Google–lower band­width ver­sion

Flattr this!

A num­ber of read­ers have com­plained that the video of my talk at Google took up too much band­width, result­ing in “jerky” vision. Here are the same two files in a some­what lower qual­ity compression–half the size of the orig­i­nal files.

Steve Keen’s Debt­watch Pod­cast 

| Open Player in New Win­dow

Steve Keen’s Debt­watch Pod­cast 

| Open Player in New Win­dow

As one viewer noted, it is also fea­si­ble to down­load the files to your PC and view there with­out band­width prob­lems dur­ing play­back.

Bookmark the permalink.
  • Up And Away

    Oh Ohhh

    Last week West­pac cut its loan-to-value ratio (LVR) for new cus­tomers to just 87 per cent of the property’s value — a new low for a big bank.

  • Gav

    OK, Lyon­wiss, how do YOU decide how much a piece of land is “really” worth?

  • Eter­nal Stu­dent

    That was an enjoy­able talk, btw.

    I don’t know if peo­ple have seen this updated ver­sion of the Credit Suisse Reset wave, but I found this per­ti­nent and inter­est­ing:

    I don’t know how accu­rate these folks are. But if it is, it’s tempt­ing to issue a doom-and-gloom warn­ing for 12/12/2012. Or per­haps 12/21/2012 if you believe the Mayans. 🙂 I’m being some­what whim­si­cal about those dates, but not the year.

  • simonp

    Many thanks for the videos Steve, I’ve been a some­time lurker.
    I tried both ver­sions of the video on a fast con­nec­tion and was plagued with the buffer­ing prob­lem too, I got round it by press­ing pause now and again. I use VLC player it is a great streamer might be worth just post­ing a link to the stream.

    With regards to your video con­tent, I see a big fight devel­op­ing between dif­fer­ent fac­tions in the US, you see many blog sites with videos stat­ing why they hate Obama , blam­ing him for every­thing, so I tend to think that some­thing bad will hap­pen there are there are too many peo­ple seek­ing the power and they have guns and Black­wa­ter too.

  • Lyon­wiss


    I have no idea how much a piece of land is “really” worth. It depends on many vari­ables: loca­tion, eco­nomic envi­ron­ment, per­sonal cir­cum­stances etc., which fluc­tu­ate over time. My deci­sions to buy prop­er­ties have never been based on ratio­nal eco­nomic val­u­a­tion of land, which is vir­tu­ally impos­si­ble to do for most peo­ple. Nor were the deci­sions based on spec­u­la­tion on cap­i­tal gains. The first rea­son was hav­ing some­where sta­ble to live and the sec­ond rea­son was effec­tive sav­ing.

    My main assump­tion was that prop­er­ties are real assets and there­fore they should main­tain their real val­ues over the long-term. For this rea­son, it is an effec­tive long-term sav­ings vehi­cle. When I bought my last prop­erty in the mid-80s, infla­tion was just under 10%, cash rate and mort­gage rate were more than 15% and my mar­ginal per­sonal income tax rate was nearly 50%. Invest­ment returns on per­sonal sav­ings would have to be 30% p.a. to beat sav­ing through my own res­i­den­tial prop­erty, with­out assum­ing cap­i­tal gains (above infla­tion).

    The pop­u­lar­ity of res­i­den­tial prop­er­ties as sav­ing vehi­cles is sub­stan­tially dri­ven by per­sonal tax con­sid­er­a­tions within a volatil­ity eco­nomic envi­ron­ment. This may have caused the observed cap­i­tal gains, which in turn have attracted invest­ment prop­erty spec­u­la­tors, for whom cap­i­tal gains are essen­tial (with neg­a­tive gear­ing etc.), but not for owner-occu­pier like me. Prop­erty spec­u­la­tors will come and go as bub­bles inflate and deflate, with land prices doing sim­i­lar gyra­tions. How much a piece of land is “really” worth? Thank good­ness I didn’t have to answer the ques­tion, before I made my deci­sions.

