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Steve Keen On Why Debt Matters "All The Time" And The Need For "Quantitative Easing For The Public"

Tyler Durden's picture


Following his somewhat epic blog debate with Paul Krugman, Steve Keen appears on Capital Account with Lauren Lyster to debunk more Keynesian propaganda and the kleptocratic status quo 'debt doesn't matter' arguments. Poking holes in the stable/exogenous shock equilibrium 'model' versus the real-world's dynamic systems, the Aussie economist warms up with the zero-interest rate conundrum and liquidity trap (at around 7:00); moves on to the empirical falseness of the debt-to-unemployment relationship (at around 11:00) - implying 'debt matters all the time' as Keen explains common-sensibly (but not Neoclassically) that the 'change in debt adds to demand' and that involves banks which breaks modern economic theory (since lending is credit creation not savings transfer).

Echoing the deleveraging from the Great Depression, it could take 15 years of unwinding this epic debt bubble before its all over - but not if the status quo of deficit spending is maintained - as Keen somewhat controversially concludes (at around 13:00) "you can't just cure this with deficit spending [since debt is already beyond the black-hole's 'event horizon'], you have to abolish the private debt as well" by "quantitative easing for the public".


Student loan debt and delinquency is also discussed and its self-referential ponzi-like nature (at around 16:00)...

Keen discusses his controversial idea of a debt-jubilee and the Debt Black Hole 'event horizon' that we are already in at around 19:00... (and notably at 24:30 he discusses how to avoid the 'moral-hazard' of a modern debt-jubilee with no 'advantage' to being in debt)

At around 20:30, Keen relates the drop in bankruptcies to the low interest rate environment warning that this will just lead to an endless zombie state like Japan...

Lie-borgate is discussed at around 21:00 with his view being that the outright fraud confirms his feeling that these bankers are behaving like a parasite on the host of the economy...


"The [quantitative easing for the public] solution is not easy and not straightforward but unless we do it we are stuck on wrong side of the debt black hole's event horizon"


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Sat, 07/07/2012 - 18:32 | 2595463 Poor Grogman
Poor Grogman's picture

Good work mate!

Sat, 07/07/2012 - 18:48 | 2595487 economics9698
economics9698's picture

The bottom line in economics is government, debt, obstacles need to be removed and people will figure out a way to work producing goods and services.  If that means gold, bankruptcy, revolutions, so be it.

Sat, 07/07/2012 - 20:02 | 2595504 Dr Benway
Dr Benway's picture

Steve Keen always has good stuff!


Also, while tenuously on the subject of Australia, look at what those dastardly listed investment companies (LICs) are up to:

Sat, 07/07/2012 - 22:12 | 2595773 kridkrid
kridkrid's picture - for those who like keen, a podcast with him and Chris Martenson.

Sun, 07/08/2012 - 01:01 | 2595895 The Monkey
The Monkey's picture

From my reading, Steve Keen does not correct for the effects of rising or falling real interest rates on growth. The rate of change in rates impacts debt service costs. Falling rates decrease debt service costs (following rollover). You could have a constant level of debt that is net additive to growth simply via the rate of change in interest rates.

Sun, 07/08/2012 - 04:38 | 2595980 Element
Element's picture

Lauren Lyster should be cloned

jus sayin

Sun, 07/08/2012 - 08:33 | 2596056 GMadScientist
GMadScientist's picture

It has a more profound effect on how much credit is created, though affecting how much is paid back can't be ignored, it's certainly not the highest-order term.


Sun, 07/08/2012 - 12:26 | 2596348 BigJim
BigJim's picture

 You could have a constant level of debt that is net additive to growth simply via the rate of change in interest rates.

That's right, Mr Monkey, you can just keep lowering rates forever, and this will lead to infinite growth!

*bangs self on forehead* why didn't any of us think of that before?

Sun, 07/08/2012 - 04:48 | 2595983 Element
Element's picture



Also, while tenuously on the subject of Australia, look at what those dastardly listed investment companies (LICs) are up to:


And have a look/listen to this also:

Audio file:

Sun, 07/08/2012 - 07:53 | 2596040 Zero Debt
Zero Debt's picture

Steve Keen is a total establishment hack, and I can't believe why RT and Chris Martenson let him blurb out his stuff without calling him out for it.

His model is a nominal model that does not consider that when a new loan is taken out, it devalues the purchasing power of money. He even says it outright, "it does not affect your spending on gizmos". That is a complete and utter fallacy. No wonder why his model does not include capital formation, productivity and devaluation of the currency. What will happen when the economy delevers is that the purchasing power of money will rise, which will encourage saving, capital formation and investment. This is going to be seen as falling prices, which allows more purchases, even though the nominal amount may be lower. But, as long as you want good numbers, then, you will have to ignore what the actual life style and living standard is.

The moral hazard of this idea is just mindboggling. No, it cannot be handled, it would amount to a theft, pure and simple. It would make monetary velocity shoot up, bidding up prices of everything, making lives of millions miserable and probably causing deaths in the third world from food price shocks.

And I wonder why he has fans in Spain? Couldn't be because there are millions of people in debt over there looking for a mathematical excuse to get out? Wait until he gets translated into greek.

I predict that this guy could go really far, possibly become a central banker.

Event horizon my a**


Sun, 07/08/2012 - 08:12 | 2596045 Pope Clement
Pope Clement's picture

Not to mention that the concept (of event horizon, black holes, dark matter) is hallucinatory horseshit physics....

Sun, 07/08/2012 - 09:20 | 2596084 Strut
Strut's picture

Not to mention that the concept of the Electrical Universe is hallucinatory horseshit physics.


There, fixed it for you.

Sun, 07/08/2012 - 10:02 | 2596120 Greyzone
Greyzone's picture

Your link goes to a pile of horseshit pseudo-science that doesn't have a lick of actual observed data backing it. You know, the stuff that real scientists pay attention to? Data? Not speculative nonsense? Your link to "plasma based cosmology" is about as real as Bernanke's self-proclaimed mastery of the causes of the Great Depression.

I'm not suggesting Keen is right, by the way. What I am suggesting is that your post is most definitely not science nor anything that would invalidate Keen's analogy - you know, analogies, those things people use to illustrate a concept, not necessarily meaning it literally?


Sun, 07/08/2012 - 12:38 | 2596367 Buckaroo Banzai
Buckaroo Banzai's picture

Electric universe theory offers a tremendous amount of explanatory power. It also accounts for the rather inconvenient parts of Maxwell's Equations that conventional physics has chosen to utterly ignore.

Sun, 07/08/2012 - 13:28 | 2596433 diesheepledie
diesheepledie's picture

"It also accounts for the rather inconvenient parts of Maxwell's Equations that conventional physics has chosen to utterly ignore." Like? ...

This should be entertaining. I always thought Maxwell's Equations were well understood for non-relativistic cases, without any "inconvenient parts" that I noticed. Well maybe you Halton Arp worshipers don't BELIEVE in relativity either ... I don't know. All types I guess. Sometimes I forget this is ZH :-/


Sun, 07/08/2012 - 20:29 | 2597293 diesheepledie
diesheepledie's picture

I guess the single junk is the response. Let me know when you want to explain the "inconvenient parts" of Maxwell's Equations. Your words ...

FUCK ALL BULLSHITTERS! There are way to many of you polluting the world with stupidity.

Mon, 07/09/2012 - 01:45 | 2597951 XitSam
XitSam's picture

Says the guy who fights evil alien invaders from the 8th dimension.

Sun, 07/08/2012 - 13:18 | 2596425 Pope Clement
Pope Clement's picture

Okay genius of the normalcy bias to get you up to speed on plasma cosmology start with Anthony Peratt The Physicist from Los Alamos who worked with the Swedish physicist and Nobel Laureate Hannes Alfenn and also has written the authoritive textbook on plasma cosmology

Sun, 07/08/2012 - 11:20 | 2596225 Stoploss
Stoploss's picture

All the way up until your shitting in a hole and showering in the rain.

That is the ultimate low price.

Oh, and no deleverageing has occurred yet, despite all the punditry to the contrary, which is all lies any way.

What happens if debt jubilee is attempted after all the monetization that has happened? What do you think would happen?

The theory is correct without question, the problem is not just "debt", it's the type of debt which is the issue.

When the FED unleashed the housing bubble, they created a new credit sector made up of entirely private debt, not public debt from the govt.

They are trying to inflate away the private debt the exact same way as govt public debt, that's why it is not working.

