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Steve Keen On Parasitic Bankers, Deluded Economists, and Why “We Are Already In The Second Great Depression”

Tyler Durden's picture




 

Everything that 'deluded' orthodox economists have done so far has been designed to aid the creditors (who remain the problem) while Steve Keen, the most familiar face of the non-orthodox economists, sees the only solution to this crisis as aiding the debtors. His interview with BBC’s HardTalk this week covers a great deal of ground from modern debt jubilees (and how they should be structured), the Tea-Party and Occupy movements (and his growing fear of historically repeating the endgames of previous economic and social disenfranchisements), and the parasitic nature of our existing financial sector.

He is unequivocal on the outcome of the status quo, as he has been for many years, citing politicians as reactors not leaders with the view that the youth movements we are seeing will force change of leadership to enable non-orthodox solutions to our simple problem – too much private debt. “Write off the private debts, nationalize the banking system, and start all over again” is his starting point but his ideas on implementation warrant some attention as he attempts to promote creative instability and reduce the destructive instabilities of capitalism – recognizing that our world is not in equilibrium as every Keynesian economist would believe but inherently cyclical and unstable.

 

 

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Sun, 11/27/2011 - 13:30 | 1917777 GeneMarchbanks
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Keen has continually stated the problems correctly but offers an unworkable solution due to the incredibly dark and shady workings of the industry he claims to 'analyse'. I've always had the feel that he resorts to an academic sounding argument because if he were to simply state the crooked nature of the people in question, he'd be visited by the hush police.

 

I hate that cunt, she was worse with Bass.

Sun, 11/27/2011 - 13:40 | 1917829 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

agree with the assesment on keen. The best people to listen to (like Faber, Rickards, Casey and so on) can basically come out and say things about the financial state of affairs that a child could undertand. Academics however need to shrowed everything in mystery, or else their livlihood is under threat. There's a limited market for all out shills like roubini so keen goes for this wishy washy predictable middle ground third way crap, and all the while floggs off saying "no one predicted this but me, only I can undersand this yadda yadda bullcrap... and aside from being just coplete pie in the sky, a deby jubilee, really?? so he's advocating more fiat printing then, more currency debasement, less incentive to wrok and save, free houses for free loaders... unless you gave every citizen equel money with those in debt having no option but to use the money to pay down the debt, creditors losing everything (so deflationary pressures equal out the money printing)...nah even then this sucks what needs to happen is that governments just die and what should happen be left to happen...VOILA!

Sun, 11/27/2011 - 13:59 | 1917910 DormRoom
DormRoom's picture

nah.. I think he's a realist.. He's saying there's no way we can pay off our debt, so why live 20 years in denial, and economic depression, when we could jave a grand program to get rid of it at once.

 

Although China will not be happy, if there is a debt jubilee, so it may may want America to annex most of its empire to it, possibly through war.

 

So perhaps the Syria-proxy Iran war--is to front run a debt jubilee, by controlling most of the world's oil supply, so the BRICs can not wage total war, once a debt jubilee is announced.

Sun, 11/27/2011 - 14:00 | 1917922 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

No, the realistic option is defult, governments just come out and say, sorry but this shit obviously aint getting paid, so lets stop borrowing from the unborn and just admit it. Creditors get burned, debtors dont get free shit. Thats what should happen, and it involves no pie in the sky money printing

Sun, 11/27/2011 - 14:39 | 1918088 The Peak Oil Poet
The Peak Oil Poet's picture

 

 

 

no the realistic option is population collapse

 

http://thepeakoilpoet.blogspot.com/2011/11/land-of-skinny-people.html

 

pop

Sun, 11/27/2011 - 15:55 | 1918228 sqz
sqz's picture

In a sense, Steve Keen's ex-post "solution" does not go far enough or is only half a solution. Maybe he could have said more if the presenter let him ever finish a point...

A debt jubilee for household and corporate debt combined with printing would indeed wipe the slate clean but it would also remove the incentive for the system to change to prevent this state of affairs ever happening again.

For some reason policymakers from academia to politicians to regulators and central bankers seem to completely ignore the perverse incentives present in modern capitalism:

1. Corporates have enormous incentive to take on debt and minimise corporate investment due to shareholder value maximisation, MBA ideology, large free floating shareholdings within limited liability who care only about short term profit, weak corporate governance unable to challenge executive compensation or re-align decision making for long-term benefit, and no long term stakeholders. Also, often it is easier for corporates to make a return from investing in financial assets instead of focussing on their core business strategy (look at what happened to GM and GE).

2. Household property ownership is increasingly considered virtually a public right and, even worse, a minimum asset to secure further borrowing for most individuals. Talk about monetisation of the "American Dream"! What happened to working for your dreams instead of having them handed to you on a plate at extraordinary long-term risk? Why do you need to own a house now so badly on the worst possible terms, e.g. zero deposit, interest only mortgages when rates can only rise? You could be using your funds to build on top of your current productivity or setting aside funds for inevitable bad periods plus your real dreams (even if they are eventual home ownership at least they will be on your terms).

3. Intermediaries have huge incentives to create debt and stoke up financial assets. TBTF/G-SIFI entities, deregulation, political capture, tax havens, the efficiency of the global capital markets all combine to make it trivial to increase not just leverage limited to individual markets or sectors (i.e. bubbles in traditional sense), but systemic leverage. This type of leverage cannot be easily removed due to interconnectedness.

Some of these features are specific to "Anglo-American capitalism", e.g. for corporates. However, all types of modern capitalism are failing mainly due to the last point - intermediaries and interconnection.

Steve Keen on HARDTalk interview did not offer any insight as to how to solve these causes that have existed and grown for 40 years. Without a solution there, it can and would happen all over again with or without a "debt jubilee".

Sun, 11/27/2011 - 15:56 | 1918381 trav7777
trav7777's picture

writing off the debt fucks the people who lent real capital into the blackhole.

I mean, we're talking about "saving" the type of people who shouldn't be saved.  Profligate spenders and deadbeats.  So what then, so we can have those same people lever up all over again due to moral hazard?

We ALREADY SEE THAT.  the people with poor FICOs who happen to be the right skin color continue to get "lent" money.  JFC, has 30 years of welfare not proven what happens when you just give handouts to people?  I mean, look at Africa- why should they bother trying to feed themselves or their children when whitey will just give them a famine jubilee every single fucking time?  And, their population has doubled in the last 30 years.

Jubilee has to come with a symmetric cost, not a get out of jail free pass for the imprudent.  And yes that means spay and neuter bankers as well...everyone in the loop.

Sun, 11/27/2011 - 16:23 | 1918476 GeneMarchbanks
GeneMarchbanks's picture

To suggest that an outside impartial mediator can step up and pick 'winners' & 'losers' amongst the debtors and creditors on a global scale is absolutely the height of absurdity. At best it's intellectually dishonest. What allows this level of indebtedness is fiat. Change the monetary system or at least start a coherent discussion instead of this nonsense. A theoretically infinite money supply in a finite world seems a bit ridiculous, no? Never mind, I just saw the light... you're right... eliminate Africans. Then we'll all be happy and merry... Wow ... those Africans mooching off of the system... how did I miss it? So obvious...

Sun, 11/27/2011 - 16:26 | 1918488 Max Fischer
Max Fischer's picture

 

 

Your white supremacy, KKK mentality is ridiculous.  Chumbawamba is a forum friend of yours, right?  He openly admits (proudly) that he defaulted on his debts, which, by definition, makes him a deadbeat.  Are you suggesting he should be neutered?