  • hay­den

    On the first video @ 47min:40sec a guy asks the ques­tion about inter­est rates being 18% and that the Mort­gage to GDP debt would have been greater etc. He does not under­stand, yes rates were 18%, but the homes/land peo­ple were buy­ing were a 1/4 of the price they are now and 18% mort­gage was only 25% of the aver­age wage on repay­ments.

  • Brian Macker

    Pro­fes­sor Keen,

    I’ve read your Rov­ing Cav­a­liers of Credit and lis­tened to some of your videos here. I think you mis­un­der­stand Aus­trian eco­nom­ics.

    You state: ”
    We are there­fore not in a “frac­tional reserve bank­ing sys­tem”, but in a credit-money one, where the dynam­ics of money and debt are vastly dif­fer­ent to those assumed by Bernanke and neo­clas­si­cal eco­nom­ics in general.[10]

    [10]And, for that mat­ter, by Aus­trian eco­nom­ics, whose analy­sis of money is sur­pris­ingly sim­plis­tic. Though Aus­tri­ans advo­cate a pri­vate money sys­tem in which banks would issue their own cur­rency, they assume that under the cur­rent money sys­tem, all money is gen­er­ated by frac­tional reserve lend­ing on top of fiat money cre­ation. This is strange, since if they advo­cate a pri­vate money sys­tem, they need a model of how banks could cre­ate money with­out frac­tional reserve lend­ing. But they don’t have one.”

    First off there is noth­ing incom­pat­i­ble between the Aus­trian mon­e­tary model and a sys­tem where the banks expand credit first and the gov­ern­ment back fills with fiat credit. In fact Mises said as much when he com­plained the cen­tral banks allow the pri­vate bank­ing sys­tem to increase lend­ing beyond what is pos­si­ble with­out it. In fact I don’t see the Aus­trian model being what you’ve claimed. Of course, banks cre­ate the increase in the money sup­ply and then in a fiat sys­tem the cen­tral bank fills in behind. That’s still a frac­tional reserve mon­e­tary sys­tem, and is quite com­pat­i­ble with the tem­po­ral order of money expan­sion, banks first, fiat later.

    At this point I don’t see your point about over­all debt lev­els or why that would be incom­pat­i­ble with the Aus­trian model. Seems per­fectly com­pat­i­ble with their model to me. Nor do I under­stand why you think the Aus­trian analy­sis of money is so sim­plis­tic. Your short arti­cle cer­tainly didn’t cap­ture it, yet you make it sound even sim­pler than what you described.

    It’s almost as if you haven’t read and under­stood the Aus­trian eco­nom­ics. Either that or I’m miss­ing some­thing myself.

    Why in the video have you claimed that only one econ­o­mist has pre­dicted this mess when in fact the Aus­tri­ans have been howl­ing about the stu­pid­ity of past and cur­rent actions for a long time, and it fact their model pre­dicts what’s hap­pened?

  • Hi Brian (RE #32 on Google band­width),

    Rather apro­pos of the dis­cus­sion that’s been rag­ing here recently between Char­tal­ists and Cir­cuitists, I freely admit that I am bet­ter informed of the weak­nesses of neo­clas­si­cal than Aus­trian economics–I have cer­tainly not read Aus­trian eco­nom­ics as deeply as I have read neo­clas­si­cal.

    I also agree that many Aus­tri­ans pre­dicted this cri­sis, and I didn’t claim to be the only econ­o­mist who pre­dicted it–just “one of”. The paper from which that list is compiled–which was not put together by me but by Pro­fes­sor Dirk Beze­mer in the Nether­lands who was unknown to me prior to his paper being published–notes Peter Schiff as well as myself and another 10 econ­o­mists.

    There are fun­da­men­tal aspects of Aus­trian economics–its the­ory of value, and its the­ory of capital–which I reject, for the same rea­sons that I reject the related if some­what dif­fer­ent the­o­ries within neo­clas­si­cal eco­nom­ics. But at the same time I see strengths, ver­sus only weak­nesses in neo­clas­si­cal the­ory.

