigger a cascading series of bankruptcies and cost the Dems the upcoming elections?

Michael Hudson: The Federal Reserve and Treasury painted the U.S. into a corner with its Quantitative Easing to save the banks and brokerage houses after 2008. The policy succeeded in supporting and even raising real estate prices, and providing arbitrage opportunities to borrow at low rates to buy higher-yielding stocks and bonds, vastly increasing the magnitude of financial wealth. This has been especially the case since the pandemic, creating an estimated trillion dollars in “capital gains� (including short term arbitrage) for the wealthiest One Percent.

What seemed to be the financial death trap was the prospect of rising interest rates ending the free lunch of interest-dividend arbitrage, and easy mortgage money. The threat was to reverse the asset-price run-up. We already are seeing that in recent weeks as stocks plunged to reflect the rise in Treasury bond rates.

But by now, 14 years after the Obama bailouts and QE rescue of insolvent banks, a new condition has emerged: a vast sum of private capital seeking to move out of the financial markets. Many of the most astute One Percent is taking their money and running – into private equity and real estate.

The result is that housing prices are soaring as private capital is out-bidding owner-occupant home buyers. While the latter face rising mortgage-interest rates, private capital finds the likelihood for both current rental income and capital gains to be a much better bet than the stock and bond market. The result will not be a decline in real estate prices, but a decline in home-ownership rates as a shift to rental housing occurs. The financial class is becoming the new absentee landlord class.

Lower stock prices will spur a similar private-capital wave of corporate takeovers, posturing as “rescuers� of the economy. The aim will be short-term asset stripping, of course (that is the business plan of private equity), but it will consolidate ownership in the hands of a financial elite. And to the extent that state and local budgets suffer from the downturn, sell-offs of public land and infrastructure also will transfer property and its rent-extracting opportunities into hands – not with borrowed credit but for all-cash, the cash that QE policy and tax favoritism has brought into being in the past 14 years.

So, to the extent that there are bankruptcies, this will have the usual result: consolidation and concentration of wealth ownership. The non-financial economy’s structure is being transformed – under the slogan of individualistic free markets.

Andrei: Is it true that the two digit industrial inflation in the USA cannot be lowered by means or price control, as that would guarantee even more empty shelves and cost the Dems the upcoming elections?

Michael Hudson: The current inflation is not primarily a monetary phenomenon – except for stock, bond and real-estate prices. Raw materials prices, commodity prices and import prices are rising throughout the world. Domestic price controls have no effect on import prices. In theory, they should be able to reduce monopoly prices, but in today’s world the monopolists may simply let shortages develop and wait out the government.

For meat, eggs and other farm produce, the farmers are not receiving higher prices for their crops and produce. The middlemen are gouging out more fees for themselves, thanks to the monopoly position of Cargill et al.

Andrei: Are those who say that the USA cannot export its inflation to other countries by forcing the latter to deflate their currencies and acquire dollars anymore correct?

Michael Hudson: The inflation is global, not stemming from the United States. The U.S. consumer price inflation reflects its dependence on other countries. Import prices are up, not only because of port congestion and supply shortages, but because of global energy prices and the fracturing of world trade into dollar-using and dollar-avoiding economies.

The most problematic U.S. economic problem is debt deflation, not price inflation. Payments to the FIRE sector for debt service, health insurance and housing are taking a rising bite out of family budgets for the 99 Percent as the economy polarizes between an alliance of creditors, landlords and monopolists at the top, and debtors, renters and hapless consumers at the bottom.

I don’t know what Mr. Khazin means by his idea that the United States is exporting its inflation. What do other countries buy from the United States, besides arms and agricultural output, patent-protected drugs and information-technology?

Andrei: Khazin also said that the USA needs to crash the EU in order to force Europe to purchase dollars and US goods and services HOWEVER any semi-real war in Europe will crash the international markets and, therefore, also crash the US economy.