Since the deflation is in private debt, not public debt, this whole experiment has been in futility since it is not possible to reverse course from here, (go after private debt now) due to the simple fact it would unleash immediate massive global hyperinflation, before your done with your morning shit. To deficit spend away govt public debt, we start wars somewhere else to make that happen. But when it is private debt, using that same theory means we have to blow our own shit up right? Make sense to you? What does make sense is if you have private debt, don't be surprised if your new lender all of a sudden becomes the state. (I hear their collection methods are somewhat unorthodox.)

So, here we are 4 years later with every single retarded govt in the world locked into the worst possible catch-22.

If you don't fight the fire at the source, your not fighting the fire at all.

Sun, 07/08/2012 - 12:25 | 2596351 diesheepledie
diesheepledie's picture

From someone who (VERY obviously) does not have any higher education in physical sciences. Nice link BTW. And the earth is only 6000 years old don't you know.

Sun, 07/08/2012 - 12:43 | 2596373 Buckaroo Banzai
Buckaroo Banzai's picture

And of course established science has never been wrong before.

Oh wait: the history of science has always been that it is ceaselessly and continuously wrong, until some bold thinkers outside the mainstream fix some aspect of its wrongness. Then of course, that has something wrong with it that someone else has to fix, decades or even centuries later.

I always get a kick out morons like you. Einstein got one thing absolutely right: human stupidity is indeed infinite.

Sun, 07/08/2012 - 12:52 | 2596396 diesheepledie
diesheepledie's picture

Another person with no physics education commenting on Physics. Probably no technical degree at all, or understanding of the scientific method. Yawn ... The mentioned topics, such as black holes: Well they have been observed and are consistent with the theories. Why not just say that stars are a pile of theoretical bullshit? What's with all this spherical earth bullshit? It is so obviously flat! Just because lesser minds like yours can't understand the observations or the theories, doesn't make the theories unsound. I am sick of moron orc uneducated mouth breathers, who couldn't integrate in one dimension giving their opinions on physics.

And from the above web link . Look at the contributers. Have any of them studied physics? They are all disciples of Halton Arp. I personally met Arp and got to watch him speak as an undergrad. Astrophysics prof thought it would be good to invite a speaker with alternative views. He was almost laughed out of the room. Even green physics undergrads had him over a barrel technically and mathematically. Our prof had to reign us in as we had so much fun destroying the guy. It was really embarrassing for Arp.



Sun, 07/08/2012 - 13:13 | 2596418 Ek Onkar
Ek Onkar's picture

"Ain't I at the pinnacle of understanding."  Wonder how many times this thought has occured in the mind of man.

P.S. Anybody seen Higgs' boson? He needs it back.

Sun, 07/08/2012 - 13:54 | 2596452 Pope Clement
Pope Clement's picture

Hey priestly robed dipsheep - Halton Arp is the Galileo of our age and you do not have the gravitas (gravity?) to suck his balls - Please provide us all with a good laugh and bloviate on one of the many hallucinatory theories of 20th century physics may I suggest space/time continuum or maybe the big bang. It because of academic dipsheeps such as you that Arp was even denied access to the large telescopes in the US and had to leave to go to the Max Planck Institute in Germany where BTW he is revered as an intellectual icon of our age.

P.S. Fuck You - advances in science have always been made by an inspired individual and not by a consensus of priests earlier or by academicians today.

Sun, 07/08/2012 - 16:27 | 2596712 diesheepledie
diesheepledie's picture

This: " it has become increasingly simple to test Arp's postulates directly. A recent study stated that:

"... the publicly available data from the Sloan Digital Sky Survey and 2dF QSO redshift survey to test the hypothesis that QSOs are ejected from active galaxies with periodic noncosmological redshifts. For two different intrinsic redshift models, [...] and find there is no evidence for a periodicity at the predicted frequency in log(1+z), or at any other frequency."

Nonetheless, Arp has not wavered from his stand against the Big Bang and still publishes articles "

And any researcher that has rabidly blind cult followers (of which you have demontrated), should be placed under even further scrutiny.

Sun, 07/08/2012 - 17:31 | 2596856 emersonreturn
emersonreturn's picture

diesheepledie: clearly you are still in need of your prof to reign you in.

Sun, 07/08/2012 - 10:17 | 2596141 The Watchman
The Watchman's picture

So you just give the QE money to the banks? How's that working so far? Giving that money to folks to do "Gods Work" is a moral hazzard to me!!!!!!!!!!!!!!!!!!!!!!

Sun, 07/08/2012 - 12:46 | 2596380 Buckaroo Banzai
Buckaroo Banzai's picture

Um, did you watch the video? He wants to give the money to the people, NOT the banks.

The idea actually makes a ton of sense.

Sun, 07/08/2012 - 13:16 | 2596422 Cruel Aid
Cruel Aid's picture

Cash for Clunkers. Here is a bunch of money or no debt. Now keep saving or go back into debt. Buy it now and kill demand later.

This plan would be more pushing it down the road, because people will screw it up and continue to do the wrong thing.

And yes, bank bailouts ad nausium was and is not the right answer.

And debt probably does matter. We shall see.

Sun, 07/08/2012 - 13:22 | 2596431 Buckaroo Banzai
Buckaroo Banzai's picture

Programs like Cash for Clunkers is NOT what Keen is talking about.

Sun, 07/08/2012 - 13:38 | 2596447 diesheepledie
diesheepledie's picture

A disastrous idea. Like the moron zombie horde that is the American sheeple should be given the money? That's insane. It needs to be fully controlled by intelligent educated elite. The Alpha class. They best know how to make productive use of both capital means of production and the lower class labor. Don't trust knuckle dragging pharma-lobotomized celery-people with that!  

Sun, 07/08/2012 - 18:38 | 2597049 The Watchman
The Watchman's picture

Didn't you look at what I responded to? My point was it's a better idea than giving it to the banks and that the moral hazard is already broken because we've already tried giving it to the banks and it didn't work.

Sun, 07/08/2012 - 11:08 | 2596201 fattail
fattail's picture

The velocity shooting up would cause asset prices to rise, which could be another back door bailout of the banks and the moribund housing market, but it may just allow them to put the shadow inventory on the market, and have only a more subdued affect on housing.   I doubt food prices would go up because of the debt jubilee, as americans do not need food, with the size of the caloric stores they are carrying around with them and the fact 46 million are on food stamps.  I doubt the new spending from the debt jubilee will go into food purchases causing food inflation, more likely flat screens and iGizmos.

Sun, 07/08/2012 - 13:44 | 2596453 BigJim
BigJim's picture


 What will happen when the economy delevers is that the purchasing power of money will rise, which will encourage saving, capital formation and investment. This is going to be seen as falling prices, which allows more purchases, even though the nominal amount may be lower.

I haven't heard what Keen's said about capital formation. If he's like a lot of modern economists, he may well have a blind spot there. But falling prices do not necessarily mean more purchases, because if people are up to their eyeballs in debt, it doesn't matter if prices fall way below manufacturing costs, because they simply have no money, or job security to give them the confidence that they will be able to buy things on credit. Meanwhile, businesses are going bust, left, right, and center. A deflationary spiral is a real possibility in a debt-based monetary system where decades of artificially-low interest rates have distorted the economy to the point we find ourselves.

 It would make monetary velocity shoot up, bidding up prices of everything, making lives of millions miserable and probably causing deaths in the third world from food price shocks.

It would make money velocity shoot up in developed world nations that have high levels of debt. That does not describe the third world. We wouldn't be bidding up prices for global commodities particularly because our currency would drop in value.

Beyond reducing corruption, regulation, and taxes, the idea to 'fix the economy' is to re-establish the fundamental link between the price of credit-bought, inelastic assets (houses, chiefly) and the consumer's ability to buy them at non-artificial interest rates, and to shrink the financial sector down from what it is presently - a counterfeiting cartel - to where it belongs, which is being a genuine intermediary in capital transformations (eg risk, time and geographic).

What's the best way to do this? Keen recommends a flood of fiat going out to consumers. The ones in debt would be obliged to pay off their debts, the ones who aren't would be able to spend their 'dividend' (this means debtors are not being unfairly 'advantaged' by the giveaway spree). Banks would have many of their loans paid off, meaning their revenues from interest would shrink drastically. Most of the weaker ones would go into insolvency, and these would be wound up.

Yes, savers would be hit to some extent, because, although the 'dividend' would go to them to spend as they like, the concomitant inflation would lessen the purchasing power of their previous savings. But what's the alternative? For debtors to go bankrupt and the banksters wind up owning everything?