Max Fischer, Civis Mundi 

Sun, 11/27/2011 - 17:47 | 1918743 Michael
Michael's picture

Everyone will default anyway no matter what. Get over it. Here you can buy a hundred trillion dollars for $247.50, so far.

 Ron Paul Signed Zimbabwe One Hundred Trillion Dollar Bill

http://www.ebay.com/itm/ws/eBayISAPI.dll?ViewItem&item=250939520993#ht_500wt_1334

Sun, 11/27/2011 - 20:37 | 1919301 myshadow
myshadow's picture

He was writing with a sense of irony.  Get a grip.

Sun, 11/27/2011 - 20:42 | 1919318 sgt_doom
sgt_doom's picture

"...writing off the debt fucks the people who lent real capital..."

Real capital????  Even a whackjob troll such as yourself, can't be that unholy ignorant, dood? 

Since when does phantom wealth or fictitious capital equate to "real capital"?  So you believe the 100th layer of securitized debt equals real capital, sonny?

The only profligate spenders here, lowbrow, are the banksters who sold hundreds of trillions of dollars of worthless credit derivatives, earning them billions of billions of thieving, illgotten "profits" --- while now lying through their greedhead, sociopathic and rotten-smelling teeth, proclaiming that everyone else must now adopt "austerity" to further underwrite their perfidy?

 

Sun, 11/27/2011 - 21:05 | 1919391 saiybat
saiybat's picture

"We ALREADY SEE THAT.  the people with poor FICOs who happen to be the right skin color continue to get "lent" money"

Trav7777 you're deluded. Have you never heard of urban decay? There's no credit in the ghetto.

Sun, 11/27/2011 - 21:46 | 1919572 JungleJim
JungleJim's picture

"There's no credit in the ghetto."

   Apparently not so ... I've heard that you can get "a nickle bag" on time, the hoe's, not so much.

Sun, 11/27/2011 - 15:35 | 1918305 FranSix
FranSix's picture

So what Keen's saying is re-fuckulate the frammistan at the jiim-jam, frippin on the krotz?

Sun, 11/27/2011 - 15:39 | 1918319 Oh regional Indian
Oh regional Indian's picture

instant classic! Thanks for the laugh.

ORI

Sun, 11/27/2011 - 16:06 | 1918409 FranSix
FranSix's picture

Its basically called:  'pushing on a string.'

You have to, instead POOL DA STRINK!!!

 

http://www.youtube.com/watch?v=L7Dw60SVXQ4

Sun, 11/27/2011 - 16:23 | 1918453 Manthong
Manthong's picture

CRAP!!!!

I knew he was a little off when describing OWS but..

I listened to this moron for 24 minutes to hear him wrap up with “If Obama had been elected in 2012 instead of 2008 ,,  he could have seen... somebody with his charisma,, "

It’s been a while since I last projectile vomited like I just did.

Sun, 11/27/2011 - 18:35 | 1918806 Sopra Tutt1
Sopra Tutt1's picture

Steve Keen could've very well said: 'With his charisma, if Obama was to be white, we would all be out of this mess by now. Unfortunately I see no white boy comming along to save the day, other than me, of course.'... as this makes as much sense as what he actually said.

 

CRAP indeed. I need to borrow, not only because I'll help to kick start the economy, but I will benefit from the debt jubilee too. Moronic.

Sun, 11/27/2011 - 20:42 | 1919320 myshadow
myshadow's picture

'With his charisma,
Unfortunately I see no white boy comming along to save the day, other than me, of course.
'

No, It was more with his charisma, and had ne not totally remained sold out to the MOTU and would still refuse to prosecute the thieving bastards......It had nothing to do with race and everything to do with being totally bought and paid for.

Sun, 11/27/2011 - 23:14 | 1919815 Sopra Tutt1
Sopra Tutt1's picture

Charisma and complex economic designs have nothing in common, just as race has nothing in common with who solves the "problem". TPTB will select the "solution" that suits their needs,  just like they did when they selected keynesianism, looking for a free lunch. Keynesianism gave them the free lunch, as it allowed governments to borrow from the unborn. Now they had their lunch, and they are looking for the dinner. It will mean printing, but printing in small enough doses so the host doesn't feel that the parasits are sucking the wealth away. Being the first with the access to the printed money, TPTB (gov and bankers) will gain. This can't end without a revolution.

Sun, 11/27/2011 - 20:43 | 1919321 myshadow
myshadow's picture

'With his charisma,

Unfortunately I see no white boy comming along to save the day, other than me, of course.'

 

No, It was more with his charisma, and had he not totally remained sold out to the MOTU and would still refuse to prosecute the thieving bastards......It had nothing to do with race and everything to do with being totally bought and paid for.

Mon, 11/28/2011 - 05:07 | 1920288 Element
Element's picture

Never forget Keene is an academic. He fundamentally trusts the system to self-correct, if you nudge it the right ways. Determining the right way is his personal taskmaster. He seems rather ignorant or out of touch with almost everything that goes on outside his own blog and his circle of economics pals.

I new he was a "bit off" when I heard him taking an absolutist UN 'consensus' position on greenhouse warming, and claiming all the evidence supported that view - which it clearly does not.

--

AUDIO: Ian Plimer - Heaven and Earth: Global Warming, the Missing Science - October 24, 2009
Financial Sense NewsHour
http://www.netcastdaily.com/broadcast/fsn2009-1024-2.mp3

--

Keene's great at what he does, modelling the economic system and gaining insights via extending that research away from the usual memes, but he has little clue how to fix things, so that the many on the street, will decide it's worth putting their energies and creativity and decades of patience into investing (real investing that is) in a viable economic future.

Where somethings remains something, and nothings remain nothing, rather than where we are now, where the nothing stores all the value - very badly.

The silly comment he made that OWS protesters should really be occupying all the economics departments, tells you how he's oriented, and what he thinks matters.

He's a theorist. 

He is not a small business man, nor a wage slave - HE DOES NOT UNDERSTAND.

The real world isn't academic theories and papers Steve. It's people doing things for each other, en-mass, and thereby becoming deserving of a crust, and a place at the table, and to take a real part in policy to add guidance for the society towards things that enable that process.

We don't have that Steve.

What we actually have is PROFOUNDLY FUCKING SICK AND IRREDEEMABLE.

 

Other than that, I read him.

Sun, 11/27/2011 - 21:47 | 1919580 JungleJim
JungleJim's picture

He has been talking to Obama !

Sun, 11/27/2011 - 14:49 | 1918133 Voodoo Economics
Voodoo Economics's picture

Amen! He talks about not putting his thoughts of solution in a cartoon! His solution is a cartoon. I've worked for 20+ years, invested my money, didn't buy a big ass house I couldn't afford, and now he wants to create some long-term social policy for all these idiots that says:  oops the contract I signed aint worth shi$*, but I get to keep all the stuff I have. If we go to that demonic democratic mobish progressivism, I say we take our chances and revert back to a Monarchy.

 

Sun, 11/27/2011 - 18:59 | 1918942 The Monkey
The Monkey's picture

Steve Keen is a good analyst who has made some compelling observations.  On the solution side of the fence, he's smoking crack.  A debt writeoff of the kind proposed would inevitably lead to additional capital misallocation (bad businesses would flourish, and there would be no real incentive to save).  Good luck with that.

Sun, 11/27/2011 - 21:34 | 1919520 Seer
Seer's picture

Just curious... do you really think that you're going to be able to hang on to what you have?  Do you think that there's going to be a system that, although completely flat-assed broke, is going to protect YOUR stuff FOR YOU?