    I don’t have time to dwell on those now–in the same sense as my recent com­ments on Char­tal­ism vs Cir­cuit the­ory, the main game for me is always the neo­clas­si­cal case. But I can’t help being asked ques­tions about Aus­trian eco­nom­ics in pub­lic, and I have to give some answer–and that creeps into my online papers as you note.

  • Brian Macker

    Pro­fes­sor Keen,

    Thank you for your response. 

    I heard in one of your videos that you have writ­ten crit­i­cisms of Aus­trian eco­nom­ics, so I will read those from your book, and will look for the online stuff you sug­gested.

    I mis­re­mem­bered the claim I was object­ing to regard­ing pre­dic­tions (and you are cor­rect you men­tioned Aus­tri­ans). It’s at the 9:00 mark in the first video, where you claim “Econ­o­mists don’t con­sider credit at all in the way they model the econ­omy…” This how­ever is not true since Aus­tri­ans do.

    Also to counter your foot­note [10] above where you write, “And, for that mat­ter, by Aus­trian eco­nom­ics, whose analy­sis of money is sur­pris­ingly sim­plis­tic.” take a look at the chap­ter on “The Elas­tic­ity of the Rec­i­p­ro­cal Can­cel­la­tion” from Mises’ the The­ory of Money and Credit writ­ten in 1912. 

    As you can see he cov­ers the issue of your sim­ple cav­a­lier of credit model when he writes: “If, instead of pay­ment in money, claims on third per­sons are trans­ferred which are can­celed by the trans­feree and the debtor by means of claims held by the lat­ter against the for­mer, the sphere of the off­set­ting process can be extended.” The entire chap­ter cov­ers the topic.

    I’m talk­ing about the sim­ple model as in this pic­ture:

    Did you ever won­der when look­ing at that pic­ture what estab­lishes the price level? If we take the pic­ture lit­er­ally there is noth­ing to estab­lish price lev­els. I mean how many of bank note X’s is a pig worth for the very first such trans­ac­tion? Since the money cre­ated by this method (assum­ing no com­mod­ity money and no pos­si­ble char­tal­ism the ques­tion arises as to what estab­lishes price lev­els. If it is exist­ing price lev­els then the sys­tem is prone to ran­dom walks shift­ing price lev­els all over the place.
    My une­d­u­cated opin­ion (based on a quick read) at this point is that your mod­els are a in fact mod­el­ing a sub­set of Aus­trian the­ory. Any dif­fer­ences (and extra com­plex­i­ties of Aus­trian the­ory) are ignored by your mod­els.

    You can’t solve the issue by say­ing “one pig unit” because then you are truly deal­ing in a com­mod­ity money. 

    Aus­trian the­ory leads to credit crunches even with­out fiat money and cen­tral banks. Those only aggra­vate the prob­lem by allow­ing the frac­tional reserve mon­e­tary infla­tions to go on for longer peri­ods (credit expan­sions in your lingo). There are other aggra­vat­ing fac­tors like FDIC insur­ance, GSEs, etc. The third party money cre­ation issue is inher­ent in frac­tional reserve bank­ing based on a com­mod­ity money. 

    Note that call­ing a com­mod­ity money sys­tem a barter sys­tem is wrong.

    I wish Aus­tri­ans would cre­ate math/computer sim­u­la­tions of their eco­nomic mod­els like you do. Can’t blame Mises writ­ing in 1912 but mod­ern Aus­tri­ans are behind the curve.
    I think what you are doing is very valu­able.

    I am puz­zled by your claim that debt dwarf­ing money sup­ply being some kind of fal­si­fi­ca­tion of frac­tional reserve mod­els. Frac­tional reserve mod­els can sup­port an infi­nite amount of debt, it’s just a mat­ter of keep­ing low actual reserves. With the GSEs act­ing like banks and hav­ing lever­age amounts of 50x or more the debt can eas­ily reach 50x. I will read more of your writ­ings to see if I can get a bet­ter take on what you are claim­ing. So don’t bother respond­ing.