What Keen doesn't address (here, at least) is how we re-arrange the monetary system to stop it all happening again after the jubilee.

Sat, 07/07/2012 - 19:07 | 2595507 Poor Grogman
Poor Grogman's picture

Agreed, in fact I am certain that a great many people have already had that "Great Idea"but shelved it because it is just too damn hard getting it past all the bureaucratic hurdles only to see all the cream skimmed off by the government in the name of.....  "Fairness".

Sat, 07/07/2012 - 21:06 | 2595663 Al Gorerhythm
Al Gorerhythm's picture

Disagree. The system is in need of reboot. No need for war, no need for hardship, no need for the debtor to carry the burden in a system that operates with broken code. 

The bankers have a responsbility in this as well. They pushed for a new system, for the code to be infected, ie they wanted Glass Stegal revoked being fully cognisant of the consequences. The code was rewritten by them to promote unlimited credit extension. They know that crediit brings consumption forward thereby unbalancing the system. They know that the unsophisticated "plebs" would go for it. They had no choice. Grab it or be left behind. Save it and be economically destroyed. They knew, therefore they have a burden to tote as well. Both sides get bailed or the system folds. Equations simply work that way.

Al Gorerythms say so.

Sat, 07/07/2012 - 21:52 | 2595735 All Risk No Reward
All Risk No Reward's picture

Debt Money Tyranny has to end...  that's the STRUCTURAL PROBLEM *NOBODY* in the establishment wants to talk about - or anyone put on establishment TV.

It's FRAUD.  The wealth of the inner party criminals, the bailouts of the inner party criminals, the systematic asset stripping of the inner party criminals...  it is all OUR DEBT - AND WE CAN'T PAY IT BACK UNLESS THE INNER PARTY CROOKS HAVE THEIR WEALTH ZEROED OUT!

Poverty: Debt is not a Choice

Systematically asset stripping society for about 7 decades via Debt Money Tyranny enriched the criminal [D]elites enough that they captures all the major institutions and were able to run their Weapons of Mass Debt bubble / bust operation and create a phantom "dual mandate" to cover for their black letter law crime spree.

I really like Steve Keen, but he's missing one simple point that is CRITICAL - a nation use its debt to generate more profits when its money IS debt.  Sure, a company can within the greater economy - but the nation state can NOT!

The TBTF&J banks or, more correctly, the OWNERS AND CONTROLLERS of the TBTF&J banks, are soveriegns...  nation states are subservient debtors...  the borrow is SERVANT to the lender.

If you want to leanr more about the group that running this con game (Big Finance Capital) and how they justify their crimes against humanity...

The Ultimate History Lesson:

The Ultimate history Lesson Commentary:
Sun, 07/08/2012 - 02:16 | 2595929 Al Gorerhythm
Al Gorerhythm's picture

That too.

Sun, 07/08/2012 - 05:02 | 2595985 WTFx10
WTFx10's picture

The world is a colony of the Rothschild's racketeering empire. That has to end for anything to actually change anything else just keeps them in control. Take off the head and the body dies, it would take balls whacking the current Dons but they seem to play by mafia rules so we should too?

Sun, 07/08/2012 - 12:50 | 2596390 Buckaroo Banzai
Buckaroo Banzai's picture

You are correct, but Keen's solution is a short-term step to get us out of immediate danger within the context of the debt-money system we are trapped in right now. Once the debt has been resolved, only then can the entire system be changed. If you try to blow up the system before you resolve the debt, it will create tremendous imbalances.

Sun, 07/08/2012 - 13:10 | 2596417 All Risk No Reward
All Risk No Reward's picture

A couple problems:

1. Keen never discusses changing the entire system that I've heard.  Nor does he discuss the fundamental flaw in our current system.

2. I don't think you know what "resolving the debt" means when a bunch of criminals, and that's not hyperbole - they are cold blooded criminals on record, run the show.  It means saturating society with unpayable debt, busting society and then taking all of society's chit.

3. The Debt Money Tryanny fraud NEEDS to be exposed, the Debt Money Tyranny needs to end and the Debt Money Tyrants need to be criminally prosecuted and their wealth clawed back so society has the ability to pay back its debt - WHICH IT DOES NOT POSSESS RIGHT NOW as illustrated in the linked PDF, below.

#3 is the only "solution" that doesn't mean empowering the criminals and burying society.  Stockholm Syndrome, while popular, will get you to the dungeon of criminal oligarch h*ll even faster.

Sun, 07/08/2012 - 13:20 | 2596428 Buckaroo Banzai
Buckaroo Banzai's picture

Maybe he does get the bigger picture, maybe he doesn't. It is clear that he DOES understand our short-term problem, and his solution for that is spot-on.

Wars are fought one battle at a time. Let's win the first one, please?

Mon, 07/09/2012 - 11:48 | 2598765 All Risk No Reward
All Risk No Reward's picture

Keen is a good guy and extremely intelligent and infromed - much more so than I. 

But he's never said anything I've heard that indicates he understands the bigger picture:

His short term solution will not be implemented because predators don't bail out their prey.

Keen doesn't understand this...  so his "solutions" won't be real.

Not that he's a bad guy, just that he doesn't wrap his head around the idea that evil runs the system from the top down.


Of course, they won't tell you this, you have to analyze the data and logically figure it out yourself.


  The Ultimate History Lesson:

The Ultimate history Lesson Commentary:
Sun, 07/08/2012 - 14:25 | 2596496 Dr Hackenbush
Dr Hackenbush's picture

The quandary is that "money" is "designed" to be elastic and as such, every cent of the M2 supply is loaned into existence with a theoretical "gradual" retraction.  Therefore a 'large payoff' would dry up all liquidity in the "system".  In such a system, "money" saved is the richer person's way to put the interest off onto the poorer person, wittingly or not, because someone, somewhere, is continuing to pay the compounding interest on introduced "money".   If jubilee were enacted, the only possible way to prevent an utter depression, would be to contract the consumer prices in proportion.  The jubilee concept could serve well as a temporarily fix, as segue into more democratic money system.  But if left as simply bottom up QE, without replacement, it would become far worse the next time around.  

Sat, 07/07/2012 - 23:09 | 2595834 Debt-Is-Not-Money
Debt-Is-Not-Money's picture

99 years ago, the Congress assigned what it is obligated to do under the Constitution (issuance and control of our money) to a private international cartel. This was an unconstitutional act. The Federal Reserve, fraudulent in name, does not issue money, they issue debt based currency, the opposite of money. The passage of the 16th and 17th amendments, the 16th to collect the interest for the FRN's, the 17th to remove control of federal government spending by the states, was a coup d'etat of the United States.

There is salvation here, but it is not widely recognized: neither the 16th nor the 17th amendments were constitutionally ratified. The states should declare them null, void and of no effect. The state legislators would once again APPOINT their United States Senators to go to D.C. to represent the interest of the states. This action would de-fang, kill and bury all lobbyists foreign and domestic as they would have to "work over" each state capitol. An Presidential Decision Directive followed by an Executive Order to declare the Federal Reserve and the 16th amendment unconstitutional, a cancellation of ALL interest owed to the Federal Reserve and the immediate conversion of all FRN's to US Notes (interest free real money) would return the U.S. to our Representative Republic.

All it would take to do this is brains and balls.

Oh well, I can dream can't I?

Sun, 07/08/2012 - 02:18 | 2595931 Al Gorerhythm
Al Gorerhythm's picture

That too.

Sun, 07/08/2012 - 03:18 | 2595956 Poor Grogman
Poor Grogman's picture

For every problem there is a solution, sometimes even more than one.

Society ( not ZHs) is still in "Recognition of the actual problem" phase.

Keens work is useful as it provides another view of the problem that challenges the academic profession head on.

Skeen is not talking gold standard ....


Sun, 07/08/2012 - 08:22 | 2596048 Dr. No
Dr. No's picture

I never understood the desire for the populus to elect the senator.

Sun, 07/08/2012 - 09:28 | 2596087 Debt-Is-Not-Money
Debt-Is-Not-Money's picture

That's because there wasn't one.

The establishment of the Federal Reserve System requires income tax (to pay the interest to the Fed) and removal of state limits to federal government spending. It was a package deal, all three were needed to make the scam work! That's why all three must be removed to cure the problem.

Sun, 07/08/2012 - 12:59 | 2596406 Buckaroo Banzai
Buckaroo Banzai's picture

The rationale for direct election of Senators was that the individual state legislators could be bought off or otherwise compromised by interests that could then install the Senator of their choice. Allegedly, according to the history books, this was happening at the time.

