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Steve Keen (Briefly) Explains Why Janet Yellen Won't See The Next Big One Coming
"Conventional economic theory says 'crisis don't happen' unless they are hit by an [outside] shock" exclaims Steve Keen, adding that numerous Nobel Prize winning economists have suggested that "capitalism is stable..." and "the problem of avoiding depressions has been solved for many decades."
But as Keen explains in this brief but extremely succinct interview, they are wrong - and simply won't (or can't) see the next one coming. "People in the public think economists are experts on money; but, in fact, they are experts in finding ways not to include money, debt, and banks in their models"
And yet, despite their failed forecasts and dismal 'scientific' models, we trust they can enter (and exit) the greatest monetary experiment in history with no bad outcome...
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I know that Steve Keen is an "economist" but don't hold that against him. It's like saying a Ferrari is like a Daihatsu Charade because they are both "cars".
Read his work.
Capitalism is stable; it's just the economy that isn't. Capitalism is nothing but a basic principle of human nature, and that principle is that one way or another, goods and services will always cost exactly what the customer is willing to give for them.
Government meddling in the market just changes what kind of price is paid to get those goods. Fix a monetary price on any given product too low, and the price people will have to pay to get it will be to stand in line or be put on a waiting list or purchase it on the black market for more money. Fix it too high, and the price they'll pay will be either to forgo buying it or else dodge the price-fixers' enforcers while dealing with any thieves and smugglers who can get it to them for less.
Capitalism continues to govern the business transactions of even the most fanatical socialists in the most barren commie wastelands. Saying capitalism isn't stable because you can't force the economy to do what you want it to is like saying the laws of physics aren't stable just because you don't get to legislate any of them.
+100 RIP.
Demonizing the exit from created dependence. Sounds familiar..anyone seen gold or silver prices lately?
Great commentary. Both price manipulations are going on right now with gold to a limited extent. The price is too high in India because of goverment meddling there and so smuggling is running wild. Meanwhile the price is too low for the Chinese and other countries so they are buying it hand over fist from the West. Eventually capitalism will win as the Indian government capitulates so their demand will accelerate until overall world demand drives the price of physical to its natural value vs fiat currencies.
Again, saying capitalism "will win" is like saying the laws of physics are going to win; it's belaboring the obvious. Capitalism already prevails, as you've already described in talking about gold manipulation. In India, the customers are turning to smugglers to get them their gold at a more reasonable price. In China, the customers are making sure they're at the head of the line to buy gold by jumping on it before customers elsewhere try to take delivery on their over-printed gold delivery contracts only to discover there isn't enough supply to meet their demands.
Really, capitalism is always victorious; this is just more obvious at some times than others. When the economy is good, people celebrate receiving capitalism's rewards as if they were entitled to them; when the economy goes sour, they complain about receiving capitalism's punishments as if they somehow didn't deserve them. Yet capitalism prevails in both cases, see?
Again "so long at the energy boom keeps going parabolic Wall Street and the FOMC are irrelevant." If anything...after the Target fiasco "they're the problem" not the solution. in my opinion Jamie Dimon and Lloyd Blankfein should pay for that 600 million dollar thieving out of their own pocket. And while we're on the subject of how to deal with "excess reserves" and "reverse repo's"....
Same as it ever was. Hegel was right in saying the only thing we learn from history is that it's ignored.
See Normal Accidents: Living with High-Risk Technologies, Charles Perrow, Basic Books, NY, 1984.
http://www.ohio.edu/people/piccard/entropy/perrow.html
Might help if we had honest (not propaganda) accounts of modern history without having to wait 50 years or so for a chance that the trutth will out - Oh wait - didn't Edward Snowden just help a little with that problem?
c'mon. i just realized two days ago that copernicous wasn't 'detained' for his heliocentic blasphemy....it was his description of currency debasement as the destruction of empire that got him put away. 50 years?... it's taken fifty years to find out ellsburg was sheer think tank limited hang out (still helped us get out of the war, but,jus' sayin'- i think they were done with it anyway- they'd achieved their nixon debt/kill the gold standard default by then). it takes a long time to reclaim hstory, and then whooosh! it's gone again.