Michael Hudson: This argument does not make sense. Europe does not have enough balance-of-payments surplus to buy dollars to support the U.S. exchange rate – and the U.S. economy does not need dollars from Europe, as it can simply print them (as MMT, Dick Cheney and Donald Trump have shown). And “crashing Europe� would not give it more means to buy U.S. exports. “Old Europe� has let U.S. financial diplomacy turn the euro into a satellite currency imposing austerity on the continent – a kind of financial NATO suicide pact.

Andrei: The Fed overprinted dollars and that there is now no way to get these dollars back out of circulation, thus is there is a high chance of stagflation in the USA by this summer?

Michael Hudson: Most Fed “dollars� are not spent on goods and services, but on FIRE-sector assets. There is indeed stagnation in store for the 99 Percent, from a combination of debt deflation (payments to the rentier class) and a price squeeze for basic needs. This is a structural phenomenon (as discussed above), not one of “the money supply.�

In October of last year I wrote a column entitled “When Exactly Did The AngloZionist Empire Collapse� in which I presented my thesis that the Empire died on 8 January 2020 when the Iranians attacked US bases with missiles and the US did absolutely nothing. Yes, this was the correct decision, but also one which, at least to me, marked the death of the Empire as we knew it.

In that article I made reference to a brilliant book by J.M. Greer’s “Twilight’s Last Gleaming� which I later reviewed here. The main plot of the book is that the US will collapse following a completely unpredictable external military defeat (read the book, it is very well written!).

So my question today is whether the debacle in Afghanistan (not only Kabul!) is such an event or not. Afghanistan is often called the graveyard of empires, but might it even become the graveyard of the last empire?

I will try to answer it below.

First, we are now all bombarded by information from, and about, Afghanistan. Issues like the failure of “country building� are mixed in with bodies falling off US transporters, US Marines sharing one (!) bottle of water with severely dehydrated kids with street whippings. None of that is analytically helpful and it conflates completely different issues. I want to offer a different set of questions which, I hope, might be more helpful:

• Why has the US decided to leave Afghanistan?
• Was that the correct decision?
• Why did Kabul fall so fast?
• Why did such a truly colossal failure in intelligence happen?
• How was the evacuation of US forces actually executed?

These are just a few questions, there are many others, especially about what will happen to Afghanistan next, but that is one I think is too early to tackle and an entirely separate issue anyway.

Let’s take these questions one by one next.

Why has the US decided to leave Afghanistan?

I don’t know why or how this decision was taken. But my best guess is that it is due to combination of the following factors:

• “Bidenâ€� came to power while waving the Woke/BLM/CRT/Homo/etc. agenda which I would sum up as the “Wakanda worldviewâ€� and not liberalism. But at least officially, Biden is a true, peace loving liberal. Since his policies all prove the exact opposite, he tried to “play niceâ€� and do something “liberalâ€�, at least in appearence (and, no, a woke-freak is not really a liberal at all! And neither is a Neocon “conservativeâ€� – these are all lies for the dull).
• “Bidenâ€� also knew that a large part of the Trump base wanted to stop all the wars started by Obama and Co.
• “Bidenâ€� probably thought that if the operation was a stunning success, he would get all the credit, and if it was an abject failure, he would dump it all on Trump (which is exactly what “Bidenâ€� did).
• As for Biden himself, let’s just kindly assume that he has “the right political instinctsâ€� to maybe smell an opportunity here and bless what might have looked to him as a “good planâ€�.

Was the decision to leave correct?

Here, I will catch a lot of flak, but I believe that yes, it absolutely was. In his (actually very bad) speech about the withdrawal, Biden said one very true thing (quoting by memory, so don’t quote this) “those who say that 2 or 5 more years will bring us victory are lying to youâ€� (or something pretty close). Here I agree with him 100% (as far as I can tell, only a real, hardcore Neocon ideologue would openly disagree with this; at least I hope so…).