I understand Keen's points.  If one is going to play that game of infinite growth on a finite planet then his makes about as much sense as TARPS, QE etc...  MY POINT: IT'S ALL GOING TO FAIL- in which case it's really kind of silly to expect that which only seems to exist under this system that's collapsing to continue to exist.

Statements such as yours seem a bit out of place given that 2/3 of the world's population (of which folk in the Western world have lived off of) earn the equivalent of $3/day.

You fucking bet the farm on a Ponzi system.  Get over it.

Sun, 11/27/2011 - 14:50 | 1918134 Voodoo Economics
Voodoo Economics's picture

**

Sun, 11/27/2011 - 15:50 | 1918357 Sudden Debt
Sudden Debt's picture

Nop, the only realistic sollution is inflation, and in todays situation that would need a hyper inflation. I don't believe in giving money away to everybody, that's communist and would create a even bigger hyperinflation. Inflate away in as much as possible a controled way.
15%a year for the next 7 years should do it and could still be viable for business.

Sun, 11/27/2011 - 16:34 | 1918520 WhiteNight123129
WhiteNight123129's picture

Well that is correct, Romney wants to do that, that is light up the multiplier by attacking Iran (all his LBOs investment would be acquired for free, in a sense he would what Hugo Stinnes did in the early 1920s in Germany, as Hugo Stinnes even had his own printed Mark with his names. He built a fabulous conglomerate at some point, Romney is the present day Hugo Stinnes. I guess Romney is psychopath, they are all, but I am suspecting he wants to be the inflation king as Hugo Stinnes. If he does that Romney better not delude himself that popular justice will never happened to him...Psycopathsalways delude themselves than nothing can happen to them hence the self confidence that help them lead other people!!

Sun, 11/27/2011 - 21:40 | 1919543 Seer
Seer's picture

So, you over-inflate the crap out of everything, then what?  In case you haven't noticed, the USD has already been made dirt cheap yet where is everyone paying shit off?

Supposin' that things magically zero out, how do we then operate?  Remember: NONE of the systems currently operating can exist without growth; how do you check them such that they don't over-draw from the future?  Demographics suggest that our "productivity" will continue to decrease and that increasingly more energy will be required to obtain the resources that we consume.

Once again: economies of scale in reverse.  Hitting zero isn't far enough down... and once we blow past zero (either debt jubilee or via inflation [or anything else]) there's no stops.

Sun, 11/27/2011 - 21:58 | 1919622 JungleJim
JungleJim's picture

Inflation is nothing but goverment run theft.

Money is supposed to represent "VALUE"

Mon, 11/28/2011 - 03:22 | 1920251 countupir
countupir's picture

@theMAXILOPEZpsycho

Exactly, just admit the debt won't be paid and the creditors who didn't do their due diligence learn the lesson that every one with loose standards learns.

You forgot the other part to that solution which is sound money backed by something (gold and silver).  If anyone can just print up money it lessens the risk to the lenders who make money by printing (debt).  

Risk is very important.  The ability to win is just as important as the ability to lose.

Sun, 11/27/2011 - 14:39 | 1918089 narnia
narnia's picture

what he is saying is that HIS central plan is preferable to our existing central plan.  how about NO central plan?

we dont' need the government in the currency business, the science business, the education business or the "doing good" business.

Sun, 11/27/2011 - 21:43 | 1919556 Seer
Seer's picture

Great news: govts are going to implode.

Bad news: you're likely not going to like what's coming.

NOTE: I don't approve of governments (not even for "property rights" [code for "I've got mine and my 'limited govt' will see to it that it stays that way"] which comes with the added baggage of State violence).

Sun, 11/27/2011 - 14:07 | 1917943 eblair
eblair's picture

The professionalization of the universities has been a disaster for this ugliest and most dangerous of fields.  Economics has more need of people looking at its basic assumptions than any other.  But because our best and brightest are segregated in their own narrow (minded) departments, that doesn't happen.  Good to hear Keen calling for occupying economics departments.  They really do need to be humbled, humiliated and shamed.  And now.

Sun, 11/27/2011 - 14:14 | 1917986 kaiserhoff
kaiserhoff's picture

Economists should be treated exactly like astrologers.  Keen is just another arrogant Marxist, with zero respect for contracts or the rule of law.

Sun, 11/27/2011 - 14:26 | 1918028 Waffen
Waffen's picture

if all contracts are based on a ponzi scheme, then they are invalid, and to enforce them is immoral

Sun, 11/27/2011 - 14:46 | 1918052 Max Fischer
Max Fischer's picture

 

 

If you truly believe what you've just posted, then you need to return your house to the homebuilder and you need to return all the goods you've purchased using fiat money to the original sellers. Otherwise you're guilty of theft for having paid with your "invalid" ponzi money.  Furthermore, if you've ever worked and were given US dollars (ponzi money) in exchange for your labor, then you're an idiot by your own argument.   

Max Fischer, Civis Mundi

Sun, 11/27/2011 - 21:46 | 1919577 Seer
Seer's picture

Huh?  Home-builders and "original sellers" ALREADY WERE PAID OFF! (unless you have a private contract with them, but the majority rely on financing via banks)

I've said it before and I'll repeat myself: I won't do business with ANYONE who has intentionally defaulted on ANY contract (when he/she didn't have to); if we want to restore proper behavior then we've got to act like that which we're demanding. (so, in a way I kind of agree with what you're trying to say, but how you said it sucked)

Sun, 11/27/2011 - 14:28 | 1918040 eblair
eblair's picture

Good thing for contracts to be broken from time to time.  You believe in divorce don't you?  If it is OK to divorce your wife, why isn't it OK to divorce a bank?

Sun, 11/27/2011 - 21:49 | 1919588 Seer
Seer's picture

There's a difference between "broken" and "mutually agreed-upon premature termination."  The later provides for clean dissolution, the former clashes with law.

Sun, 11/27/2011 - 14:30 | 1918049 SteveT
SteveT's picture

Here's a hypothetical for you then:

 

What would you do if you were born into debt slavery?   Your father, grandfather, great grandfathers and so on had piled up so much debt that you and your progeny would have to work it off in slavery for 150 generations.   

Debt jubilee sounds pretty good then, huh?   Besides, it's inevitable.

Sun, 11/27/2011 - 15:23 | 1918252 kaiserhoff
kaiserhoff's picture

Business law 301 for god sake.  You are not bound by the debts of your forebears, unless you accept that assignment as part of some inheritance.  Mom's basements must be getting awfully crowded.

Mon, 11/28/2011 - 11:24 | 1920906 BigJim
BigJim's picture

...unless the debt is government debt? Because as it stands, you, as a taxpayer, are liable for the debt run up by previous generations.

Sun, 11/27/2011 - 14:46 | 1918116 Piranhanoia
Piranhanoia's picture

silly,  the contracts were based upon fraud, and there is no rule of law.  Where have you been?   And what do you have against the Marx Brothers?

Sun, 11/27/2011 - 15:24 | 1918261 kaiserhoff
kaiserhoff's picture

I rather like Curly.

Sun, 11/27/2011 - 15:47 | 1918347 markar
markar's picture

Curly was not a Marx Brother. He was one of the 3 Stooges. Kinda like the troika running things here in the US- Obama, Geithner, Bernanke

Sun, 11/27/2011 - 18:23 | 1918837 Blano
Blano's picture

Google "humor."

Sun, 11/27/2011 - 18:26 | 1918851 uranian
uranian's picture

that really is an insult to astrologers.

