Derivative bubble sets US economy to crash hard: Mike Harris

Press TV has conducted an interview with Mike Harris, the financial editor of Veterans Today, from Oregon.

The following is an approximate transcript of the interview.

Press TV: When we want to look at the US economy it is hard to make a judgment when you look at different factors involved, but I’d like to zoom in on the Fed’s (US Federal Reserve’s) announcement earlier about the quantitative easing that is going to be reduced, which impacted many economies. Is that going to impact also within the United States?

Harris: Well I think that yes it will impact in the United States. The quantitative easing bill is not the main issue that is affecting the core performance of the US economy.

The main issue that is affecting the US economy is something that happened back in the 90’s, which is when the US entered a free trade agreement with NAFTA (North American Free Trade Agreement) and allowing China into the WTO (World Trade Organization).

If you remember back to the 1992 election, when Ross Perot was running as a candidate, he said that if you sign this agreement… that there would be US jobs leaving the country and that’s exactly what has happened. The jobs that were supporting the US manufacturing economy have left, they are not coming back, and they won’t come back until the US takes some other policy corrections to remedy that situation.

Press TV: Quickly if you can Mike Harris, we have seen this performance on Wall Street and I’m not a man of conspiracy theories, but there are speculations that are being made, and maybe you can shed light on this; that there is this huge crash that is going to be coming.

Is that accurate, is that what we are looking at based on the fluctuations perhaps that we have seen on the performance of Wall Street?

Harris: Well yes it is because Wall Street has made some very, very bad debt. One of the big policy mistakes that was made by the Bush administration was the bailout of the big banks, which was supposed to allow them to get rid of their toxic assets. The big banks did not do that, they used that money to acquire smaller competitors.

Now we have this derivative bubble that they are now looming over the big banks. They may have made a lot of money off of this, but they also have a great deal of exposure. If this derivative bubble bursts, the US economy is going to crash and crash very, very hard.