Not only does the US (or any other country) not have any kind of mandate or responsibility to police the planet, the US is certainly the least competent imperial power ever, in spite of a lot of help from the Five Eyes and its EU lackeys. If you are bad at something, but very good at something else, why persist? The US is a true virtuoso in things like bribing, subverting, economically hurting, politically demonizing, killing undesirable leaders, etc… That is really how the Europeans eventually defeated the North American Native Indians.

The US was founded by and for thugs. Calling them explorers, immigrants, robber-barons or founding fathers makes no difference to their true worldview, their ethos – the seizure of the North American continent was an act of international thuggery on every level. That is, of course, NOT to say good people did not exist then or did not live righteously or, even less so, that anybody in the modern USA has any kind of personal guilt over any of this. Only God can judge them! But unless we forget the true roots of the “American Dreamâ€�, we will end up with a “US Nightmareâ€�.

Of course, some US immigrants at the same time did try to create a truly free society, protected from the kind of vicious abuses so prevalent in the Old World! The Declaration of Independence and the US Constitution and the Bill of Rights (aka the “the Charters of Freedom“) are a monument to both the genius and the worldview of some of the founders of the United States. But good intentions and proclamations are only credible when everybody upholds them for everybody and in each case (not the kind “but this is different, we are democracies after all!� western politicians repeat every time they are accused of hypocrisy)

In the USA, generation after generation of the thugs strengthened their grip power while pushing decent people out of the way (even more so after JFK and 9/11 and other recent events). But that was just a show, a mob “going legal� if you wish.

Thugs have guns, of course, and they can beat the crap out of any civilian. But they can’t fight a military. That is why thugs have gangs, not battalion tactical groups in the first place. Furthermore, as soon as they grow in size, the gangs of thugs try to look more respectable (by purchasing PR campaigns about their “philanthropy� is typical) and less violent. Pretty soon they outsource the violence to others, expandable, lower, gangs.

Sound familiar?

If it does – it’s because it is!

Do I even have to introduce Roger Waters to my readers? Those born in the 1970s-80s all know the name “Pink Floyd� as one of, if not the THE, most talented group in the history of pop/rock music. As for our younger readers, they at least will have heard of albums like The Dark Side of the Moon or The Wall. Then there are the comparatively more recent releases by Roger Waters, like the opera Ca Ira or the hauntingly beautiful and deeply touching Amused to Death.

The very first pop song I ever played on a guitar was “Brain Damage“. I was 12 then. Since, I have played pretty much every song Waters ever wrote. Later, I went into rock (Led Zep style) and, later, into acoustic Jazz guitar duos, but on my Walkman (remember those?), in my room and, later, in my car I always had a full Roger Waters discography. I still do 🙂

Of course, Roger Waters is not only a truly immensely talented composer, his lyrics have also had a huge impact on me. I don’t want to discuss personal issues here, but let’s just say that Roger Waters put in words feelings I was harboring deep inside myself. As a kid, and later an adult, I always though “no matter what, there is ONE GUY out there who not only “gets it� but also feels that which I feel, often very deep inside me: Roger Water’s music and lyrics touched me at my most vulnerable, desperate, frightened, filled with angst and doubt. The fact that both Roger and I lost our fathers very early on and were raised by our mothers probably greatly contributed to “tune� us to a same similar frequency, so to speak. The fact that we were born in a truly terminally insane world (including the Cold War) for sure did!

Last, but not least, I saw how Roger not only wrote about our world, but how he entered the fight against what he calls our “ruling classes� (he is right to use this category, this is certainly a class struggle) even taking on the most powerful and evil gang out there: the Apartheid state of “Israel�. Payback for Roger’s compassion for, and truthfulness about, the plight of the Palestinian people did not go unnoticed by the bad guys. One of these creeps even made a full feature length movie entitled “Wish You Weren’t Here – The Dark Side Of Roger Waters� (in Russian we have a good saying: “this tiny dog must be hugely strong to bark up and elephant!�).