Sun, 11/27/2011 - 19:03 | 1918952 WageSlave
WageSlave's picture

Every society has it's witch doctors. I propose we roll this generations' eco-clima-nomists back a few thousand years and get some shamans:

http://en.wikipedia.org/wiki/Ayahuasca

It'd be more fun!

 

Sun, 11/27/2011 - 21:51 | 1919595 Seer
Seer's picture

Shamans have more respect/understanding of the physical world.

Sun, 11/27/2011 - 14:36 | 1918080 The Peak Oil Poet
The Peak Oil Poet's picture

 

 

Give the guy a break. He's just a wonk after all. How often does a total wonk get to get a bit of limelight? As for the claim he was the only one to see it coming - well in little ol' Australia he was indeed one of the few (though anyone who was reading the net knew - ie basically anyone who bothered to look). It does get on one's nerves i must admit but having poor social skills is part and parcel of being a wonk.

 

pop

Sun, 11/27/2011 - 13:53 | 1917887 DormRoom
DormRoom's picture

lmao.. the show is called Hardtalk, not Softtalk

Sun, 11/27/2011 - 13:57 | 1917905 OutLookingIn
OutLookingIn's picture

Agreed - 'piss poor' interviewer. Dumb as a dull axe! Lots of chopping - saying nothing!

Keene attempts to explain very complex economic interactions in a simple way, to a simpleton, that just won't shut her motor mouth off long enough to listen properly! 

"Hardtalk" ??? Hardly!

Sun, 11/27/2011 - 14:43 | 1918101 Optimusprime
Optimusprime's picture

Hmmm.

 

I find it strange that so many find the interviewer excessively obtrusive or even a "simpleton".

 

She seemed to be intelligent and permitted Keen to make his case, while asking mostly pertinent questions.  Why the hostility?

Sun, 11/27/2011 - 18:44 | 1918901 Advoc8tr
Advoc8tr's picture

Well for starters her continued repetition of "you claim that you were the only one to see the GFC...." seems to have worked - as much as he tried to refute everybody on this board is bashing him for apparently saying it?  Also note how she kept on about giving money to debtors was not fair to prudent savers etc.... while he clearly stated and clarified at the start and many times over that it needed to be systemic I.e same amount given to everybody and those with debt HAD to pay debt with it while the others got to keep it thus maintaining the relative difference.

 

Still it is just more of same. Printed money. Banks lending money that they create and charging interest on it. Governments taking the central role.

 

Not a single mention of a hard currency, competing currencies, less government and central control - the things we need to keep the system honest in a long run.

Sun, 11/27/2011 - 21:15 | 1919430 saiybat
saiybat's picture

I thought she just parroted what he said. Should have just been a speech.

Sun, 11/27/2011 - 22:06 | 1919648 JungleJim
JungleJim's picture

I must totally disagree, she was trying to clarify points of his thesis that were incredulous.

Sun, 11/27/2011 - 13:57 | 1917907 ElvisDog
ElvisDog's picture

I agree. It really sounds like raw, unbacked money printing to me. It's hard to see how this approach doesn't cause an immediate explosion of commodity price inflation.

Sun, 11/27/2011 - 14:06 | 1917946 GiantVampireSqu...
GiantVampireSquid vs OWS UFC 2012's picture

Bang on GMB, I always wondered how he can see the problem so clearly, and offer such bullshit solutions.  There is no way my labour should be used to either pay for the banks malinvestments, or the speculators who borrowed from them.  Pay for your own mistakes, and the mistakes of your staff, thats what I have to do, just about every fucking day.

That Bitch needs a good dose of Pb.

Sun, 11/27/2011 - 14:11 | 1917968 GeneMarchbanks
GeneMarchbanks's picture

Comedy. More than half of this interview is verbal diarrhea. The name of the game is avoid responsibility through obscurantism and creditors can't lose as we all now know.

Sun, 11/27/2011 - 22:22 | 1919699 JungleJim
JungleJim's picture

A little Pb in the right places solves an awful lot of problems.

Sun, 11/27/2011 - 15:14 | 1918230 WhiteNight123129
WhiteNight123129's picture

What are going to do with our Gold, is he going to nationalize it?

Sun, 11/27/2011 - 16:01 | 1918394 AbelCatalyst
AbelCatalyst's picture

Are Steve Keene and Charles Hugh Smith twins separated at birth??? Brothers??? And their demeanor and message are about the same too!! Uncanny!!

Mon, 11/28/2011 - 11:27 | 1920916 BigJim
BigJim's picture

And you never see them together in one place... coincidence? I think not.

Sun, 11/27/2011 - 16:14 | 1918445 WhiteNight123129
WhiteNight123129's picture

Unworkable Voodoo you are right, here is the proof.

I want to know when I should borrow money just before the jubilee and buy 15 units in Florida just before the jubilee : SPECULATION.

I am a saver! what is the point? Wait for the jubilee and borrow more, do not save! what is the point? People and capital would move in an another country where they have the right incentive.

What is the incentive for the guy who is quitting his job and putting his capital on the line to build a business, forgo leisure and re-invest his capital to make sure he has overtime an actual increase in comfort and standard of living better than he had not done so? Imagine if his neighbor borrowed himself to the neck betting on jubilee actually ends up with a larger home courtesy of government money jubilee. This is welfare for the lazy. As much as I hate the fiat malinvestment and cronies, this Jubilee removes all incentive that make society move forward.

NOW if you want to be fair and not remove the problem as it is proposed you give money to both the guy indebted and the guy without debt WHAT IS THE DIFFERENCE WITH HELICOPTER MONEY?

 

Sun, 11/27/2011 - 21:58 | 1919623 Seer
Seer's picture

I suspect that your problems are deeper that you would think...

1) Buying property ("units" sounds like condos) in Florida?

2) A Saver?  You like fiat That much?

On point #2, businesses invest money/fiat for good reason: money is a tool; it somehow morphed into this thing that can "create" on its own.

No comment on point #1.

"This is welfare for the lazy."

LOL.  Yeah, we've had that already with all those bank bailouts, haven't we?  I think that maybe Keen is just saying to these folks that unless they want their heads to end up on pikes that maybe they might consider doing the same (yes, stupid "solution") thing for debtors.  And, really, if you had looked at the state of the financial companies' books you'd have seen that they WERE (and probably still are) big debtors.  It's all a circle jerk...

Sun, 11/27/2011 - 21:23 | 1919473 JungleJim
JungleJim's picture

Talks well, but is full of crap. His argument is basically if you run up too much debt you just don't pay, what the hell is so "revolutionary" about that ?

To compare his economics to physics is specious, a physics theorem can be shown repeatedly to "work", where as his economic ideas will never work.

Mon, 11/28/2011 - 17:48 | 1922969 Djirk
Djirk's picture

This guys is insane. Agreed that they should have an orderly right down of debt, but it should come in the form of liquidation. Savers and investors in real assets should be rewarded not punished. People who bought houses at bubble prices with no down payment assuming the price would go up forever should feel the pain of reality. Yes the banks were greedy and should have had tighter capital controls (not to mention regulated derivs) they should feel the pain too.

Punishing the smart ones who cashed out and savers is the wrong message. Lock this guy up before he does more damage.

Sun, 11/27/2011 - 13:28 | 1917792 tradewithdave
tradewithdave's picture

This concept of a "modern jubilee" most likely will gain traction.  It's a structured approach, so it is not at its core a jubilee in my opinion. 

Nonetheless it allows for an East-West oriental/occidental solution to reconciling the concept of a currency based on "In God We Trust" simultaneously offloading Fannie Mae onto the Chinese with the second half of Mervyn King's "divorced currency" solution.