The only way to generate growth for decades was for central bankers to blow bubbles.
Doing it again, this time it is stocks.
I find it curious there are still folks talking in terms of economists' attempts to preserve, save, stabilize, and words of like ilk. Thieves never concern themselves with the chaos left in their wake... and there is only one way that I know of to stop them
Even fat, ugly, Fed Barbie says, "Math is hard".
http://vegasxau.blogspot.com
If you assume the central bankers are greedy sadistic bastards, it seems logical that
-whenever private debt is greater than public debt, they wiil contract money supply, create deflation so the biggest debtors loose out.
-whenever public debt is greater than private debt, they will expand the money supply, create inflation so the biggest debtors win.
There is an advantage of sitting at the controls.
Steve Keen got it right but the mainstream economists simply not allowed to talk about debt creation because it would reveal who is cheating the world and how
It's still a question to me if this will result in a crack up boom or a bust. There are arguments either way.
it will go as always - one fiat will be replaced with a new fiat
Sure, but will they replace it after a deflationary bust or after a crack up boom?
Who is in control? What makes them the most amount of money? I don't think it is a maths question, although the maths should be able to predict certain points where decisions need to be made. I think it is a people question. If you know the right people and their interactions then you will find your answers.
The persons how make the laws and have the guns, armies, police, courts, money printing monopoly, in other words: the government is in control, the tax serfs have to work for them and fork over the money for their idiocy.
Since inflation works as a tax for them if the gvt is more in debt than the governed, it benefits them, not if the governed are more in debt than the governers.
"the problem of avoiding depressions has been solved for many decades."
Except for the fact that we are in a depression now.
That's because something unexpected happened
Read more: Detroit Has Large Number Of Homes Worth Less Than $10,000 - 24/7 Wall St. http://247wallst.com/housing/2013/12/29/detroit-has-large-number-of-homes-worth-less-than-10000/#ixzz2otlCfj68Follow us: @247wallst on Twitter | 247wallst on Facebook
homes where there are no jobs are worth much less than $10k
i know in some places they give it away for free just to get rid of maintenance costs
i've actually investigated the detroit situation, to a small degree, but small enough to know this much.
first off - there is going to be a tax lien in the area of $20,000 on each of those 'homes'. and - there is going to be no metal left in those homes, copper plumbing, wiring, fixtures of any sort. so, in the end what you are really buying is the lot.
i've also considered moving in with a few people and doing an artist colony, such like i did many years ago in williamsburg, brooklyn. the problem there is, it's really cheap and very doable, but you need big lock, and big dogs, and firearms and the attitude that goes with it. just too old now.
but - i highly recommend it to young people seeking space to live cheap, do art, and live with adventure.
i prefer boredom now.
How do you spell deflation?
D E T R O I T
I liked the "irony" observed in the first bit of that video that mainstream economists ignored "money" creation.
Mainstream economists are necessarily professional liars and immaculate hypocrites making their living defending the triumphs of organized crime controlling societies, by the fundamental fact of making money out of nothing, as debts, by private banks, that is utterly insane, except it still becomes runaway, triumphant organized crimes, ABLE to take over almost complete control of society, so that the mass media, and school systems, promote that social insanity as somehow being a "good thing."
Mainstream economists specialize in lying by omission regarding the most important features of the economy! Mainstream economists deliberately ignore the real ecological environment's energy systems, and operate within taking for granted the basic fraud being the foundation of the current economic systems.
The first and last bits of that video touched upon those extremely strange social facts tangentially, and so, were the most worthwhile pats to watch. However, even then, there was still too much superficiality in the alternative views presented in the middle of that short video.
"...And yet, despite their failed forecasts and dismal 'scientific' models, we trust..."
You think so? Why would you think that? Because there hasn't been outright revolution yet? I think you're mistaken.
Steve Keen won't see the next big one coming, either.