The logical way to look at this is as a struggle between local Interests and national interests. Direct election of Senators allowed larger, national interests (like large corporate interests whose operations were on a national or even international scale) to better compete with local county-level or state-level Interests who were in a better position to apply leverage on individual State Legislators.

Sun, 07/08/2012 - 13:18 | 2596424 All Risk No Reward
All Risk No Reward's picture

I wouldn't believe the Rockefeller and Carnegie "history books" much...

The Ultimate History Lesson:

The Ultimate history Lesson Commentary: Rockefeller and Carrnegie used their foundations to start teacher pensions before they existed.  One caveat.  You had to teach their edcuational protocol.  That's how they gained control of education, to break the free, curious spirit of the student so that they wouldn't actually compete with the monopoly men and destabilize their power structure. The bottom line is that it is easier to fool a completely narcissistic, ignorant, Shangri-La fairy tale believing public than it is to fool state legislatures, so they kicked out the state legislature from the process and market / manipulate their dumbed down, servile, Stockholm Syndrome populace. Now, that's not to say they wouldn't have gamed the political whores in the legislature in due time, they probably would have. Divide and conquer + Judas humani nature is a recipe for disaster - and we will be choking on that disaster in spades soon enough.
Sat, 07/07/2012 - 19:06 | 2595508 headless blogger
headless blogger's picture

agree. But the government needs to quit passing laws for certain big businesses too (so they can load down their pockets with cash...aka bribes). I'm thinking of the bankruptcy you mention. Some people can't even file bankruptcy with certain debts, even if they can only find a minimum wage job. This has to change....Along with MANDATES to force money off people for products (healthcare) they may not be able to afford (because maybe they are paying $400 month for student debt, for example).

The same big companies that bribe Politicians into passing laws that make some little Joe/Jane's life harder, will then file bankruptcy and have bailouts with tax payer money.

It will be interesting to watch the Gov decide the "income guidelines" when it comes to Mandating healthcare. These, political whore millionares, are so out of touch with reality that they will forget to consider the mounds of debt US citizens are in and will likely cause an avalanche of debt defaults by consumers.

Sat, 07/07/2012 - 19:13 | 2595516 Doña K
Doña K's picture

Obama already floated the idea to send gov $3k checks to all men women and children. I say use Ben's helicopter and let it rip. 5k 10k whatever, the smart will get out of debt, the freeloaders and perpetual welfare queens will buy HDTV's and the latest gadgets, Nike latest snickers etc. but some responsible unemployed will refloat and get a new start.

Your take mates  

Sat, 07/07/2012 - 19:25 | 2595534 Rover
Rover's picture

I think Dave Chappelle already did a somewhat similar case study:

Summary: Gold up. Buckets of Chicken ~$600

Sun, 07/08/2012 - 08:35 | 2596057 GMadScientist
GMadScientist's picture

"I'm rich, beotch!"

Sat, 07/07/2012 - 20:03 | 2595584 HungrySeagull
HungrySeagull's picture

Let it rip.

First to go would be the student loans. (Hey that did not cost too much now did it?

Next would fire up the bucket list and get this economy going.

Rest will go into Gold a part and some into Eagles and then the Fiat remaining to three months or more of savings against trouble including medical.

Imagine a whole nation debt free.

Yes some will still spend it all and need more. Pffth.

It wont take but a day or three to send out the Binary money into all the checking accounts in the USA.

And this Nation will take off straight to the moon.

You watch.

Sun, 07/08/2012 - 03:19 | 2595957 The Alarmist
The Alarmist's picture

And then on day two the next debt binge will begin. jubilee in any form sounds great to the debtors, who get to steal my savings over and over again.

Sun, 07/08/2012 - 10:17 | 2596138 Greyzone
Greyzone's picture

The problem is that you don't have any savings. It's been loaned out repeatedly so there are about 14 claims on every real dollar of productive capital in the real world globally. Whoever yanks their "savings" out of the system first will get some but everyone else who thinks they have "savings" will get screwed anyway. So not having a jubilee doesn't save you either. The system collapses and when bankruptcy sorts things out, you'll get about 7 cents on every dollar of savings if you are even lucky. In most cases you'll get nothing, nada, zippo.

A debt jubilee proposed by Keen immediately does several things. First, it clears away massive amounts of debt that are currently holding the economy hostage. It lowers the standard of living of everyone equally by ratcheting up inflation. This means everyone suffers the same levels of pain. And there's no escaping the pain that's coming, boys and girls. The only question is whether we control it or whether it simply steamrolls us. The final thing that such a debt jubilee does is it balances the bank's accounts. Yes, the dollars are worth less than before. Big deal, we've been living through massive inflation for the last 30 years anyway. What's a bit more at this point?

The alternative is to try to squeeze water from a stone (cash from a bankrupt middle class) and that ain't gonna happen. There is no possible way to bail out the banks without incurring some worse form of pain than the pain described above. And in the worst case scenario, the banks don't get bailed out at all and society collapses in a revolutionary mess. For those of you who think this is a good thing, I'd suggest looking at history - only a tiny percentage of revolutions worldwide replace an existing government with one that is more focused on liberty and individual rights. The vast majority of revolutions give you worse tyranny before. So be careful what you wish for.


Sun, 07/08/2012 - 12:58 | 2596404 DosZap
DosZap's picture

And there's no escaping the pain that's coming, boys and girls. The only question is whether we control it or whether it simply steamrolls us.

Your 100% dead on, as they have PLANNED to steamroll us.

New EO today(actually June 6th),Now the supreme kumhander has taken over ALL communications in the event of an :Event:

Suggest folks either get shortwaves while available, and a CB Radio.

Bottom line the Banking cartels have taken over the entire worlds nation states.

Sun, 07/08/2012 - 13:15 | 2596419 DosZap
DosZap's picture

The system collapses and when bankruptcy sorts things out, you'll get about 7 cents on every dollar of savings if you are even lucky. In most cases you'll get nothing, nada, zippo.

That's why most folks in the know are hoarding Gold.

All the Soverigns and CB's..........they are preparing to NOT get left holding something wih NO VALUE.

Sun, 07/08/2012 - 09:49 | 2596111 Mad Mad Woman
Mad Mad Woman's picture

I agree HungrySeagull. Cancellation of people's debt would be great. The economy would take off! New businesses would spring up, we will get back to manufacturing again and create millions of new jobs. Alternative energies would get a huge boost, solar, wind and water power generation will come online, it's all a win win. And then, now here's a novel idea, fair trade around the world. FAIR TRADE. And NO MORE WARS!!

The possibilities are endless!! I would put health insurance companies and hospitals back to what they should be....non-profit entities. It can be done. And it MUST be done.

Sun, 07/08/2012 - 00:08 | 2595869 headless blogger
headless blogger's picture

I don't think they should do it this way. It sounds nice to get 3k but it would be better that they did something about the accumulation of student loans; these are people who were at least trying to better themselves and now are in massive debt with no way out.

I would not give 3k out just for the reasons you state about deadbeat types....which is a big chunk of U.S. these days.

Sun, 07/08/2012 - 09:21 | 2596085 Landrew
Landrew's picture

You speak so flippantly about revolution. Do you know what revolution is? Do you have family, friends anything of value including your gold? At the end of a revolution YOU and I will mostly likely have none of those things left. Stop speaking of revolution like someone who hasn't read recent history. Read about Chile, Peru, Mexico, French, Vietnamese, Cambodia, Tunisia or even our own civil war/ revolutionary wars (76/12). Maybe then you will think we need to find a new equitable system without losing everything our history has accomplished

Sun, 07/08/2012 - 09:55 | 2596114 Mad Mad Woman
Mad Mad Woman's picture

Landrew, there are times where revolution is necessary. And it is necessary now. How are we to find a new equitable system with the current criminals in charge of everything? It won't happen unless there is revolution. You speak as if we will be fighting each other. We will be fighting the powers that be to get the country into a new and better world for us all. There is NO other way. It must be revolution, that is the ONLY way.

Sun, 07/08/2012 - 10:26 | 2596152 Greyzone
Greyzone's picture

How do you know who you are fighting? How can you be sure you won't be bent to some other purpose. Look at the bloodshed of the French Revolution. It turned on itself and destroyed itself. Look at the fighting in Iraq once Hussein was deposed. Look at the factions in Lebanon.