My gut is that this will gain traction.  My gut is also that this is strongly backed by George Soros.

http://tradewithdave.com/?p=8518

http://tradewithdave.com/?p=8507

Dave Harrison

Sun, 11/27/2011 - 14:53 | 1918146 Optimusprime
Optimusprime's picture

Keep trying, Dave.  Your approach is one of the more thoughtful and informed responses to what is transpiring that I have encountered.

 

In fact, I call on you to work up your perspective into a full ZH posting.  The short "teasers" you put out on your own blog are suggestive and often illuminating, but the overall "thesis" has to be inferred from multiple readings of scattered texts.  This "snippet" approach is exacerbated by your ellipical postings here at ZH.  I never would have realized how valuable your perspective was if I had not been persuaded to actually read your blog.  After several days of steady reading, I was hooked. 

 

I think you have something valuable to contribute.  I hope you soon feel ready to make a more detailed and comprehensive statement.  Consider yourself challenged.

 

Regards

Mon, 11/28/2011 - 11:48 | 1921004 BigJim
BigJim's picture

I think you're right, it will gain traction.

For a start - it's free shit!* And not just for a bunch of bankers... but for EVERYONE! What he appears to be arguing is that central banks give (say) $100k to everyone with a pulse. If you were a prudent saver, you're $100K richer. If you are up to your eyeballs in debt, this money is given to your creditors. This money is 'written off' via fractional reserve lending's reverse process. It disappears from the banks' balance sheets altogether. As Keen says, they now no longer have the debt outstanding, meaning they are no longer getting interest from it, so their positive cashflow shrinks. Most banks would go under, he proposes they are nationalized so the underlying payments system we have all come to rely on for all our economic transactions will continue to function, while the banks' bondholders and shareholders get a massive haircut.

Yes, he doesn't mention implementing a sound currency, and he wants government control of the money supply, but... what he is suggesting here as a way of preventing a vast near-term implosion of our economies is probably the only politically-acceptable solution on the table. Once banks are nationalized, we can push for the implementation of free-market currencies, but as it stands, as long as the banks are in private hands, they will wield too much power over the political process to ever allow this to happen. Crash them, and we might have a fighting chance.

*Yes, I know his solution is inflationary... but frankly, I think one, massive spike of inflation, whereby the prices of non-credit-bought items (wages, fuel, clothes, etc) come back in line with credit-bought items (houses & financial instruments), is probably better than decades of monetary gyrations as TPTB get bailed out time after time.

Sun, 11/27/2011 - 13:54 | 1917794 Reptil
Reptil's picture

 ;-P

first second of that video: "  oh it's that awful woman again"

he still argues for printing money, but then giving it to the debtors. Wouldn't this create inflation in the short run?

Sun, 11/27/2011 - 13:37 | 1917812 Max Fischer
Max Fischer's picture

 

 

We already had the Jubilee.  It was for Wall Street, the creditors.  All the non-paying, toxic debt that bogged down Wall Street was transfered to the taxpayer's balance sheet in exchange for cash.  Now they've got all this cash, and no one to lend it to.  LOL.

This is what a Wall Street Jubilee looks like:

http://research.stlouisfed.org/fred2/graph/fredgraph.pdf?id=EXCRESNS

When do the debtors get to exchange the crap on their balance sheets for cash?

Max Fischer, Civis Mundi  

Sun, 11/27/2011 - 13:42 | 1917853 GeneMarchbanks
GeneMarchbanks's picture

Silly Robot.

Sun, 11/27/2011 - 14:13 | 1917980 disabledvet
disabledvet's picture

WRONG! They have the government to lend to. And the government is trying to get the banks to write off all the crap that's STILL on their balance sheets. In other words "the banks got the cash from the taxpayer to maintain solvency" otherwise as i think we all would agree they would have been obliterated in 2008. Now the problem is "zombie banks" who only lend to the the Federal Government (which is not a State by the way--those are in fact "the Fifty" and they're the one's the Federal Government is in fact bailing out and by forcing the banks to lend to trying to rescue.) The long and short is this: how much longer can the current usurious interest rate policy be continued such that consumption is obliterated and the economy double dips until SAVERS are finally rewarded with soaring interest rates as the Sovereign level? I say we have but days to wait courtesy of "Europe" which "has not gone down this path" of dictat interest rates. Of course i'm a believer that should BofA drop below 5 bucks a share it should be delisted and all its holdings liquidated at auction--if under the Fed's supervision so as not avoid a disorderly collapse so much the better. In other words your "debt jubiliee" comes in the form of governments having to pay the cost of all those "freebies" they've offered over decades without concern or consequence about how they are paid for and who earns an income with which to pay for them. the "Final Solution" is upon us. ALL OF US. RIGHT NOW.

Sun, 11/27/2011 - 16:08 | 1918417 trav7777
trav7777's picture

you're effing crazy.

You think this interest on your money comes from magic.  The economy has to pay it.  GROWTH has to pay it.  There is no growth.

Fucking rewarded with high interest rates?  News flash, genius, you can get that RIGHT NOW on greek bonds.  Go buy some and enjoy your magic coupon

Sun, 11/27/2011 - 22:09 | 1919658 Seer
Seer's picture

And this is the crux of the issue: insufficient growth to pay off past debts, carry current loads (sustain existing functions) AND to pay off mounting interest (which is money that never existed and isn't really accounted for).

Sun, 11/27/2011 - 23:12 | 1919805 Max Fischer
Max Fischer's picture

 

 

And that insufficient growth has absolutely NOTHING to do with energy supplies.  There is absolutely NO EVIDENCE that the world is lacking in energy right now.  NONE!  The Peak Oil argument will work one day.  Not today though, nor with this present crisis.  

Max Fischer, Civis Mundi

Mon, 11/28/2011 - 03:07 | 1920234 equity_momo
equity_momo's picture

So whats the cause of insufficient growth? Lack of demand? Debt overload? Misallocation of capital? Compounding interest ?
These are more symptoms than causes , no? All enabled through a population and credit boom caused by easy oil.
Oil production is plateuing , the first leg of the stool thus wobbling. The credit leg started wobbling very soon after and later the population leg will wobble before the 3 snap.

Mon, 11/28/2011 - 04:02 | 1920276 AE911Truth
AE911Truth's picture

Dear Max Fischer, ref: "And that insufficient growth has absolutely NOTHING to do with energy supplies. There is absolutely NO EVIDENCE that the world is lacking in energy right now. NONE! The Peak Oil argument will work one day. Not today though, nor with this present crisis."

So the price of oil increasing from $30/b to $100/b sucking hundreds of billions of dollars of wealth out of the rest of the economy has nothing to do with lack of growth in the economy? Go study the effect of dropping EROEI on economic growth.

Sun, 11/27/2011 - 13:34 | 1917813 Snakeeyes
Snakeeyes's picture

The second depression debate rages on. I say that we are stuck in a rut (slow growth, 9% unemployment. house prices flat to declining STILL,)

New Home Sales and Existing Home Sales Still Stuck in a Rut - Needs A Jump Start In The Economy

http://confoundedinterest.wordpress.com

The losses at the banks and GSEs are massive and are blocking growth.

Sun, 11/27/2011 - 13:41 | 1917848 sjdude
sjdude's picture

"9% unemployment"... what planet are you from? Actual unemployment is a lot more like 20%+

Sun, 11/27/2011 - 15:01 | 1918187 Fred Hayek
Fred Hayek's picture

Thank you. It's infuriating that the gov't puts out a number that everyone knows is bullshit but which still supplies cover to people who want to pretend that things are better than they are.