No. Fuck YOU! I can understand you getting all confused, with him being an economist and all, but you really need to get an education before you cut your own throat:
http://rwer.wordpress.com/2010/05/13/keen-roubini-and-baker-win-revere-a...
http://investorhome.com/predicted.htm
http://www.paecon.net/PAEReview/issue64/Editor64.pdf
http://rommeldak.wordpress.com/2010/06/19/no-one-predicted-this-financial-crisis-did-they/
http://moderndebtjubilee.blogspot.com.au/p/steve-keen.html
Thanks for those links, PT, they added more historical depth to that little embedded video in this ZH article.
No worries. As you noticed, I get a little annoyed when people insult Keen when they have no idea where he's coming from. I first learnt about him when he "lost" a bet about housing prices:
http://www.abc.net.au/news/2010-02-16/economist-keen-to-walk-canberra-kosciuszko/333138
I wish I could have joined him in that walk (never mind, I would have slowed him down), though I did send him a message of support at the time.
Here's what he has to say about the matter now:
http://www.lynham.com.au/steven-keen-i-will-be-wrong-on-house-prices/
Well Keen is right, you can't know the timiing and that was his point, you can only know the outcome is inevitable...and that as he said debt creation can go on much longer than you expect.
Did people watch the whole video?
And he is right no? That deleveraging has only reduce that debt by about 20% which means we are stilll a long way worse than the Great Depression and this is the brick wall any 'recovery' will run into. i.e. Until you deal with the massive debt recovery is a pipe dream. AND with the Fed 'printing' like crazy for ever the outcome being a very nasty one is Inevitable... just what type of nastiness they choose is the question.
Pure Capitalism assumes a frictionless machine. A perpetual motion machine.
On the one hand, it depends upon what you are calling "pure capitalism", but on the other hand, capitalism is a philosophy of political economy, not a mechanical device. Then, on the third hand (???), how would we know if we haven't really tried "pure capitalism" yet?
Steve has missed the point.
Yellen is there to take the fall and prove to the world that women can't do a man's job.
Of course she won't see it. She'll be well paid not to see it.
Keen states the obvious. Mainstream economics is the spawn of the Fed Reserve.
Going back over the 2008 crash,one of the primary events was a credit crunch or short-term liquidity crisis.The costs of overnight financing expanded,which caused them to have problems with the long term commitments (carry trade).
One of the factors here was that noone knew where the nasty,smoking hand grenades were,sitting in the file drawers of different banks (derivative contracts,etc.).
This is because there is no central exchange for OTC paper,everyone has to guess,or take on faith that a desk trader is telling the truth.This screws up the counterparty chain type of finance which we have now.Five banks now have the bulk of this derivative exposure.Should one bank collapse it is unlikely that the rest will be unaffected.
Nobody talks about the Rating agencies enabling of the Ponzi much anymore.Sortof a nonstory in the mainstream press,but the banks could never have sold the crap CDO's and such without the AAA ratings from Moody's and the others.Should ALL be guillotined....
It's not about capitalism this or capitalism that.
You have to abandon many of the ideas that were pumped into your brains when you were children.
It's about the Jews. The Jews want all of your money, period. They won't stop until they get all of it. And I do mean all of it. They will not stop until you have absolutely no money left.
You all know in your hearts that the Arabs will defeat Israel and the Jews will destroy America. You know this. So which side are you going to take?
The question is what are you going to do about it. That is the question.