And it is not just the Palestinians, or Julian Assange; any other person who needs protection or a voice to speak up for them – they will find such a voice in Waters. Anyone who has had a chance to hear his masterpiece “Amused to Death� or the “Ca Ira� opera will quickly figure out that Waters is not only an amazing music genius, but also a truly righteous man who followed his conscience when almost everybody sold out and left the battlefield. Bottom line, Waters truly had a huge impact on me, my life and my views. He was also a role model in so many ways.

I think that by now you all see the obvious: I love Roger Waters with all my heart. No point in hiding or denying it, as it is obvious anyway 🙂

And, of course, meeting him one day has been a lifelong dream of mine. Then, in May, I got an email from a reader (let’s call him “J�) who mentioned to me that he has had contacts with Waters in the past. I immediately asked him to ask Roger if he would agree to a video interview. And then, one day, I got a very warm and kind reply from Waters saying “Hey Andrei, sure, I’ll do the interview. When and how? Love Roger!“.

The “when and how� took longer than expected, as Waters is truly in HUGE demand everywhere, did you see his reply to Mark Zuckerberg who wanted by purchase Waters’s song “Another Brick in the Wall II� for huge money? And the goal? To promote Instagram. You can see Roger’s heartfelt reply to Zuckerberg here. But, eventually, it did happen, and last Monday I had the huge honor, privilege and joy to speak with Roger. You could say that this was a dream of mine for 46(!) years, and it finally happened.

Needless to say, I was both blissful (hence my “cat with cream� grin during this conversation) and very intimidated. While I spent most of my life not giving a damn about what others think, this time I cared, a lot. So I will also confess of being very intimidated by the man. If anything, his kind simplicity and compassionate understanding made him, if at all possible, even bigger in my eyes.

So, after this long intro (sorry but I had a lot to say, and could easily have turned that into into a 10,000 words article) here is the promised interview:

Video Link

I have to begin this column by admitting that “Biden� (note: when in quotation marks, I refer to the “collective Biden�, not the clearly senile man) surprised me: it appears that my personal rule-of-thumb about US Presidents (each one is even worse than his predecessor) might not necessarily apply in “Biden’s� case. That is not to say that “Biden� won’t end up proving my rule of thumb as still applicable, just that what I am seeing right now is not what I feared or expected.

Initially, I felt my the rule still held. The total US faceplant in Alaska when Blinken apparently mistook the Chinese for woke-neutered serfs and quickly found out how mistaken he was.

But then there was the meeting with Putin which surprised many, including myself. Initially, most Russian observers joined one of two groups about the prospects for this summit:

1. This summit will never happen, there is nothing to discuss, Biden is senile, his Admin is filled wall to wall with harcore russophobes and, besides, the (US) Americans are “not agreement capable� (недоговоро�по�обные) anyway, so what is the point?
2. If the summit takes place, it will be a comprehensive failure. At best a shouting match or exchange of insults.

Neither of these happened. Truth be told, we still do not really know what happened. All we have are some vague declarations of intent and worded pious intentions. And even those were minimalistic! In fact, after the summit most Russian observers, again, broke into two main camps:

1. “Biden� threw in the towel and gave up. Russian won this round. Hurray!
2. “Biden� only changed tactics, and now the new US posture might well become even more aggressive and hostile. Russia is about to see a major surge in anti-Russian provocations. Alarm!

I think that both of these grossly oversimplify a probably much more complex and nuanced reality. In other words, “Bidenâ€� surprised many, if not most, Russians. That is very interesting by itself (neither Bush, nor Obama nor Trump ever surprised the Russians – who knew the score about all of them – in any meaningful way).

My strictly personal guess is that there is some very serious infighting currently taking place inside the US ruling class. Furthermore, that serious infighting is not about core principles or even strategy – it is a dispute over tactics only.