Sun, 11/27/2011 - 15:23 | 1918258 Rip van Wrinkle
Rip van Wrinkle's picture

That's if you believe Government and Government shills. A 'rut' the best they can come up with.

20% REAL unemployment in the US AND the UK. Inflation running at much, much more than is being admitted in both countries. And by under-estimating inflation, it's amazing what it does to give a positive spin on retail sales, GDP and general economic well-being.

Sun, 11/27/2011 - 16:10 | 1918425 trav7777
trav7777's picture

JFC, you act like this PAPER shit that they can just ignore is inhibiting REAL economic activity?

You people are going to have to figure out what IS causing the lack of growth.  Banks can lend what they don't have whether they are insolvent or not.

There is NOBODY TO LEND TO.  The economy ITSELF is demonstrating CONTRACTION.  The reasons for this have been explained many times by me and others.  Learn them.

Sun, 11/27/2011 - 16:40 | 1918539 WhiteNight123129
WhiteNight123129's picture

Scrapping the bottom.... the can is kicking back and any attempt to lever is pointless the money does not find animal spirit, in historical terms it is a classic secular debt saturation point, debt will have to be destroyedeither by inflation orbankruptcies, but Iran and Bernanke are giving us the answer....

 

Sun, 11/27/2011 - 22:13 | 1919670 Seer
Seer's picture

"debt will have to be destroyed"

It's not a matter of having to be destroyed so much as it is that it WILL be destroyed.  We can blame Mother Nature, but I suspect that that's not going to get us very far.

Slinky down the staircase.

Economies of scale in reverse: shit will become increasingly (non-linearly) less affordable.

Sun, 11/27/2011 - 17:51 | 1918761 WhiteNight123129
WhiteNight123129's picture

Another difference with Japan which had a good external context: Japan had very low unemployment during their  18th hundred-squared- like deflation (deflation adjustment where shorter in the 18th hundred thank to limit imposed by gold), how politically can this be sustained in the US. It already creates problems. If inflation does not come from demand it will come scrapping the bottom multiplier or through unrest shock, mass movements can create clogs and cost increases if they are disruptive enough, wars, oil supply shocks, we have a pile of dynamite, any fuse of cost-push nature can lighten it up.

 

 

Sun, 11/27/2011 - 13:35 | 1917816 rocker
rocker's picture

I guess we will have to pepper spray our way to prosperity. Per NYPD, it is harmless and effective.  LOL  

Sun, 11/27/2011 - 13:57 | 1917906 Franken_Stein
Franken_Stein's picture

If I use it on my steak, will it taste better then ?

Sun, 11/27/2011 - 17:58 | 1918782 slewie the pi-rat
slewie the pi-rat's picture

i've found it tastes about the same on everything, dr frankenfurter

except anchovies, of course

Sun, 11/27/2011 - 13:43 | 1917836 besnook
besnook's picture

his solution is a utopian dream. if this depression was left to shoe shine boys then there would be a shoe shine palace on every atreet corner charging 50 dollars per shoe shine with 45  dollars of it subsidized by .gov that also forces every man and woman to get a shoe shine every day.

 

the banks are in charge here, therefore, protecting the interests of the banks is the solution to the problem.

Sun, 11/27/2011 - 22:15 | 1919674 Seer
Seer's picture

Hard to beat the long-running utopian dream that we've been in: living as though the planet weren't finite.

Sun, 11/27/2011 - 13:41 | 1917847 strongband
strongband's picture

Look who's listening to him now...

Sun, 11/27/2011 - 13:47 | 1917869 Mr. E
Mr. E's picture

I know - it's funny.  Last year it's the gold standard, this week Steve K. Plus making fun of "Keynesians" about equilbrium is lol worthy.  

Keen is a post Keynesian, who happens to have more in common with MMT than the gold standard.  One day people will learn that money cannot and should not retain its value over the long run.  Is $1 in the time of Christ worth $1 today? Should it be?  No frakin' way.

 

 

Sun, 11/27/2011 - 13:42 | 1917850 MFL8240
MFL8240's picture

Why cant this lady shut the hell up and listen.  She is an idiot.

Sun, 11/27/2011 - 14:11 | 1917969 Bam_Man
Bam_Man's picture

That's why the BBC calls the program "Hard Talk".

She makes it hard for the guest to talk.

Sun, 11/27/2011 - 16:19 | 1918464 WhiteNight123129
WhiteNight123129's picture

Hard -TO- Talk ... that should be name you' re right

Sun, 11/27/2011 - 13:45 | 1917860 LawsofPhysics
LawsofPhysics's picture

Still ignoring the energy issue.

Sun, 11/27/2011 - 16:13 | 1918440 trav7777
trav7777's picture

DUH of course they are!

Because that CANNOT BE FIXED.  So they fart and kvetch and pontificate endlessly about paper edifices and imaginary bullshit like credit and debt and leverage.  NONE of it matters an IOTA.

They are ALREADY ignoring de jure insolvency, lack of reserves, breaking every fucking rule in the accounting book, all of which were nonsensical and arbitrary to BEGIN WITH.  Why is it sacrosanct that a bank need to have 10% reserves instead of 1% or 50%??  It's all pulled out of the ass.  Banks now have zero or even negative reserves...the US is $15T in debt.  There's not a person on the planet who believes any of it can be repaid in what we think of as a dollar today.  Nobody.

But yet, somehow if we go imaginary squared or untie this artificial gordian knot, the "growth" and happy times will come back.  one of the things I have consistently said for years was that Peak Oil was going to show us all how utterly silly and stupid economics and finance are.  They are utterly impotent in the face of this.  Try lending at 0% to stop a hurricane.

Sun, 11/27/2011 - 13:46 | 1917862 eblair
eblair's picture

Every person who runs their mouth for a living comes to believe they are intelligent.    She is a fucking moron.  Watch French news shows.  They manage to not interrupt each other constantly.

Sun, 11/27/2011 - 14:13 | 1917983 Bam_Man
Bam_Man's picture

Yes, the French are extraordinarily polite.

But only when you are conversing with them in their language.

Sun, 11/27/2011 - 14:22 | 1918015 eblair
eblair's picture

Not about being polite.  It is about not being a fucking constantly interrepting moron.  It is embarassing to watch.

Sun, 11/27/2011 - 16:46 | 1918568 WhiteNight123129
WhiteNight123129's picture

Pardonnez moi Messieurs et Mesdames, allez tous vous faire enculer!

IN ENGLISH NOW

I beg your pardon Ladies and gentlemen, go all sod-off!

See, very polite huh?

 

Sun, 11/27/2011 - 14:41 | 1918095 css1971
css1971's picture

The show is called hardtalk for a reason and she is frankly a bit weak compared to Paxman.

 

Sun, 11/27/2011 - 13:48 | 1917873 TheSilverJournal
TheSilverJournal's picture

Anyone who has solution that is to "print money" doesn't understand money. Increasing the money supply doesn't help anyone. More money doesn't create more purchasing power. 

Sun, 11/27/2011 - 14:02 | 1917929 Pumpkin
Pumpkin's picture

You sir are obviously not cut out for government work or Banking.

Sun, 11/27/2011 - 14:19 | 1918007 disabledvet
disabledvet's picture

"the debt dies with the death of the bank." I don't see what the big deal is. Decommission the banks and the media monopolies that support the edifice and see what the real problems at the State and local level are. Otherwise it's just a shell game played endlessly until everyone is bankrupt.
http://www.youtube.com/watch?v=w7YSXCp8tpc&feature=player_detailpage

Sun, 11/27/2011 - 14:36 | 1918076 css1971
css1971's picture

He's talking about changing the proportion of money which is credit/debt based vs printed paper/credit.