So let me see if I get this right. After a full blown rectal exam to qualify for my mortgage because I was in straight comission sales that bank simply enters some numbers on a screen to pay the people I 'bought" my house from???? Thin air right? Same bank that won't cash a 3rd party check for me if the amount isn't in my account to cover it even though I have banked there 15 years? So what other business besides government do we allow to treat us, the customers like that and stay in business. Oh wait, that would be the airlines, or any fast food joint we allow to give us cold fries and burgers. We need a focus group. A group that would make us focus on what the hell is happening to our country. Our kids need cell phones at 8 years old? Kids don't play outside anymore. I was sitting in a neighborhood in my car delayed because of a car wreck. I saw a woman pick up her kid at school and drive around the corner three houses down. It was only 28 degrees and snowing for God sake. Can't let them walk less than a block home. Our little boys are drugged because they won't sit still in class. Did you want to sit still in school when you could be out with a slingshot shooting birds? Oh wait, a sling shot, call the SWAT team. F this. The country is screwed. I rest my case. I did enjoy sitting in my tree stand in the woods. Wind chill 7 degrees. No deer. Redtail hawk won the day ,, the squirrel lost. Birds of prey have it going on in my book. Peace all.
You can down arrow me. I don't care. I'm sick and tired of reading the works of different economists and analysts. A waste of time. Keen is an "economist". That says enough for me. YET, if he believes that there can be change and reform within the current domestic and global systems, he's just as misguided as all of the others. But, if he believes a new system must come after this one dies, for there to be any chance of a decent socio-economic system that is conducive to the population's well-being and prosperity... then he is a step up from all of the rest.
The position of Economist is like the position of art critic. Worthless. They do nothing for society (economists have actually done something... made things worse). Get rid of them.
Also... anyone who makes predictions is an fool. There are too many variables, vectors, interventions, governments, corruption, warring factions of the big families for that!!!!
Right comment. Wrong economist.
Your mainstream economist is nothing but the Ministry for Propaganda. But there is a reason that Steve is not mainstream.
Hey Steve Keen. Where ya been? Down under?
The FED is a criminal organization that works for private interests. Janet Yellen is a Totus and shill for banking interests. Her position is much like the gypsy families of the 14th century. She is to lie and gather money from the hosts. As a criminal she should be immediately arrested. The FEDs sole purpose is to steal as much money and assets from the people and corporations of the United States of America.
So why don't you do the research and publish some specifics so Yellen and the rest of the FED can be arrested and held in cells until prosecution?
Everyone knows these scum are crooks. Now is the time to prove it. Their system is fracturing and inroads can be made that will bring them down.
Why don't you do all that stuff? Steve's kind of busy.
He paid the price of his "ignorance". See links at my comment 4284289.
He is useful. See links at my comment 4284100.
Admittedly, if he had've done what you suggested, then he might have avoided a long walk. Plus, at what point does he end up just trying to develop a mathematical model of criminality? Still, I prefer him keep doing what he's doing. Let someone else get out the pickaxes and summon up the masses.
janet yellen is fat incompetent boob
Only way the fed goes is in a huge funeral pire on that island of crooks.
i hereby name life in 'jim willies' underwater prisons' .... return to jekyll island.
Capitalism has to fail at some point, it's built into the cake. The problem with the US Banks is when they control, print and distribute their own money as legal currency, and it's nothing more than Monopoly Money.
That's not capitalism, so capitalism does not have to "fail at some point." What will fail is fiat money.
Yellen won't see it coming because she will be getting backdoored, just like the Duck Dynasty guy warned against.
I bet you could take all the Duck guys' money from them and they could not only survive, but thrive out in the woodz.
Since the Duck guys represent wholesome values, they must be eradicated.
I will have to watch the show now. With Boardwalk Empire, that makes Two TV shows. I am afraid of the slippery slope.
It isn't that capitalism is unstable, but when you mix crony authoritarian/centralized ideas like a central bank that is controlled by the few shareholders who control them and earn a 6% dividend every year, then you create perverse incentives for those banks who control the currency in the economy.
This is what makes capitalism unstable. Consumers wouldn't have been able to overleveraged on housing or take out a HELOC and spend it on a car, and investment banks wouldn't have been able to create 1.4 Quadrillion in notional value if Central Banks didn't keep interest rates so low for so long, as the investment banks wouldn't have been able to hypothecate away with 100% reserves.
Pure Socialism was given a chance and has failed miserably.
Pure Communism was given a chance and has failed miserably.
Pure Fascism was given a chance and has failed miserably.