We have to keep in mind an old truism about outcomes: John F. Kennedy once said that “victory has a hundred fathers, but defeat is an orphan� and he was right. When any group seizes power and effectively controls its interests, all is well, and everybody is busy consuming the proverbial milk and honey. But when this group suffers a series of humiliating defeats, a typical cascade of events begins:

• Finger pointing: everybody blames everybody else (but never himself/herself)
• Hindsight wisdom: “if I had been in charge, this would not have happened!â€�
• Infighting over quickly shrinking spoils of war
• A collapse of the centralized center of authority/decision-making centers
• Generation of subgroups, fighting each other over their sub-interests

In other words, following many years of extremely weak presidential administrations (since Clinton, imho), it is hardly a surprise that infighting would take place (in both parties, by the way). In fact, an apparently chaotic set of uncoordinated, or even contradictory, policies is what one should expect. And that is exactly what we have been observing since 1993 and this dynamic has been getting worse and worse with each passing year).

Needless to say, the main outcome of such defeat-induced infighting is to weaken all the groups involved, regardless of their objectives and policies. Some might believe that this is a positive development, but I am not so sure at all (see below).

That being said, there are some observations which might be helpful when trying to at least (indirectly) identify who are the main groups fighting each other.

The hardcore, really nutty, russophobes are still here, especially in the US media which seems to be serving not so much “Biden� as much as some “crazies in the basement� kind of cabal. Next to the legacy ziomedia, there is an increasing number of US/NATO/UK military officials who are foaming at the mouth with threats, warnings, complaints and insults, all against Putin and Russia. This is important because:

• The “Zone Aâ€� media has comprehensively and very effectively concealed the very real risks of war with Russia, China and Iran. And if this was mentioned, the presstitutes always stressed that the US has the “best military in the history of the galaxyâ€� and that Uncle Sam will “kickassâ€� anybody he chooses to. If the people of the USA were informed of the truth of the matter, they would freak out and demand that this path to war be immediately abandoned and replaced with a meaningful dialog.
• US/NATO/UK authorities have talked themselves into a corner where they have only two outcomes left: they can do what the US always does, that is to “declare victory and leaveâ€�, or they can force Russia to protect her borders on land, air and sea and, thereby, face a major military humiliation delivered by Russia.

Truth be told, during the recent naval exercises UK and US officials made a lot of threats and promises to ignore Russian warnings, but in the end, they quietly packed and left. Smart choice, but it must have been painfully humiliating for them, which is very dangerous by itself.

How much of these statements/threats actually were done with “Biden’s� approval? I don’t know. But I am unaware of any reprimands, demotions or any other action taken against the crazies who are calling for a war against Russia, China or Iran. That does not mean that it did not happen, only that it was not publicized. My feeling is, however, that even if “Biden� did object to this kind of dangerous sabre rattling, “he� is too weak to do anything about it. It is quite possible that “Biden� is gradually losing control of his own administration.

There will be many more NATO exercises in the Black Sea in the future. Ditto for USN operations off the Chinese, Iranian or DPRK coasts. This (always explosive) combo of ignorance, arrogance and incompetence could result in a major war.

The past week has been quite intense in Russia – lots of interesting developments took place, and today I will mention three:

1. Putin wrote a very interesting essay on the history of Russia and the Ukraine, which he followed up with a very interesting interview.
2. Russia just concluded final tests for truly formidable weapons systems like the S-500 and the Mach 8 hypersonic missile Zircon.
3. In its yearly aviation salon MAKS, Russia has just presented a 5th generation, single engine light multi-functional fighter the Su-75 “Checkmate�

These are all truly huge developments for Russia which we need to look into separately.

Putin’s history of Russia and the Ukraine

First, I highly recommend that you take the time to read the full article here and the full interview here (there is no point for me to use the space here to pepper you with excerpts), especially if you are not well-acquainted with Russian history or live in Zone A. Furthermore, being the “Putin groupie and fanboy� which I so-notoriously am (guilty as charged!), I won’t surprise anybody by saying that I agree with almost every word Putin wrote or spoke. And, frankly, all the facts Putin lists are really common knowledge for most people (unless they have been brainwashed by US/Ukronazi propaganda) and there is really no point for me to repeat “yes, this is true� and “yes, he is right� over and over again.