In the EU, about 98% of money is bank created credit/debt based, if you reduced that to a sane level, say 50% the total amount of money wouldn't change, the total money supply would remain constant but you would reduce the debt.

Simply, increase bank reserve ratios and simultaneously create enough money to cover for the resulting deflation. I would personally be inclined to go all the way to 100% reserve ratios; full reserve banking.

 

Sun, 11/27/2011 - 14:53 | 1918154 TheSilverJournal
TheSilverJournal's picture

Why set reserve ratios at any number? All that needs to be done is to stop the government from backing depositors and whala..problem solved. Because depositors would then actually care how the bank operates.

Sun, 11/27/2011 - 15:46 | 1918341 css1971
css1971's picture

Why set reserve ratios at any number?

Reality.

We started with gold & free banking and over the centuries we ended up with central banks. That process has already happened.

How long do you think the process would take this time after the first bank collapse?

 

Sun, 11/27/2011 - 16:57 | 1918608 TheSilverJournal
TheSilverJournal's picture

How long do I think what process will take after the first bank collapse?

I'm not quite sure of your question, but I'll take a stab.

If you're referring to how long it would take for the western world's monetary system to collapse after the first bank collapses if there were no reserve ratios, I would say that the banking system is already behaving as if there are no reserve ratios. Banks are not practicing mark to market on mortgages and if they did, they would be bankrupt immediately. Reality doesn't matter to the banks and the only reason is that reality doesn't matter is that depositors don't give a hoot if their bank goes bankrupt because the government will back their deposits.

Sun, 11/27/2011 - 15:06 | 1918209 Fred Hayek
Fred Hayek's picture

You seem to have understood him well. What is his position on people who didn't foolishly festoon themselves in debt? I've got almost no debt. Does my buddy get a check for $50,000 that he's supposed to use to pay off debts but I don't anything?

He never quite got to that wrinkle of it.

Sun, 11/27/2011 - 15:34 | 1918302 css1971
Sun, 11/27/2011 - 16:11 | 1918432 swampshagger
swampshagger's picture

He did say that both would get the same money.,,just that the debtor would have to pay down their debt first...so windfall for savor as well.

She was speaking over him as he was telling that point. 

Sun, 11/27/2011 - 16:55 | 1918602 WhiteNight123129
WhiteNight123129's picture

Well it is question of choice .If you have a debt saturation point you can either destroy it by inflation or hyperinflation or you destroy it with bankruptcies. If you are Japan in the 90s you look like you can kick the can because the rest of the world is ok and is importing from you, but if 62% of the world has too much debt (GDP of US+CANADA + EU+ JAPAN AND SOUTH), and if China is facingnot a secular debt explosion but a necessarilydebt restructuring and a growth more like 3%, well the Japanese expeiment can not happen, unlessthe indebted countries export toanother planet.

 

Sun, 11/27/2011 - 13:50 | 1917874 Jeronimo
Jeronimo's picture

I can't wait for this to come to pass - ha.  It's only fair from my perspective; I need the money and have too much debt. Really now, who could believe such advocacy given the TPTB - not I.  I just can't believe that the whole scheme would be accepted by the Bank of International Settlements so we can all become equals. I'm so conditioned that I don't even believe I deserve it - who does?  

Sun, 11/27/2011 - 13:50 | 1917876 Franken_Stein
Franken_Stein's picture

The right honorable member even mentioned my name in minute 20.

We are living in a Frankenstein system.

Sun, 11/27/2011 - 14:24 | 1917878 GoodMorningMr.V...
GoodMorningMr.VanRumpoy...'s picture

This guy does a good job pointing out the problems. But his solution is nonsense.

 

 

The only person I’ve seen come up with a workable solution to get out of this nightmare is Dr. Edwin Viera.  Here is a lecture (sponsored by Ron Paul)   that’s  on all the history of U.S. currency and banking systems. Why some systems failed, why some didn’t but were ended anyway. Overall an excellent lecture his solution appears at the 47 minute mark.

Along with ending FRB, his solution involves something that already exists: Digital gold and silver currencies.

http://www.youtube.com/watch?feature=player_embedded&v=k6gMkKmQSW4

Sun, 11/27/2011 - 14:55 | 1918164 TheSilverJournal
TheSilverJournal's picture

Very good stuff. Perhaps the best history lesson on money that I've watched.

Sun, 11/27/2011 - 13:51 | 1917879 Sudden Debt
Sudden Debt's picture

Tyler, can you paste the link to those video's in your articles? They're always offline when i want to look and have to look for them on youtube myself. And i'm a pretty lazy kind of guy so..... PLEASE :)

Sun, 11/27/2011 - 13:53 | 1917885 Franken_Stein
Franken_Stein's picture

You are not allowed to watch that video in your country because your government doesn't want you to know the truth.

Sun, 11/27/2011 - 14:06 | 1917933 Reptil
Reptil's picture

click on the title of the video when it plays, or the little "youtube" button on the bottom right.

saving youtubes (or any .flv format videos), to watch them later, can be done with plugins (Firefox - Downloadhelper).

Sun, 11/27/2011 - 13:54 | 1917889 Smiley
Smiley's picture

"Mumbo Jumbo! Mumbo Jumbo!"

 

Boris Balkan

Sun, 11/27/2011 - 14:03 | 1917901 XRAYD
XRAYD's picture

 

They should rename this program “Stupid Talk” when this woman is the host. She is out to destroy her guests ideas, rather than enlighten her audience by letting intelligent people talk and lay out their ideas in full! There is something to the idea that every American Household be given $100,000 say - instead of the banks being given money to surf the bond curve as they are now doing. Those who owe money could use it to pay if off (to the bankers who lent it to them in the first place). The bankers would have money to lend, instead of writing off bad loans as they are doing - offset by the "income" they earn from the above bond surfing, and accounting tricks. Those who are NOT in debt, could use the $100,000 as they wish .. to spend or to save. Buy gold, stocks, bonds, TVs, vacations, pay off education loans, whatever ... which would be an honest boost for the economy instead of shovel ready projects designed by politicians. Sure, it could create inflation (which is what Bernanke wants), but it might be better than another great depression! With no debt over hang, sensible financial regulation, and a balanced budget amendment, we would have a real instead of a ponzi economy again.

 

Sun, 11/27/2011 - 14:56 | 1918169 css1971
css1971's picture

A classic hardtalk moment. The show exists in this format because of politicians like this:

http://www.youtube.com/watch?v=1KHMO14KuJk

 

Sun, 11/27/2011 - 18:04 | 1918797 WhiteNight123129
WhiteNight123129's picture

There is no easy way out of debt, Krugman and Bernanke are prponent of Santa Klaus economics where noone has to bear the brunt of endless increasevin leverage. This monetary Santa Klaus is on the payroll of a few and is a bastard because he is robbing the little ones to make the cronies fatter. No easy way out of debt someone will pay unless scientists and engineers save the ass of everybody on a historic scale (since we are not living caves anymore obviously -at least I am not-), but the time scale is too short for the debt reduction to be orderly (inflation or bankruptcies is the choice).

Sun, 11/27/2011 - 13:58 | 1917912 topcallingtroll
topcallingtroll's picture

Mark to market everything.
Write off and sell nonperforming loans to the vultures.
Zero out stockholders of the banks.