As long as there are peaceful ways to resolve this, I'd prefer the peaceful way. If you've never been shot at, never been in a war zone, then please don't make violence sound like the only romantic solution. Violence is never romantic, and should be the last resort of intelligent people. I don't want to be shot at again. I don't want to have to decide whether to kill another human being again. Let's not go there if we can avoid it, ok? I mean, I will if I must but I don't think we must. 

 "Better that ten guilty persons escape than that one innocent suffer." -- William Blackstone, Commentaries on the Laws of England, 1765-1769

Sun, 07/08/2012 - 10:58 | 2596184 headless blogger
headless blogger's picture

Nobody is going after the PTB. There won't be any "revolution". If these people were going to be rounded up they would have been by now. Most Americans don't even know what is going on. They think things are a little "weird" but most are only thinking about their immediate circumstances. Where we live I've only talked to a handful of people over the years, that understand the situation we are in and can find Afghanistan and Iraq on the map, while the rest simply do not care.

The U.S. is toast. The Elites decided to shelve the U.S. a long time ago and it looks like they are succeeding. Frankly, it hasn't been that hard for them to do.

Sat, 07/07/2012 - 18:50 | 2595491 Aziz
Aziz's picture

I like Steve Keen, but without a proper liquidation of the broken financial system and all the junkie and zombie banks and corporations, "quantitative easing for the public" will just turn into "high inflation for the public" (though QE for the public is definitely superior to QE for the banks under ANY circumstances). Liquidation, then a reset and a new system based on competition, market mechanism, economic freedom and economic opportunity. 

Sat, 07/07/2012 - 19:16 | 2595524 Ignatius
Ignatius's picture

In antiquity it was known that from time to time the debts must be cancelled and perhaps some land redistributed.

I'd guess this sentiment will wrankle some 'purists' here and so be it.  Keen is spot on and smartly pointed to Bill Black's expertise concerning the criminal and fraud aspects of the crisis.

Before you 'down-vote' me consider that if we play Monopoly and I win, do we ever start the next game with me already sitting in the winning position?  No.  Hence, cancel the debts and redistribute some land... etc..

Secondly, and by example, Dick Fuld oversaw the bankruptcy of  Lehman and yet walked away from it with what I believe was a $520 million severence.  In a lawyer's mind, yes, it's 'his' money -- but is it really? 

From time to time a reset may well be necessary.  This is likely one of those times.


Sat, 07/07/2012 - 19:45 | 2595561 Aziz
Aziz's picture

You cancel a lot more debt if you liquidate than if you inflate.

This, more than anything else, is why the Keynesian view is inadequate.

Sun, 07/08/2012 - 14:06 | 2596489 All Risk No Reward
All Risk No Reward's picture

Let's get real here - this has NOTHING to do with Keynesian philosphy, this has all to do with cover for banksters demanding societal benefits.

Keynes is the false narrative - when did these banksters ever claim it was time to reduce the debt during the good times - NOW THAT WOULD HAVE BEEN KEYNESIAN!  But htey NEVER did that - even when they almost balanced the budget in 2000 it was only because of MASSIVE private sector debt made public debt unnecessary to follow the exponential move in credit that they were targeting...

BTW, taking credit and monetary aggregates exponential to actualized production potential was A CRIMINAL ACT!

LYING about a false "dual mandate" proves FOREKNOWLEDGE OF THIS CRIMINAL OPERATION.

Stop allowing the oligarchs to spoon feed you THEIR NARRATIVE.  Think CRITICALLY - that is the ultimate in resistance to this tyranny of the mind!!

If they control the mind, your body will soon follow.

The boot on your neck is gratis, though.


The Ultimate History Lesson:

The Ultimate history Lesson Commentary:
Sun, 07/08/2012 - 21:05 | 2597430 Ignatius
Ignatius's picture

Great links.  Thanks.

Mon, 07/09/2012 - 11:43 | 2598756 All Risk No Reward
All Risk No Reward's picture


They are great - and you are very welcome.

Please share the wealth - and add this chart to the one's above:

Debt Money Tyranny

The WHOLE SYSTEM is fraud engineered to bankrupt society and then control society once we are impoverished.

The people doing this are criminal traitors who are executing asymmetrical warfare and the establishment is complicit - active or ignorant collaborators.

This is CONSPRIACY FACT and this statement is falsifiable.

The chart above and the chart in the previous post (reposted to be complete)

Weapons of Mass Debt

are simply mathematical facts.

If you think this isn't a conspiracy, then get these TRUTHS onto the main stream media.

It won't happen.

"In March, 1915, the J.P. Morgan interests, the steel, shipbuilding, and powder interest, and their subsidiary organizations, got together 12 men high up in the newspaper world and employed them to select the most influential newspapers in the United States and sufficient number of them to control generally the policy of the daily press. … They found it was only necessary to purchase the control of 25 of the greatest papers. An agreement was reached; the policy of the papers was bought, to be paid for by the month; an editor was furnished for each paper to properly supervise and edit information regarding the questions of preparedness, militarism, financial policies, and other things of national and international nature considered vital to the interests of the purchasers."
~Oscar Calloway, Congressional Record 



Sat, 07/07/2012 - 20:53 | 2595656 vast-dom
vast-dom's picture

i've been saying here in ZH for year now that QE for people would be the more effective stimulus.

Sat, 07/07/2012 - 21:13 | 2595692 mendolover
mendolover's picture

And less expensive.

Sun, 07/08/2012 - 00:28 | 2595879 putaipan
putaipan's picture


fuck rocky! DO SOMETHING! fuck rocky! fuck rocky! DO SOMETHING! fuck rocky! fuck rocky! DO SOMETHING! fuck rocky! WHERE'S NADER!?!

Sun, 07/08/2012 - 02:48 | 2595941 persu
persu's picture

I like some ideas Keen presents such as impact of change in net debt on demand. However, not all debt is equal, ie mortgage loans do not increase GDP but support asset inflation, hence these ideas need to be developed further.

I have not found good academic papers on this issue. Can anyone help. Mr Keen is ominously absent from academic databases. He seems to be more busy making polemique. I posted a poor review on amazon on his book and got attacted by a group of cult type ignorant followers.

Sat, 07/07/2012 - 18:33 | 2595464 francis_sawyer
francis_sawyer's picture

Thanks for the weekend Lauren Lyster...

Sat, 07/07/2012 - 19:33 | 2595545 Hulk
Hulk's picture

I'd like to be Quantitatively Squeezed by Lauren Lyster...

Sat, 07/07/2012 - 20:02 | 2595585 HoofHearted
HoofHearted's picture

Hot chick with an Austrian viewpoint...doesn't get any better than that.

Sat, 07/07/2012 - 21:47 | 2595738 Hulk
Hulk's picture

and she's sharp as a tack...

Sun, 07/08/2012 - 03:25 | 2595962 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

pert and perky and very nice posture, but you'd need a long strip of duct tape for her piehole

Sun, 07/08/2012 - 13:09 | 2596416 Buckaroo Banzai
Buckaroo Banzai's picture

Don't be an idiot. She's the rarest of all things: a beautiful woman that you might actually ENJOY conversing with.

I still haven't met one yet, and I've been on this planet for a while now. The vast, vast majority of women (well, american women at least) are fucking clueless, and you want to shut the one up who consistently has something interesting to say.


Sat, 07/07/2012 - 18:34 | 2595466 economics9698
economics9698's picture

I really like Lauren Lyter's tits.

Sat, 07/07/2012 - 18:54 | 2595495 DUNTHAT
DUNTHAT's picture

It's really hard for Lauren to get anybody to concentrate on Economics when we are all thinkin of what it would be like to bang the hell out of her

Sat, 07/07/2012 - 20:06 | 2595589 Freewheelin Franklin
Freewheelin Franklin's picture

Her tits look bigger than what they really are because she has a small frame. She is really cute, though, and would be perfect dressed up in a schoolgirl outfit, if you are into that kinda stuff.

If I were a "breast man", I would take Liz Clayman's tits over all of them.

But I'm a "leg man" so I prefer Nicole Petallides.

However, recently I have been infatuated with Melissa Francis. She seems to have a lot of everything going on.

Sat, 07/07/2012 - 20:43 | 2595645 ihedgemyhedges
ihedgemyhedges's picture

Well, odds are that your hand will have to substitute for all of the ladies you are infatuated with........

Sat, 07/07/2012 - 21:52 | 2595745 Freewheelin Franklin
Freewheelin Franklin's picture

Hand? Who the hell uses their hand anymore except, maybe an 8 year old? With all of the new silicon material technology and robotics technology coming out of Japan, nobody needs to use their hand anymore.