So all I propose to do next is to just to add a few comments of mine about this article+interview (I will assume that readers will have read them both; if not, I suggest completely skipping this section),

1. First, as I just said, there is absolutely nothing new in this article for educated people. But that is not Putin’s target audience anyway. Putin’s target audience are the younger generations (in the Ukraine, the West and even, alas, Russia proper!) who know very little, if anything, about history. And while this is also true of Russia, this is especially true in the Ukraine where people have been massively brainwashed since 1917 (as Putin explains this very well in his article).
2. The real reason why this article caused such a stir in Russia and total hysterics amongst the Ukronazi nutcases (who, again, are now predicting an imminent Russian invasion, what else?) is that while these facts were known for decades, but considered very politically incorrect to mention them lest the Ukrainians get offended: from the late 80s and until now, the Ukronazis taught a very different version of history, which includes coming from the Sumerian civilization, building the pyramids in Egypt, digging the Black Sea, founding the ancient Aryan civilization, etc. Even more crucially, the official Ukronazi narrative claims that Russians and Ukrainians are completely different people (Ukies are true, pure, Aryans while Russians are Ugro-Altaic Mongols). So what Putin did with this article is simply to (finally!) proclaim that the emperor is naked and the clueless Ukies ignorant of their own history.
3. This article also marks a rather dramatic change of tone from the Kremlin. In the past the Kremlin always tried to maintain a polite and respectful attitude towards the Ukies and their Wakanda-like delusions about history. Now this is over, Russia has finally and openly decided to declare to the Ukies (and the rest of the world!) that their founding myths are based on precious *nothing* and that Russia is done treating this utter nonsense as if it has any factual basis in the adult world.

I would like to offer one more commentary on Putin’s statements.

I believe that there has been a “war of wordsâ€� waged by the Ukrainian nationalists against the Russians for many decades (I remember listening to the Ukie service of RL/RFE and I was always amazed at the completely open hatred – bordering on racist bigotry – of the Ukie propaganda; even when compared to all the other national minority services of RL/RFE which, I assure you, included a lot of bone fide nutcases in many of its services) and the Russian side was mostly quiet and demure lest the Ukies get offended. That is now over, in this war of words Russia will now use her verbal ammunition to debunk the Ukronazi pseudo-historical fairy tales. I very much welcome that!

Finally, I believe that the Kremlin is already working on “post-Zeâ€� options. Frankly, this also comes not a second too soon! The Ukraine has been in free fall for years already, but even by Ukie standards the chaos and tensions which are taking place now have grown into full scale hysterics which is both truly amazing and very concerning (I will spare you all the details now, I have enough such articles already posted, but I will probably have to revisit this slow agony in the near future). I get the feeling that the Kremlin expects a truly bona fide Nazis leader to come to power by one way or another after “Zeâ€� (Note: while “Zeâ€� did end up catering to the Ukronazis, he himself is most definitely not “the real thingâ€� – he only pretends). Maybe a “President Avakovâ€� next (no Nazi either, by the way, just a man very skilled at using Nazis)?

The bottom line is this: the final collapse of the Ukraine is what the Kremlin is now openly waiting for next. And even if “Biden� wants to force “Ze� to abide by the Minsk Agreements, this will mean the end for “Ze� and a return to full/total power of the Ukronazis. Why? There are roughly three forces in the Ukraine right now, at least apparently:

1. The regime in power (“Ze� and his gang)
2. The opposition (mostly the OPZZh party)
3. The real hardcore Nazis (you can think of them as the Ukie version of the Hutu “Interahamwe� in Rwanda

The regime is in deep agony and simply not viable.

The opposition is divided, often politically discredited and lacks both a clear leader and a clear vision.

In sharp contrast, the Ukronazis gang is small, but very well organized, very well funded and very well led (most of the “street level� Ukronazi leaders are imbeciles like Liashko or, better, Tiagnibok, but Avakov is no idiot, he is good at working with his US patrons and with the truly crazy folks like Andrei Biletskii or Aleksei Danilov.