Comments on: Steve Keen’s DebtWatch No 31 February 2009: “The Roving Cavaliers of Credit”

By: T-Shirts for Kosciousko « KeenWalk.com.au

T-Shirts for Kosciousko « KeenWalk.com.au — Wed, 10 Mar 2010 06:31:05 +0000

[...] entirely for the house price bubble–there I point the finger at a financial system which is always willing to finance a Ponzi Schemewhen one can be found. But it’s clear that the First Home Owners Grant seeded the Ponzi Scheme [...]

By: T-Shirts for Kosciousko | Steve Keen's Debtwatch

T-Shirts for Kosciousko | Steve Keen's Debtwatch — Wed, 10 Mar 2010 05:45:12 +0000

[...] entirely for the house price bubble–there I point the finger at a financial system which is always willing to finance a Ponzi Scheme when one can be found. But it’s clear that the First Home Owners Grant seeded the Ponzi [...]

By: Could rusting cash be a way to deleverage? - Page 3

Could rusting cash be a way to deleverage? - Page 3 — Sun, 07 Mar 2010 00:22:14 +0000

[...] [...]

By: Jamie Galbraith’s Dog Whistle: A Dishonest Defense of Deficits « Re: The People

Sat, 06 Mar 2010 19:53:11 +0000

[...] years of unpaid labor is what gives the bank’s ability to create money a real social value. (Steve Keen has made this argument on many occasions.) You turn a valueless piece of paper into something with value – but, only as long as you [...]

By: Chartalism vs. MMT

Chartalism vs. MMT — Thu, 04 Mar 2010 17:34:54 +0000

[...] contradictory and intellectually incoherent behaviors. -Joseph Stiglitz Once you've debunked the money multiplier fallacy, it's clear that an interest rate hike is a crude, reactive tool for dealing with debt and [...]

By: Are we better off with Fiat or should we return to the Gold Standard - Page 7

Are we better off with Fiat or should we return to the Gold Standard - Page 7 — Tue, 02 Mar 2010 05:16:00 +0000

[...] [...]

By: Chartalist & Circuitist analyses of money - Page 2

Chartalist & Circuitist analyses of money - Page 2 — Tue, 23 Feb 2010 06:03:10 +0000

[...] need a required reading list to make this a productive discussion. Nick, Steve's circuit models of endogenous money creation make it clear that the banking system can generate boom/bust cycles on its own, without any help [...]

By: The American Conservative » Sooner or Later, Inflation

The American Conservative » Sooner or Later, Inflation — Sat, 06 Feb 2010 00:49:24 +0000

[...] Frankfurt School of Finance and Managment professor Thorstein Polleit gives a sobering overview of just what we’re in for, as the Federal Reserve increases base money from $870.9 billion to $1735.3 billion in just five months, with much more to come. There is a bit of disagreement in Austrian-ish circles as to when inflation might hit — Mike Shedlock, for example, has argued that we’ll experience deflation first. (Some of the disagreement hinges on the definitions of “inflation” and “deflation” — whether prices, base money, credit, or something else is the key measurement.) I suspect that the deflationists are right in the short term: the annihilation of so much ledgerbook money should create a deflationary pressure. But the Fed is doing everything in its power to print its way out of deflation — which would actually be beneficial as a correction to the inflated real estate, stock, and other prices we’ve seen over the last 20-odd years — and into inflation. Shedlock argues that as long as the banks aren’t lending, we won’t see inflation, and Polleit notes that they have indeed massively increased their excess reserves (from $1.9 billion to $798.2 billion so far). Trouble is, eventually the banks will start loaning out that money again, which is when inflation explodes. (Though even here, some economists dissent from the idea that base money leads the creation of credit money.) [...]

By: Incorrect

Incorrect — Fri, 05 Feb 2010 07:26:42 +0000

Steve,

thanks I see what you mean. That’s the problem with so much to read and litte time to read it.

By: Steve Keen

Steve Keen — Fri, 05 Feb 2010 05:56:32 +0000

Dear Incorrect,

I think you have misread the purpose of that model: it deliberately abstracts from central banks to model a pure credit economy. It was not a case of “missing” the mixed nature but abstracting from it to solve an issue in the literature on pure credit economies, where the academic consensus within the Circuit School has been that firms could not borrow money and make a profit.

I of course agree re the irrelevance of the money multiplier argument in the Australian context.