Sun, 07/08/2012 - 03:22 | 2595961 The Alarmist
The Alarmist's picture

Good to know there is someone out there pumping up demand to keep the innovation flowing.

Sat, 07/07/2012 - 21:12 | 2595689 mendolover
mendolover's picture

Don' forget Mandy Drury.  She's been growing on my lately.

Sat, 07/07/2012 - 22:19 | 2595779 stocktivity
stocktivity's picture

Yep...those Fox Business women are so hot and much smarter than CNBC's cheerleaders. I'm sick of Maria B saying "well off the lows".

Sun, 07/08/2012 - 02:02 | 2595921 blunderdog
blunderdog's picture

There is something spectacular about Claman's tits. 

In the class of Hayek, Harring, Hendricks....WTF?  Do I have an H thing?!?

Sun, 07/08/2012 - 14:30 | 2596516 Jack Sheet
Jack Sheet's picture

No "ass-men" around here?

Sat, 07/07/2012 - 18:34 | 2595467 kito
kito's picture

didnt bush2 already give us a public qe? government cheese checks actually mailed to everybody? couldnt keep the champagne stocked fast enough at the local liquor did that work out?

Sat, 07/07/2012 - 20:05 | 2595588 HungrySeagull
HungrySeagull's picture

Oh those little 250 checks?

One vanished into a electric bill past due and another disappeared into a renewal of the termite bill for the year.

It was like inadequate droplets of water hissing off the sidewalk on a hot summer day.

Sat, 07/07/2012 - 21:45 | 2595734 Marginal Call
Marginal Call's picture

It worked pretty good for a minute.  But I only got like $80.  But the lowest incomes got a nice check, promptly spent it all and it went rigth to the same place had he just gave it to the bankers.


The difference is peeps had the pleasure of wasting it and giving it to the bankers, if you just give it to the bankers peeps get angry.  But the bankers are greedy and can't see it, they are just all "gimee da money, all of it", instead of being patient and letting us have a turn with it before they get it all.  


Obviously, the only solution is to QE to the people, not in the hundreds of dollars, but in the pay off your mortgage and make all the paper the banks hold worthless dollars.  /sarc.  I'm still in favor of just executing a few a month in public till they come up with a solution.  /not sarc. 

Sun, 07/08/2012 - 12:50 | 2596392 DosZap
DosZap's picture

didnt bush2 already give us a public qe? government cheese checks actually mailed to everybody? couldnt keep the champagne stocked fast enough at the local liquor did that work out?

Sending $250.00-$500.00 did not do shit, if they really want the economy to jump, send all taxpayers at least 5-10k.Which is NOTHING comapred to what they have given Banks in ONE QE.

Most idiots will go on a binge spend.

Sat, 07/07/2012 - 18:34 | 2595468 bernorange
bernorange's picture

Zombies!  I knew it!

Sat, 07/07/2012 - 18:45 | 2595482 GOLDTEETHSILVER...

Follow the yellow brick road...

Sat, 07/07/2012 - 18:36 | 2595469 dick cheneys ghost
dick cheneys ghost's picture

Could we Re-Hypothecate Lauren's legs?

Sat, 07/07/2012 - 20:05 | 2595592 HungrySeagull
HungrySeagull's picture

Lauren, Lauren and Lauren... sheesh...

Oh wait...

Sat, 07/07/2012 - 18:44 | 2595479 pleseus
pleseus's picture

I would love it if the Fed paid off my mortgage and car. In return I would buy more shares of Apple and Netflix.

Sat, 07/07/2012 - 20:42 | 2595644 Zero Govt
Zero Govt's picture

don't kid so, i think that's 'The Plan' with the Fed and the banks in a nutshell

Fed scrapes up the poop left by bad bankers and funds their continued gambling

Sat, 07/07/2012 - 18:47 | 2595486 steve from virginia
steve from virginia's picture


The economists pull their hair out trying to make the waste-based economy 'work' and provide benefits to anyone other than a handful of billionaires.

It can't it's impossible. Even the brilliant Keen can't square this circle.

Here's a suggestion:

 - Take the billionaires and cut their heads off on television with a samurai sword. There aren't that many billionaires so the show wouldn't be boring.


It would be a 'ratings winner', more fun that 'Dancing with the Stars'.


Sat, 07/07/2012 - 18:51 | 2595493 economics9698
economics9698's picture

When money is backed by gold or silver people get paid what they are worth.  Fiat and inflation create wealth inequality.  Why do you think so many on thsi board want to end the Fed, they know its fucking bull shit.

Sat, 07/07/2012 - 18:56 | 2595496 steve from virginia
steve from virginia's picture


Cut Bernanke's head off with a samurai sword along with the rest of them.

Cut off Buffett's head and embalming fluid will come out ...

Sat, 07/07/2012 - 19:06 | 2595511 Red Heeler
Red Heeler's picture

"Cut Bernanke's head off with a samurai sword along with the rest of them."

Decapitation is the sincerest form of battery.

Sat, 07/07/2012 - 20:08 | 2595594 HungrySeagull
HungrySeagull's picture

Don't forget two coins for the boat keeper to take the soul across. Pay the executioner.

Samurai is all good, I prefer a proper Claymore Broadsword.

W A C K!


Can we discuss doing something else?

Sun, 07/08/2012 - 13:15 | 2596420 Buckaroo Banzai
Buckaroo Banzai's picture

The French already tried doing it like this, it was called the French Revolution, and it was a fucking disaster.

Sat, 07/07/2012 - 22:00 | 2595755 All Risk No Reward
All Risk No Reward's picture

"Economics" was engineered to hide the fact that a few oligarchs rigged Debt Money Tyranny to our monetary system and that their wealth, quite literally, is society's unpayable debt.

Using an analogy to drive home the point, it is like economics was created by Jeffrey Dahmer in order to equate a family of 5 at Thanksgiving dinner to Jeffrey Dahmer and 4 drugged out teens - simply because each is a group of 5 people.

The only real differences being Dahmer hadn't captured the government, isn't nearly as good at marketing and Dahmer eats more than Muppet faces, so he's less wasteful.

Sun, 07/08/2012 - 09:46 | 2596106 Debt-Is-Not-Money
Debt-Is-Not-Money's picture

Katana by Hattori Hanzo!

Sun, 07/08/2012 - 10:03 | 2596122 Mad Mad Woman
Mad Mad Woman's picture

Start with the Koch brothers. End it with Donald Trump. That one would be highly entertaining. He'd be talking his fool head off and then chop off his head while he is in mid-sentence. LOL

Sat, 07/07/2012 - 18:50 | 2595490 jomama
jomama's picture

lauren = rawr.

Sat, 07/07/2012 - 20:09 | 2595597 HungrySeagull
HungrySeagull's picture

RWAR corrected for you...

"So solly, frying pan for uppity hubbie need work."

Sat, 07/07/2012 - 18:50 | 2595492 kito
kito's picture

speaking of zombies and other frightful horror flick type personalities, isnt it just scary the way keen, in one moment, conveys a logical argument about debt and spending, and then, WHAM, the keynesian devil jumps into his body, takes over, and starts spewing things like PUBLIC QE GIFTS?????? somebody bring us an exorcist, quick!!!!!!!!!!!


Sat, 07/07/2012 - 19:13 | 2595515 Poor Grogman
Poor Grogman's picture

You cant deprogram everybody in one day...


Steve "gets it".

He is now pointing the finger at "credit creation ex nihilo"

and asking economists to "show me where that is in your model"

Sat, 07/07/2012 - 19:30 | 2595543 jimmyjames
jimmyjames's picture

WHAM, the keynesian devil jumps into his body, takes over, and starts spewing things like PUBLIC QE GIFTS?????? somebody bring us an exorcist, quick!!!!!!!!!!!



Pretty good analogy and Keen has a fair bit of stroke-has won international awards from economists-speaks at some really money heavy conferences-politicians etc.

My question to you is--why would you hate gold when this sort of economic voodoo is being discussed?

Sat, 07/07/2012 - 18:58 | 2595501 I am Jobe
I am Jobe's picture

More Student Loans is the answer. Yeap, more slaves needed to drain the system.

Sat, 07/07/2012 - 19:07 | 2595512 RobotTrader
RobotTrader's picture

Treasury Market screaming higher despite the "Fiscal Cliff".


Krugman says print more and I agree.