Pure Centralism was given a chance and has failed miserably.
Pure Cronyism was given a chance and has failed miserably.
Pure Capitalism has never even been given a chance.Crony Socialism was given a chance and has failed miserably.
Crony Communism was given a chance and has failed miserably.
Crony Fascism was given a chance and has failed miserably.
Crony Centralism was given a chance and has failed miserably.
Crony Cronyism was given a chance and has failed miserably.
Pure Capitalism has never even been given a chance because it is a Pure Fantasy that only exists in Fairyland, at which point a Pure, Wise, All-Knowing, All-Loving Monarch would also do an excellent job.
Crony capitalism is all that you will get in the real world.
In fact, Feudalism is all you will get in the real world.
Federal Reserve of the Banks, by the Banks and for the Banks.
The rest of the country and its citizens be damned. The main aim of the political class and the central bankers around the world is to create one bubble after another for the zombie bankers to feed on. The majority of the population who actually work hard to earn their living by engaging in productive work have to pay the price by either loosing a majority of their earnings in the form of taxes, interest on loans or paying the bill for the bailouts.
www.marketoracle.co.uk/Article40231.html
People enjoy deliberate ignorance just so they can vent some spleen, regardless. Set a straw man then vent at it.
Keen called the property market correctly. Left to its own devices it would have been another USA, absolutely guaranteed. And it would have toppled over faster than the US market as property holders would have witnessed the USA crash and been even more keen to exit....except the Aust govt foresaw what was at hand....and acted before impact came to Australia.
Australia having seen the USA....quickly went into a very large cash in your hand stimulus package (people were given cash to spend) as well as capital works...AND China went into a massive stimulus package which kept up demand in Australia. THIS held up confidence BEFORE it could be dented too much and cause a panic...it held up employment and so on.
Without a large amounts of cash being sloshed around in China, Europe, USA and Australia... Australia's employment and property market would have been toast.
BUT the problem is still there. If unemployement rises AND people begin to think that unemployment will continue to rise...then watch the property market. Rate reductions help...but nothing fucks up a market more than when the customers are unsure if they will have a job next year...AND they see prices begining to fall.
"The Rothschilds, and that class of money-lenders of whom they are the representatives and agents -- men who never think of lending a shilling to their next-door neighbors, for purposes of honest industry, unless upon the most ample security, and at the highest rate of interest -- stand ready, at all times, to lend money in unlimited amounts to those robbers and murderers, who call themselves governments, to be expended in shooting down those who do not submit quietly to being robbed and enslaved." Lysander spooner....
Urban dictionary Audit FED take bit coin
The Central Planners have everything under control, Comrades!
Forward Totalitarianism!
Now get back to the widget production line, break's over.
I've seen things change in under 10 minutes in my life. Check out the pics of touching moments between human beings. A small act of kindness or violence could change the view in an instant when the water is boiling such as it is.
http://distractify.com/news/x-astounding-moments-of-peace-during-protest/
Astounding moments of peace during protests (collection of photos) - typo corrections :x
"The Rothschilds, and that class of money-lenders of whom they are the representatives and agents -- men who never think of lending a shilling to their next-door neighbors, for purposes of honest industry, unless upon the most ample security, and at the highest rate of interest -- stand ready, at all times, to lend money in unlimited amounts to those robbers and murderers, who call themselves governments, to be expended in shooting down those who do not submit quietly to being robbed and enslaved." Lysander spooner....
Urban dictionary Audit FED take bit coin
The commerce clause is a far stretch for the FED... regulate comerce not bail out.... The Federal reserv act should have at least had an admendment to the the constitution and the 2/3 votes.
To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes
The problem is not capitalism, it is fiat money and fractional reserve banking. Capitalism with commodity money, respect for property rights, and no monopoly of organized coercion is stable*, and produces a system of gentle deflation as the buying power of money increases. Buying power increases because the supply of goods and services increases faster than the supply of money when money can not be created from thin air. This allows the working people to save money without having to invest it with some shady broker or put it at risk in the stock market. They can put real money (historically gold or silver) away and have greater purchasing power in the future. Of course this cuts out the profits of the banking cartels, so it won't be allowed until enough people realize what is going on and stand up to the system.