Give the banks to the senior bondholders. Surprise! You are no longer a lander but an owner!

Rinse wash and repeat every 60 years as people forget and go nuts on the credit expansion again.

Sun, 11/27/2011 - 13:59 | 1917914 Georgesblog
Georgesblog's picture

People believe that everything is good and right, as long as they can go places and guy things. Their mouths say one thing, and their commercial actions say the exact opposite. This is why it is impossible to force a slave to be free. The foundation of the economic system is hypocrisy.

http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/

Sun, 11/27/2011 - 14:01 | 1917926 SheepleLOVEched...
SheepleLOVEcheddarbaybiscuits's picture

i dont like this guy.....maybe after they had Kyle on, they needed someone who fit their regular program better.

Sun, 11/27/2011 - 14:03 | 1917936 theXman
theXman's picture

I have the similar idea as Steve Keen. In fact I came up with the idea three years ago. Now I call it 10-10-10 plan. It's basically the way to recapitalize the population instead of the banks. Here is the idea:

- Each household can apply a special "loan" from the Federal government up to $10K per head (US citizens only).

- The household will have 10 years to pay the loan back.

- The interest rate on the loan is 1% annually, i.e., 10% over the 10 year period (hecne the 3rd "10" in the name).

- Since the US population is 330,000,000, the total loan amount will be about $3.3T (assuming 99% of the population will take advantage of the program), which means it will increase national debt by $3.3T; since increasing debt is counter-productive, that $3.3T shall be monetized by the Fed.

This program, once implemented, will cause inflation to rise; hence Fed should raise interest rates quickly back to normal level of 4-7%. But even with rising inflation the program will benefit the low-income people far more than the high-income people. More importantly, it will greatly reduce private debt and unleash pent-up consumer demands. But because of higher interest rates, it will not result in excessive consumption. 

Sun, 11/27/2011 - 16:17 | 1918456 trav7777
trav7777's picture

JFC, what an idiotic idea.

GENIUS, WHERE IS THE MONEY GOING TO COME FROM TO PAY THESE LOANS PLUS INTEREST BACK?

You don't GRASP how creditmoney works, please shut up.

And fuck low income people.

Sun, 11/27/2011 - 17:55 | 1918772 linrom
linrom's picture

Where did all the money sitting in pile called Private Debt of $44 Trillion come from?

Sun, 11/27/2011 - 17:00 | 1918614 honestann
honestann's picture

Sheesh, another central planner.

This crisis lives until the last central planner dies.

Sun, 11/27/2011 - 14:06 | 1917951 Chartist
Chartist's picture

GM is offering no interest loans for 7 years on certain model trucks.....Is this an indication that interest rates will stay low for 7 years at a minimum?

Sun, 11/27/2011 - 14:21 | 1918012 disabledvet
disabledvet's picture

it's definitely a statement that Wall Street can maintain pricing at obscenely high levels thus forcing you to use credit in order to purchase said item.

Sun, 11/27/2011 - 14:28 | 1918039 Elwood P Suggins
Elwood P Suggins's picture

It's an indication of how desperate GM is to unload the shit they make.

 

GMC - Government Motors Crap

Sun, 11/27/2011 - 14:08 | 1917956 Ted K
Ted K's picture

What you call "Keynesian" really has nothing to do with John Maynard Keynes truly prescribed ideas.  It is the Republicans who are the real cause of this fiscal miss starting with Republicans' spend more and tax less Reaganism in the early 80's.  I might also add it was the "boogeyman" Jimmy Carter who nominated Paul Volcker, not the senile Alzheimer's victim Reagan standing in front of the Irish pub with his fist up as the precursor to idiot "W" Bush telling the world audience "bring it on" and then declaring final victory on a Navy carrier before thousands more young Americans would be killed in the same war.

See if you can spread more lies Tyler about John Maynard Keynes' true ideas, the propaganda of telling toothless Teabaggers with Hitler mustache posters, and ditto head ZH commenters "the sky is red, the sky is red" ad nauseam has worked wonderfully so far. In their minds, the sky is now red. Congratulations to Republicans for your "victory" of trashing this country into the toilet and then blaming it on "darky". Masterful job.

Sun, 11/27/2011 - 14:36 | 1918077 brew
brew's picture

i was waiting for someone to get a little sarcasm going... thanks ted k!

Sun, 11/27/2011 - 15:11 | 1918217 rufusbird
rufusbird's picture

"He is going to pay my mortgage off!"

Sun, 11/27/2011 - 18:17 | 1918822 CrazyCooter
CrazyCooter's picture

Retard.

Every president since EISENHOWER has spent more money, annually, than the previous year. How may years/decades of exponential growth is that by the way?

There was huge inflation drama in the 70s BEFORE Regan for a reason.

Both parties overspend.

Regards,

Cooter

Sun, 11/27/2011 - 14:12 | 1917974 Greenhead
Greenhead's picture

This guy is another pinheaded central planner.  Instead of a jubilee, let those who can't pay lose the asset.  If the bank made too many bad loans, they should fail.  If the borrower can't service the debt, they should be foreclosed on.  Keen wants to create another bureacracy to determine who wins and who fails.  If history and human nature are any guide, I'm pretty sure the friends of the deciders win. 

 

Sun, 11/27/2011 - 15:25 | 1918266 css1971
css1971's picture

His point is, your solution will take 20 years and deflate everything back down to 1980.

Sun, 11/27/2011 - 16:56 | 1918586 honestann
honestann's picture

It will only take 20 years to deflate IF:
1:  They keep printing more debt-money.
2:  They continue to avoid "mark to market".

Sun, 11/27/2011 - 17:20 | 1918669 Troy Ounce
Troy Ounce's picture

No, that is not what Greenhead says.

You clean the system, like capitalism is supposed to work. Any other solution, like Keens' monetary interference, will have unintended consequences, you know, the unintended consequences we're living in right now. Right, says Keen, let's have more interferenc, more unintented consequences, more civil servants who know it all.

In Japan, capitalism is not allowed to work, hence the 20 year stagnation. It can work there because it is, according to Keen "a coherent society", another word for zombies.

What's wrong with a good old civil war?

 

 

Sun, 11/27/2011 - 19:18 | 1919029 Advoc8tr
Advoc8tr's picture

So the bank that lent money it created out of thin air at no cost or effort gets to take the real asset because the person who borrowed the created money and payed the bank interest on said created money for 10 years with actual labour all of a sudden can't afford the repayments because of inflation caused by said money creation by the banks and government.

 

Sounds like an outcome that was planned / desired by the banking elite all along.

 

Agree that less central planning / control is the answer but we need to understand that a debt to bank that created the money out of thin air and then sits back and charges interest it on does not constitute an contract that entitles them to reposses the underlying real asset when the debtor can't service the loan anymore?  I mean the only person in the whole sordid example that has done anything productive is the debtor who has paid regularly for X years with money exchanged for his/her labour/efforts.

Sun, 11/27/2011 - 23:46 | 1919902 QQQBall
QQQBall's picture

 

You are overlooking the Depositors who saved their surplus productivity.

Mon, 11/28/2011 - 02:02 | 1920170 pvzh
pvzh's picture

The person who took the debt is an accomplice in the crime of creation of fraudulent money. Without borrowing by said person, the money in question would not be created by bank. Moreover, that person willingly pledged his/her assets for the money provided. Based on that, I do not see any problem in the confiscation of the assets of the debtor to pay down the debt. These money that has been extended were theft of the savings of other peoples that have been "priced out" due to extension of credit. Paying down the debt, and extinguishing these fraudulent money only serve to restore justice.

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