Steve Keen: On the Edge with Max Keiser
Last week, I highlighted some of the ideas of Australian economist Steve Keen in my post, “Steve Keen and the spectre of terminal debt.” Keen is of the Minsky camp and he believes that an unsustainable debt bubble has build up in the industrialized world which can only be brought to heel through a ‘debt jubilee.’
Below is a video clip of Keen telling Max Keiser a bit more about how he sees things. Central to his ideas is the concept that demand for credit creates loans which create reserves, which is the opposite causality of what one sees in neoclassical economics. This would mean that, absent a pickup in demand for credit, inflation is unlikely to reappear – irrespective of what central banks do. I will have more on this subject in later posts.
I listen to this, and I’m convinced – we’re heading towards a Japanese style lost decade (or two). Equally I listen to the hyperinflation camp and I come away convinced they are correct too. I am totally torn. Either scenario seems equally plausible, but at the opposite end of the spectrum to the other. Both cannot be right. Both COULD be wrong and we return to some sort of normality – growth resumes, inflation stays lowish, we all live happily ever after. That seems to me to be the most unlikely outcome. I just wish I could put my finger on which of the other two options is going to prevail.
I do love Steve Keen. Maybe I should do an MBA at Sydney University. Oh and I do also want to join Max Kaisers club…
Come on, Max.
You heard him.
You may not realize that Keen’s solution is the same as I have been advocating, but it is exactly the same.
He says “nationalize” the money system.
Not the banks.
As I have often said to your posts.
This is great stuff.
I am beginning to see the light at the end of this tunnel.
My take on the need for a nationalized, and thus ‘permanent’ money system is here.
Let’s get on with The Money System Common.
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