Boston & New York, June 20-July 9

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I will be in Boston and New York soon, either side of the Hyman Min­sky Con­fer­ence that I’m speak­ing at at the Levy Insti­tute.

I am com­mit­ted to meet­ings on Tues­day-Wednes­day June 22–23 (and pos­si­bly Fri­day June 25), to the Levy con­fer­ence June 27–29, and there may be a sem­i­nar jointly organ­ised with Eric Jan­szen of iTulip on July 2. I will be free at other times, and open to sug­ges­tions for meet­ings or sem­i­nars. If you’d like to arrange some­thing, please con­tact me via my gmail email address (debunk­ing at gmail.com) or via a com­ment to this blog entry.

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  • Orion

    Steve, I hope you have an inter­view with Eric Jan­szen that is posted to his site where I am a sub­scriber. I think you both have very sim­i­lar views of the finan­cial cri­sis but you dif­fer on whether gov­ern­ment can induce infla­tion either because the amount is extra­or­di­nary (25 tril­lion in pri­vate debts as per your response to me on Dec 22–09)or the gov­ern­ment won’t give it to debtors but rather will give it to bankers but who won’t lend. Rather than rehash how much you both agree I think the mech­a­nism for infla­tion issue is the more impor­tant one as Eric is very infla­tion ori­ented. Maybe the com­pro­mise is the Ka Poom the­sis that Eric devel­oped with minor defla­tion fol­lowed by exces­sive infla­tion. Thank you.

  • Hi Orion,

    In fact Eric is arrang­ing a webi­nar right now. Details will be posted here and on iTulip (http://www.itulip.com/)

  • Orion

    Steve, Thank you for the response. I pulled this from an inter­view you did with him in 2009.

    EJ: You and I have dis­cussed the infla­tion case, because you know I’ve made this case for ten years now, that even­tu­ally the US will engi­neer some kind of infla­tion, for this very rea­son: all other polit­i­cal options will be exhausted. I’m an opti­mist on this because I’ve argued that this process will not nec­es­sar­ily pro­duce a tech­ni­cal hyper­in­fla­tion. But now I’m start­ing to won­der if I’m being overly opti­mistic, given the rate of change, because as you know what dri­ves a hyper-infla­tion is gov­ern­ment oblig­a­tions to make pay­roll, to fund gov­ern­ment, to fund the mil­i­tary, and to fund pensions–all the expenses which either polit­i­cally, mostly polit­i­cally, can’t be reduced eas­ily. At some point a deci­sion is made, eas­ily at a time when infla­tion rates are very low or even neg­a­tive, that we need a lit­tle infla­tion any­way, we’ll just print a lit­tle money to cover this quarter’s Fed­eral bud­get short­fall and then next quar­ter we’ll do some­thing else, we won’t do it again. That often kicks off the process of a hyper­in­fla­tion because the next quar­ter the pur­chas­ing power of tax receipts is now lower than the pre­vi­ous quar­ter, and the gov­ern­ment says, Well, we’ll print again just his one more time to meet the bud­get short­fall, which is now cause by both not enough tax rev­enue (nom­i­nal declines in tax rev­enue) and a decline in the pur­chas­ing power of tax receipts (real declines in tax rev­enue). This process is inter­nal of course, within the domes­tic econ­omy, ignor­ing exchange rate effects.

    SK: I don’t think, given the scale of the debt, that most of the gov­ern­ments are prob­a­bly going to go straight to debt repay­ment and not actu­ally cause a rise in prices. So I think you’re going to see defla­tion going on until such time as gov­ern­ments start think­ing of pos­si­bly Zim­bab­wean lev­els of money cre­ation. I frankly can’t see that hap­pen­ing, so mean­while I dif­fer on that in that I don’t think we’re going to see hyper­in­fla­tion. I think we’re going to see hyper-defla­tion. And then it’s a ques­tion of what polit­i­cal response the gov­ern­ment makes and then we’re really debat­ing which way the cock­roach runs across a wire rather than the nec­es­sary dynam­ics of the sys­tem because if the gov­ern­ment finds it can’t cause infla­tion by print­ing money off­set by new debt cre­ation, I think it’s going to learn that les­son the hard way, then there are those that decide to print absolute bucket loads of money (mon­e­tize exist­ing debt by print­ing with­out an off­set of new debt) and, alter­na­tively, those that decide to abol­ish the debt. I have a feel­ing that the polit­i­cal response in will be the lat­ter rather than the for­mer.

    I guess this is still where things stand, that it is a gov­ern­ment coin toss for infla­tion or more defla­tion once the defla­tion cri­sis becomes pro­found?

  • Only time will tell Orion, but you can watch Eric and I debate this in a webi­nar we’re plan­ning for early next month–details will be avail­able soon (and actu­ally, Eric is look­ing for a mod­er­a­tor from within the iTulip com­mu­nity…).

  • ken

    The prob­lem is that once every­one works out that their mod­els aren’t work­ing, they are just going to throw what­ever looks good at the sit­u­a­tion, which is what they are doing already, just that it will become more bizarre.