Sat, 07/07/2012 - 19:23 | 2595530 dick cheneys ghost
dick cheneys ghost's picture

Festivus is our Heritage

Sun, 07/08/2012 - 09:28 | 2596088 Landrew
Landrew's picture

Print more as in TIPPING POINT? I could understand driving the failed system to it's final end at a much faster rate and rebuilding a new system for and by the people. You have been hiding since your failed calls on equities. Why hide embrace your failure and move forward. I have ha!

Sun, 07/08/2012 - 15:16 | 2596586 DosZap
DosZap's picture

Krugman says print more and I agree.


If they use it in the same ways they have,the results are the same.

Why not use QE funds to hire, and rebuild our crumbling infrastuctue,highways,bridges,dams,etc,etc.

Thats how to get the economy working again, if people are not working, there is NO economy.

Sat, 07/07/2012 - 19:12 | 2595514 headless blogger
headless blogger's picture

There's about 5 places I've been watching and reading economy: Zero Hedge, Mike Krieger, Max Keiser, Azizonomics, AND Lauren Lyster's Capital Account. Like Max, she always has people on her show that actually make an econo-mut like myself, at least half-way understand what's going on.

Sat, 07/07/2012 - 20:10 | 2595535 razorthin
razorthin's picture


Firstly, I'm for NO bailouts.  But must they be, bail EVERYONE out; then can the fractional reserve fiat system; start over with a sound money, egalitarian framework.

Only fukking fair.  The a$$holes who created this death trap for its proletariat deserve no advantage.  I'm sorry, it's either that or OFF WITH THEIR HEADS. You can say that lowly people who got over their heads deserve to be slaves.  But I say when you are dying of thirst, you will drink your own piss.

So fukk off.

Sat, 07/07/2012 - 19:49 | 2595566 spooz
spooz's picture

QE for the people seems the fairest way to address deleveraging.  I think the effect would be a healthier economy, which would make for a stronger dollar, not hyperinflation.

Sat, 07/07/2012 - 19:52 | 2595569 q99x2
q99x2's picture

People on SSI need to have their rent paid. It is not their fault they weren't born to be workers.

Sat, 07/07/2012 - 20:11 | 2595604 HungrySeagull
HungrySeagull's picture

No it is not the fault.

What can be done is to stabilise the Nation so that there is a fresh start.

But it must be done in a way that provides no one an advantage other than simple debt eradication.

Sat, 07/07/2012 - 22:06 | 2595761 itstippy
itstippy's picture

Dammit, NO!

I have no debt.  I have a modest house and a modest car and some savings.  I'm proud as Hell of them.  What I have I PAID FOR, through my labor.  I worked my ass off and did without a lot of luxuries to get ahead and be debt-free. 

No public funds to bail out anyone, be they individuals or corporations.  If your debts are beyond your ability to pay, file for bankruptcy and start over.  Stick it to the banks through bankruptcy, they deserve it.  But you don't get a free house and car and college education out of it.  You BOTH start over from scratch.  It's not the government's role to bail either of you out. 

Sun, 07/08/2012 - 08:45 | 2596060 putaipan
putaipan's picture

what keen is suggesting is "they" would have to pay down their debts, you would get a little casheesh.

Sat, 07/07/2012 - 19:52 | 2595570 Crab Cake
Crab Cake's picture

The older I get the more absurd "modern" man looks. Qe for the public? Its called a jubilee, and it was long long ago realized to be the only real solutiion to debt gone wild.

Sat, 07/07/2012 - 20:10 | 2595599 HungrySeagull
HungrySeagull's picture

The older I get, the more the young look better and better. Maybe those bath salts aint so bad after all.

Sat, 07/07/2012 - 21:04 | 2595634 Al Gorerhythm
Al Gorerhythm's picture

I'm guessing that you didn't read or listen 'till the end or have missed the salient points (Cog D barrier).

As Mr Keen said, the old jubilee was a simple beheading, of the creditor.

His suggested modern version, (validated by the logic in his explanation of the necessity for a healthy balance between debtors and "credit extenders"), explains why, on this iteration of the financial "event horizon", it is vital to the system to save both sides of the equation. You can't have a a healthy fiat system if you only bail out one side of the financial economy. One side symbiotically depends on the health of the other, regardless of which side of the equation. A bailed out banking system is not going to affect the health of the debtor side, particularly if the debtor side is bereft of the capacity to pay. Similarly, you can't bail out the debtors, as this cancellation of debt would destroy the banks income stream, destroying the system. In both cases, the system becomes unworkable.

To rebalance the whole system, it requires a jubillee for both sides , rebooting the system. The bankers can extend credit again, keeping their system; and the debtors are healthy again, able to pay.

His reasoning in this case can be further supported; this time it is different, it is notable thatThis Time, the creditors are also in debt. The smaller casinos have broken their business model by gambling in other casinos. Debt is on both sides of the equation, further validating Prof. Keen's solution.


Sun, 07/08/2012 - 03:28 | 2595964 The Alarmist
The Alarmist's picture

I listened to the end, and what I heard was that the debtors get free stuff and I get some compensation in the form of debased currency value to cover a mere fraction of the losses I suffer on my invested assets that have been stripped from me to cover the jubilee. and once we have done jubilee, how long before the next debt binge?

Sun, 07/08/2012 - 10:41 | 2596169 acetinker
acetinker's picture

I would ask what is your portfolio made up of?... But I won't, It's none of my business actually.  However, if your assets are "notional" as opposed to physical, I'd say you don't have any real wealth anyway.  In reality, they're only worth whatever someone else will give ya' for 'em.  Hey, it sounds like you learned the game and played real good.  Problem is, the whole premise of the game is that it was designed to fail from the get-go.  The day of reckoning looms before us.  This charade will end.  Question is; How?

Best of luck to you and yours. No offense intended.


Sat, 07/07/2012 - 19:56 | 2595576 slewie the pi-rat
slewie the pi-rat's picture

so what?

people been saying the same stuff here on zH for years

i don't watch MSM clips so i dodn't get to see how intelligent he looked around 21:00 with that  feeling that these bankers are behaving like a parasite on the host of the economy...

so now sKeen can feel it so we know it is true?  Hahaha!  what kind of a lame fuking joke is this?


Sat, 07/07/2012 - 19:57 | 2595579 Hulk
Hulk's picture

Whatever the joke be, it be on us...

Sat, 07/07/2012 - 23:16 | 2595643 Al Gorerhythm
Al Gorerhythm's picture

sLewie, the banks are canabalizing.

the wUnder kid speaks the speak for many moons. Well before ZH, well before 21:00, well before 2007 even. No joke.

the parasites are ConSuming their own.

Sun, 07/08/2012 - 00:16 | 2595846 slewie the pi-rat
slewie the pi-rat's picture

yes, i know

and it iis so wonderful to have it here on TV too! for those who would only would like to watch it again.  and again

too bad nobody has anything new for tyler to put up! 

that's a joke;    get it?  Hahaha   Ha

i wouldn't want to disrespect anyone who has said this since when?  2007?  okey dokey! 

nothing new since 2010?  not too much on zH about what the FED's actual job decription is under dodd/frank

why don't you write a short para of what the FED is doing since 2010?  what was its job before dodd/frank?  after

maybe it's just me, but it seems people on zH don't know!  i may be the only person currently writing about it.  i simply did a search and found quite a bit which helped me understand what the banksters have been up to recently

maybe sKeen could use a little help understanding what he has been seeing for the past TWO years from the FED;  think about it!

as i said i didn't waste my time watching so maybe he covered it and tyler just fast forwarded over the boring parts to see if QE was coming?

hint:  it isn't moral hazard or zombies... 

good luck if you try to figure this out all by yourself al_go!

i have written of this many times, but you may not be here enough to follow what the actual dialogues have been what with all the poilitical nonsense;  it isn't very complicated, i don't think, but from much of the current stuff here and elsewhere, you would think dodd/frank was still in committee or something as far as what it says about banking, credit, and the regulatory role of the FED 

until you understand what the FED is trying to do, as per recent legislation, how can people evaluate how well it is doing?  how is that going for you?

everybody listens to every breath of the FED as if it contained the answer

the answer is in the legislation, imo

people might like to examine the recent law in this respect;  or they could spend another two years repeating what they've been saying since 2007 if that is easier, i guess... 

after all this time, if this is on MSM does that really mean it is true?  now?  still?

i'm sorry if you don't understand my point;  everyone is talking about economics as if dodd/frank was still being written;  it was signed 2 years ago, as far as slewie can tell;  and it has a LOT in it, ya know!  thousands of pages!

do people know what it says, or not?  does tyler?  mark grant?  can you find an article in the last month on zH which addresses "economics" from the standpoint of what the FED is TRYING to do?  based upon its actual JOB DESRIPTION? 

you will find every imagineable nonsensical theory based on what some guy in dallas, or SF, or janetYellin said, or the chairsatan;  but nothing on what their JOB is now, how it changed two years ago, and how they are doing with the new tasks, based upon observable data

pretty basic and simple stuff, really, but we just don't get it covered here b/c it doesn't lead to QE guesses or doomerism, but rather to answers and new ideas, and different questions

if you had noticed my comments and concerns prior to this, i'm sure you would be up to speed about what i am doing, b/c it really is easy to find the answer to the question[s] i pose

otherwise, how the fuk would a dumbass like me know the answer in the first place?

so turn a search engine or three loose on:  "FED job description under dodd/frank" and then, in 20 minutes, you too, will be able to answer there questions for yourself:

  1. is there any evidence in this video clip that sKeen actually understands the current job description of the FED?
  2. is there any evidence on zH that tyler actually understands the current job description of the FED?

