Steve Keen on the Minsky Singularity and the Debt Black Hole’s Event Horizon!

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Welcome to Capital Account. Greece drops demands for softer bailout terms, fearing rejection from international lenders. Australian economist and Debunking Economics author Steve Keen will tell us if this is a case when debt deflation wins and the real economy loses. In the US, new jobs numbers disappoint again. However, the number of consumer and business bankruptcies are falling and could end the year at the lowest level since the 2008 financial crisis. Is this good news? Maybe not, as it may be due to rock bottom interest rates. Also, student loan delinquencies are rising. Economist and Professor Steve Keen will talk about the toll that too much debt can have on an economy once it has broken past the “event horizon.”

Plus, UK authorities open a criminal probe into the attempted rigging of LIBOR. Meanwhile, a US bank regulator warns banks are taking increasing risk as a result of ZIRP (zero interest rate policies). Have we reached the event horizon of a Minsky singularity, which is sucking us into a black hole of all consuming debt? Is this the point of no return? There have been many efforts to paper over the debt, but it hasn’t gone away. Economist Steve Keen, author of “Debunking Economics: The Naked Emperor Dethroned,” will explain. He agrees that ZIRP is resulting in increased risk taking by banks. Yet the bad practices of banks, including the manipulation of markets and profiting from ponzi schemes, are ignored in the economic models of academics who influence policy. Professor and economist Steve Keen will tell us how this is possible.

25 thoughts on “Steve Keen on the Minsky Singularity and the Debt Black Hole’s Event Horizon!

  1. Wanna get Keen’s stand on Glass Steagall. No more bailouts for the banks AT
    ALL. We don’t owe them anything, they have robbed this country enough. If
    we don’t split the investment and commercial banks, they will just throw
    depositors money into the black hole and when it disappears go to
    Washington with their hand out. Those who don’t study history are doomed to
    repeat it.

  2. Another great show, Steve Keen is onto something with his debt
    jubilee/moratorium idea.

  3. Good job, definitely one of your better interviews. One thing not addressed
    by the professor is the inflation factor. Since the private debt was
    created by the banks with fractional reserve lending, if the fed prints
    more money, you’d better change the fractional reserve lending policy, else
    we’re creating an even bigger bubble, with massive inflation. The way ben
    has done QE hasn’t added velocity to the money, albeit Prof Keen’s will add
    ALOT of velocity causing price increases for everyone.

  4. Of course not !! Banks and rating agencies are the main culprits. My point
    is QE is bad. Bailing out lenders is definitely far worse than helping
    borrowers. But in either case QE hurts people who were never even a part of
    those transactions.

  5. He forgot to mention intest payments on debt. Increase in debt increases
    demand in the short term, Repaying the principle takes away as much demand
    as it created up front. But paying interest on the debt takes away from
    earnings, and does not create demand. Debt spending takes away from demand
    in the long term.

  6. I Love your show Lauren, is it somehow possible to watch it in HD outside
    the US? Hulu.com doesn’t work here in Europe (which kind of lacks critical
    news)…

  7. So Lauren, I am asking again,do you invest in Gold and Silver ? You have
    some great guests that are very wise,what is your peception from them as a
    whole. The price of everything is going up and the price of PM’s are going
    down….what gives?

  8. I invest in food, water and shelter. Ok, so not so much invest in as
    “borrow to pay for.” Is there a better strategy? Besides suicide, I mean.

  9. Seems as though Dr. Keen wants to reset a dying model by eradicating the
    debt. My question is, if the system remains virtually unchanged, how long
    before we are in this debt trap again?

  10. The Perfect Storm for ‘Euro Titanic’ – Santelli Meets Farage
    video.cnbc.com/gallery/?video=3000100509&play=1

  11. Both is true In fact, inflation is a ‘natural’ economic phenom.. a good
    exemple of ‘natural’ inflation could be a shop syndicate, cuz if u
    increases minimal wages u will have to increase the boss salaries too. This
    is the basic inflation creation model since WW2. What @forjugadname was
    describing is the new way of inflation creation.it’s what M.Keiser’s use to
    tell. so its a bunch of supercomputer that make billions n billions of
    trade a day to manipulate the markets. JPM alone makes 180M aday

  12. If math, logic, reason, bending over backward to help those who are lost in
    mental wastelands oblivious(?) to very basic math, etc. on&on&on – if all
    that worked, there’d be no problems. There’s no shortage of relatively
    simple solutions to problems people get themselves wrapped up in. But
    people self-destruct via bad decisions-& they make exactly the same f-ups
    over & over. Most ppl are children their entire lives. As such they f-up, &
    expect others to rescue them (govt/frnds/fam) + cheat/steal

  13. Debt jubilee. No thanks. When a “saver” places their currency with a bank
    they become a general creditor. They had a choice of holding their hard
    currency, gold or other PM, stocks, bonds, etc. They chose to put the
    currency in a bank. I disagree with FDIC insurance, but it does exist and
    to the degree savers have deposits in alignment with the FDIC limits, they
    should be made whole on those amounts. Amounts over FDIC limits should be
    subject to loss when the bank goes completely bankrupt or is subject to a
    reorganization.

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