    As Ste­vie Won­der sang:

    When you believe in things
    That you don’t under­stand,
    Then you suf­fer,
    Super­sti­tion aint the way

  • ango­phera

    Steve,

    I guess this is still where things stand, that it is a gov­ern­ment coin toss for infla­tion or more defla­tion once the defla­tion cri­sis becomes pro­found?”

    The essence of the defla­tion vs infla­tion debate in one sen­tence.

  • ango­phera

    Steve,

    Eric Sprott of Sprott Asset Man­age­ment speaks highly of this analyst’s work on the bank­ing sec­tor.

    By Reg­gie Mid­dle­ton

    Aus­tralia: The Land Down Under(water in mort­gage debt
    http://boombustblog.com/reggie-middleton/2010/05/27/australia-the-land-down-underwater-in-mortgage-debt/

    Part 2 here
    Aus­tralia: The Land Down Under(water in mort­gage debt), pt. Deux: Which Banks to Short?
    http://www.zerohedge.com/article/australia-land-down-underwater-mortgage-debt-pt-deux-which-banks-short

  • glu­bilee

    I will also vouch for Reg­gie, he posts on his older research for free on http://www.zerohedge.com fre­quently and is quite right on fun­de­men­tals, but as SK knows, the pol­i­tics can bite your fun­de­men­tal analy­sis in the arse and reflate a bub­ble, so Reg­gie admit­tedly got hurt in the US mar­ket rally, espe­cially the banks. The ques­tion is can Aus­tralia do same to their banks as US did.

    Mr. Keen, can you stop in and have a moment with Obama while you are in US and tell him to fire Gei­th­ner and hire you instead…really.

    Finally, just won­der Mr. Keen, are you acquanited with Michael Hud­son and what are your thoughts his eco­nomic pol­i­tics.

  • Some­how I don’t think I’d make it past the front gate glu­bilee!

    Michael and I are good friends and are very con­so­nant on our eco­nomic pol­i­tics. He is even more of a fire­brand than I am, and I think his expres­sion “Debts that can’t be repaid, won’t be repaid” sum­marises the cri­sis nicely.

  • glu­bilee

    Don’t despair about not get­ting past the gate, I have heard Obama say he “couldn’t find an econ­o­mist that thought ____” but of course he is not lis­ten­ing to the likes of you but rather lis­ten­ing to the guys with the the­o­ries you have already debunked. I trust you and all your right­eous equa­tions will be get­ting much more, deserved, atten­tion soon, and very soon..

    Glad to know you and Mr. Hud­son are consonant…as I find his writ­ings fas­ci­nat­ing and very com­pelling, to me it is so inter­est­ing how we (the mass of us reg­u­lar folks) know so lit­tle about crit­i­cal eco­nomic truths, long known, but qui­etly hid­den away or ignored. 

    Thanks for the MH quote, like that, like that very much…

    And thanks again for your aca­d­e­mic work and demon­stra­tion with math of our incor­rect understandings…I’m just a bor­ing old civil engi­neer, but IMHO what you are doing is invalu­able as so few oth­ers are being sci­en­tific about our finan­cial sys­tems.

    Hope con­fer­ence goes well for you and all involved…it is you, not Lord Blank­fein, who is doing God’s work…

  • lk2

    There is the Dol­lar & Sense Col­lec­tive in Boston. They put out a good mag­a­zine. And in New York City there is Doug Henwood’s radio show on WBAI. An hour with him would make a good inter­view. In between, many hours from either city, is the cen­ter of het­ero­dox thought around here – Uni­ver­sity of Mass­a­chu­setts at Amherst. Per­haps many of them travel to the Min­sky con­fer­ence. I hope some debt­watch read­ers in the Boston area will get together and buy you din­ner.

  • Thanks for the reminder of Doug Hen­wood Ik2–he and I have been in touch irreg­u­larly and it would be great to meet up.

  • Notice of events where you speak that are open to the gen­eral pub­lic in NY would be very much appre­ci­ated.

    Alter­na­tive eco­nom­ics- starved in North­ern Vir­ginia.

    steve

  • Sure Steve–I’ll add your name to a list of peo­ple whom I’m cor­re­spond­ing with about events in NY.

  • poopall

    Steve, I have read your arti­cles always with inter­est. I saw some­thing on the news which was quiet inter­est­ing, and it puts things in per­spec­tive of what the lay per­son can under­stand. USA Gross Debt at June 2010 (par­don me if I havnt got the fig­ures right) equates to the US run­ning up a debt of $1.7 mil­lion USD per day since the birth of Christ, scary…,

  • Thanks poopall,

    I use a sim­i­lar met­ric to point out to my stu­dents that the rates of real wealth growth they aspire to are unsus­tain­able: if they were given $1 worth of gold at the time of JC’s birth and it grew at a mere 2% com­pound, by 2000 they would have owned a ball of gold roughly 1.3km in diam­e­ter.

    A 4% rate would give them a ball 600,000km wide; and the 6% rate some of them aspired to would result in a ball of gold mul­ti­ples of the Milky Way in diam­e­ter.

  • It’d be great to have some sort of meet­ing in Boston (or just buy you a beer).