*There will always be ups and downs in the economy, due to real factors such as technological shifts or natural disasters, but the cyclical booms and busts are a result of the banking system, not capitalism.
In Dutch the word for debt 'Schuld' also means guilt and at fault.
In English "debt" has the same meaning
Today, we got a letter from a local politician that was inquiring about what we considered our priorities.
Hummmm...priorities.
This was the response:
AFTER THE COUP AND REVOLUTION, THE PRIORITIES ARE TO BRING TO JUSTICE ALL YOU TRAITORS.
YOU AND EVERY OTHER SCUMBAG CONGRESS CRITTER AND SENATE TOAD ARE ALL A BUNCH OF GOD DAM TRAITORS TO THE CONSTITUTION AND THE COUNTRY, THE UNITED STATES OF AMERICA.
YOUR WARMONGERING PROFITEERING AND SUPPORT OF THE ILLEGAL ALIEN SOETERO THAT HAS USURPED THE WHITE HOUSE ARE GOING GOING GONE!
ALL YOU COMMIE SOCIALIST TRAITORS ARE OUT THIS ELECTION.
THAT INCLUDES YOU!!!
TAKE THIS EMAIL OFF YOUR LIST TRAITOR!!
AND DON'T BOTHER POLITICKING. YOU ARE OUT OF THERE!!
FUCK YOU!
Not sure, but maybe this Spam letter sent the water down the bridge and we just lost it.
Bet she didn't see this one coming.
Freaking hag.
Selah.
He watched the money as debt. series.
That is ok. My bad. I don't trust anyone with an English or Australian accent.
The English because they are and have been entirely broke for some time and the Aurtralians because that is where the English sent their criminals.
Oh and the third reason is because every guest with an English accent on Coast to Coast AM is a crook that tries to get poor people to give them money for snake oil and the snake oil is fake too.
You know zilch about Economics or Hyman Minsky......you deserve Bernanke and Yellen and Dimon and Hank Paulson.......
Capitalism is the Hog Cycle or Cobweb Theorem and every variant is an attempt to dampen oscillations.
Hey, all the stats we get from Central Planning are bullshit.
"What difference does it make?"
The economy sucks, so prepare for it to suck even moar.
Hedge accordingly.
Keep Stackin'
Keep Packin'
Bit-Chez!
We live in a world of charlatans, liars and thieves and only have as far as our spouses to look to know it is true. Despite this common knowledge we have allowed central bankers and criminal politicians to rule our lives. Is this not the time for crypto-currencies or what? The world has become so advanced, and with every minute it increases at such an expanding rate, compared the the evolution or our physical brains's abilities that we are toast with one wrong action based in psychological oversight. Logic founded within mathematics will circumvent our best intentions every time from here on out.
One thing certain about central planning is that it is assured to destroy us all.
Open source software and a democracy founded in open source software is the only solution to survival at this point in time. If Central Bankers and the primitive oligarchy are not supplanted soon, rounded up and arrested, we are doomed.
As if it matters what Janet Yellen sees or doesn't see. She's just a pawn. A cog in the machine. Carefully chosen. Unknowingly doing the bidding of the big capital owners. They are running the show. Until they make some major serious errors or miscalculations (unintended consequences) and things blow up in their face.
The big capital owners are in competition with each other. In the future, whatever we go to... a gold standard, electronic fiat, SDRs or whatever... it will be because THAT is what the winning capital owners wanted. It will be whatever they decide will give them more control, more assets, more interest, etc.
I hope they screw up soon, or the people shut them down. Either way, the people will be collateral damage.
It has been argued that it was a shock to the supply side that brought about the Great Recession.
"The burden of this question is that the freezing-up of the financial system may have delivered a shock to the supply-side of the economy as well, in the form of a contraction in the credit needed to keep the wheels of commerce and industry turning."