<cue Final Jeapardy Music>

Sun, 07/08/2012 - 00:48 | 2595889 Vic Vinegar
Vic Vinegar's picture

In all seriousness it would be great if you would do a guest post on Zero Hedge.

Sun, 07/08/2012 - 04:46 | 2595969 slewie the pi-rat
slewie the pi-rat's picture

thanks, V_V, but just take a few minutes and check it out for yourself

the thing is that the answers are so simple that people will not accept that this is wtf the FED is actually doing

they are BRAINWASHED into thinking that nobody can figure this out b/c it is all this boilerplate and banking stuff

i only work below the line;  also:  s.i.m.p.l.e.

tyler gives everyone here complete freedom to publish everything including the money shot, if you got one

the answers are available and i have published my attempts at them several times below the line already;  i believe they are the same answers you or tyler or any reasonable person would see if you took a little time and did the simple research

anyhow the complete slewienomics work-up has been on the innerwebs on zH under the slewie flag for way over over three weeks;  i have been working with these ideas here that much, recently

people who monitor leading-edge economic commentary world-wide are already taking note of what i have been publishing around these very questions on just about a full-time daily basis for about a month now

trust me

again:  if you try to understand me or anyone else and find it too chaotic, please do some simple basic research for a short time yourself, Vic;  write one simple sentence summarizing the new job description;  write another describing what the FED, the Treasury and the budget-building and approving Congress are trying to accomplish;  i can write the 2nd sentence in ten words;  i can do the first in 8 words;

what do you get when you do a short simple web search?  then if you look at the simple questions, what might be your thoughts about some simple answers?

my work is my work;  on this, it is already done

just off-hand, i have probably spent 150-200 hours in the last 3 weeks getting these ideas shaped published and edited

sorry you didn't catch more of it

maybe next time

Sun, 07/08/2012 - 19:33 | 2597172 Left Right Wrong
Left Right Wrong's picture

Serious question: can I follow you on Twitter? What's your handle?

Sun, 07/08/2012 - 02:10 | 2595918 Al Gorerhythm
Al Gorerhythm's picture

Cheers, sLewi. I'm on it, thanks for the GPS marks. There may be a valid reason for folk to think that Dodd/Frank was still being written. I's because it hasn't been implemented and thaat may be because it probably still hasn't been read by concritters.


Sun, 07/08/2012 - 04:41 | 2595979 slewie the pi-rat
slewie the pi-rat's picture


i haven't read it all either;  i haven't read more than a few paras of the actual legislation

and we are responsible for zH, not congress.  they got it easy!

your point about it not being implemented is well taken, but if we go away with "dodd/frank is not being implemented" we would also be 100% wrong

when jamie was up for being naughty, those hearings were about dodd/frank provisions and they had been scheduled in the original legislation, had they not?  these were the "volker rule" hearings;  the congo and the banksters and the cameras were s'posed to show us all dilligently figuring out what "safe" parameters are for gambling with federally-insured sheep droppings and other fiduciary stink-piles

we're just shot-tossed and bong-ho'd BiCheZ recovering from one damned media party after another.   is tyler trying to get us on TV?

one of the law reviews (not sure which think-tank owned it) went into how the FED could now make up regulations to suit the situ depending on what was happening and who was playing that night @ johnny's or something

b/c the FED has a job to do with the economy and i do not believe it is still "growth"

congress took the FED's foot off the "growth/employment" gas pedal and said your job is now: economic ____________

congress to the FED:  are you shitting me?

FED to congress:  who, me?

congress>>>FED:  listen!  are you fuking shitting me?

FED>>>congress: ...maybe...  who repealed glass/steagall?

congress:  who told us to?

FED:  listen!  give us twice the power and call it regulation!  let us control everything;  we have the computing power in the banks;  we can just make things up as we go along;  give us a new job description...?   ?  economic...?   what could we use there? economic  __________ ?   hmmmm....? be continued...

Sun, 07/08/2012 - 09:35 | 2596094 Landrew
Landrew's picture

Funny, I think that is exactly how it went ha! Bravo, you have to write that for distribution. Fed/Congress comic strip? Drunks making shit up shitfaced at the capital hill bars ha!

Sun, 07/08/2012 - 11:41 | 2596261 Muppet Pimp
Muppet Pimp's picture


Sun, 07/08/2012 - 05:10 | 2595987 slewie the pi-rat
slewie the pi-rat's picture

there is also the anti-bailout aspects which at least appear to insist that TBTF does not = more US Debt for bail-outs by setting "rules" for FAILING

al_go, aren't corporations supposed to be able to FAIL if they are insolvent and bankrupt?

i have been ranting all along:  how the FUK can a corporation which is designed BY DEFINITION for failure via "limited liability" [it can fail and not pay it IOUs and there is no recourse beyond the owners' "capital" in the legal self-governing entity]  not be "allowed" to fail?

now, beyond the fact that congress may be spending 3X the money it should be, this here is a lulu of a national dilemma which has already cost us maybe $5 Tril or $30 Tril  or ?

how can a private corporation not be allowed to fail at public expense?

our lawmakers gathered and took a look at this very question and they decided what everyone over the age of 12 already knew:  it can't happen!  it ain't right!  if a corporation fails we don't owe it money for no reason!   and they FIXED it!  thank goodness!  what a country!

now our political propaganda leads us to perceive that the democrats passed dodd/frank to try to straighten out some other mess they or the other guys had caused depending on how you look at it

therefore, the republicans must take it down!

so if this is the political question, what do people think? 

we should repeal dodd/frank b/c mittens hates barney, biblically?

b/c it is too long?

b/c somebody hasn't read it?

b/c bill and mike and sally didn't vote for it in the first place?

we know we are supposed to vote for mittens b/c socialism is BAD and he will repeal this law signed by his predecessor.  don't ask why!

vote for mittens!

Sun, 07/08/2012 - 02:20 | 2595932 i-dog
i-dog's picture


"but we just don't get it covered here"

... and, true to your claim of everyone else's motives, you don't explain it either!! Sheesh....

Sun, 07/08/2012 - 04:05 | 2595973 slewie the pi-rat
slewie the pi-rat's picture


i have already explained it 1/2 dozen times here in the last 3-4 weeks, i_dog 

"fully"?  weelll....  Hahaha!

Sun, 07/08/2012 - 08:02 | 2595984 i-dog
i-dog's picture

OK, Slewie ... so you've explained it 6 times within your own 600 posts among 90,000 other posts ... a-a-a-a-a-and ... I've missed it! Dang! How could that possibly have happened?!

If you don't mind -- if you're not too busy! -- would you care to summarise in 2 sentences?

1. The FED's new job is .................

2. The FED has [not) been .......................


PS. From memory, I thought the FED's new job under Dud-Fwank was to set up some kind of consumer complaints bureau! ... for people to report faulty toasters ... or sumpin'... Am I right? Is that it?

Sun, 07/08/2012 - 09:40 | 2596100 Landrew
Landrew's picture

I think you need more info than that from your questions. Toasters, either you are being funny or you have lot's of homework to do.

Sat, 07/07/2012 - 20:05 | 2595591 CreativeDestructor
CreativeDestructor's picture

Haha, just imagine big banks allowing FED to give money to everyone for a modern debt jubilee.  Hahahahahaa can not happen, will not happen.

Instead anks will take all the money from FED and decide what to do with it. I.e. serfdom till you, your children or grandchildren are alive.

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