A Min­sky Sin­gu­lar­ity

Flattr this!

Below is Steve’s recent inter­view on Cap­i­tal Account with Lau­ren Lyster that talks about the Debt Black Hole that economies around the world have unknow­ingly been sucked into. Steve dis­cusses the fun­da­men­tals of his unique analy­sis on using ris­ing debt lev­els to finance eco­nomic growth. A fan­tas­tic renewed per­spec­tive on the cur­rent finan­cial cri­sis!

About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.
Bookmark the permalink.
  • RJ

    Cor­rect. VG men­tal tool. Ratio­nal mind­set?

    Really? This is not the place for con­sid­er­ing these issues but some­how I think you have missed the point. IMHO and I may be wrong of course.

  • RJ

    How­ever could not the gov­ern­ment or the cen­tral bank use mon­e­tary and/or fis­cal pol­icy to increase AD and make up for the short­fall due to net debt repay­ments ? They could for exam­ple finance tax cuts by money print­ing or sub­si­dize final sales again via money print­ing.”

    Agree.

    By money print­ing I assume you mean deficit increases financed by Govt bonds.

  • Rob Rawl­ings

    RJ

    By money print­ing I mean the trea­sury issu­ing bonds bought by the fed with newly cre­ated elec­tronic money that the govt then uses to fund a deficit.

  • Steve Hum­mel

    .……I may be wrong of course.”

    That’s an improve­ment in atti­tude, and a cor­rect obser­va­tion of course.

    Ratio­nal mind­set?”

    No. For the exhaus­tion of the RATIONALISTIC mind­set. Its an impor­tant dif­fer­ence.

    @Rob Rawl­ings

    They could for exam­ple finance tax cuts by money print­ing or sub­si­dize final sales again via money print­ing.”

    This is cor­rect, and the nascent recog­ni­tion of the power and effec­tive­ness of the Dis­trib­utist mon­e­tary par­a­digm as well as that of the div­i­dend and com­pen­sated retail dis­count mech­a­nisms of Social Credit which would accom­plish these same pur­poses in per­pe­tu­ity if adopted.

    The open mind­ed­ness of some posters here enables them to think these thoughts. I’ve rarely seen such on Mish Shedlock’s forum after almost 6 years of post­ing there. The power of wis­dom (cog­ni­tion) is that it has the power to alter one’s real­ity for the bet­ter “in the twin­kling of an eye.” 

    Ortho­doxy is still lay­ing around all over the place just wait­ing for actual open mind­ed­ness to dis­pel it. Get­ting com­fort­able with ambi­gu­ity is the start­ing point for cul­ti­vat­ing such a trait. Amen. So be it.

  • Steve Hum­mel

    Debt is not the only nature or the sin­gle ulti­mate real­ity of money. 

    To insist that money can only be issued by gov­ern­ment or by any­one as only “this for that” is the ulti­mate in a small­ish legal­is­tic author­i­tar­i­an­ism.

    Grace, the free gift, indi­vid­u­ally expe­ri­enced and gov­ern­men­tally insti­tuted in mon­e­tary pol­icy is not only real but com­pletely doable, and would solve our mon­e­tary prob­lems and serve a much higher pur­pose. Amen. So be it.

  • Steve Hum­mel

    Whoa to you finan­cial and mon­e­tary scribes and Phar­isees! Your fail­ure to acknowl­edge the BOTH/AND nature of real­ity and insis­tence on an ONLY type per­spec­tive con­demns Human­ity to some sad lobot­o­mized base­ment “real­ity.”

    Faith, Hope, Love and Grace exist!

  • RJ

    Rob Rawl­ings
    July 11, 2012 at 8:25 am | #

    RJ

    By money print­ing I mean the trea­sury issu­ing bonds (so far good)

    bought by the fed ??????????????? (com­mer­cial banks or non banks not the Fed) with newly cre­ated elec­tronic money (???????? what do you mean Reserves???) that the govt then uses to fund a deficit.(???? the Govt funds the deficit using ini­tially reserves and then bonds )

  • Rob Rawl­ings

    I think the trea­sury sells the bonds to pri­vate banks who then in turn sell the bonds to the fed. But in any case the details are some­what irrel­e­vant to the ques­tion I was ask­ing.

  • RJ

    Rob Rawl­ings
    July 12, 2012 at 1:03 am | #

    I think the trea­sury sells the bonds to pri­vate banks who then in turn sell the bonds to the fed. But in any case the details are some­what irrel­e­vant to the ques­tion I was ask­ing.

    They sell the bonds to banks or non banks not the Fed. To drain Fed reserves that are released when the Govt pay some­one or a com­pany etc

  • mick­eyc

    The com­ments sec­tion on here used to be inter­est­ing. Now it seems sev­eral posters are trip­ping on acid and writ­ing free form gib­ber­ish.

  • Steve Hum­mel

    Now it seems sev­eral posters are trip­ping on acid and writ­ing free form gib­ber­ish.”

    That is the stan­dard uncon­sciously sci­en­tis­tic take on things. I assure you I am not on acid, and that I am con­sid­er­ing more of ACTUAL real­ity than you are, as well as its eco­nomic and mon­e­tary rel­e­vance.

  • Steve Hum­mel

    Three excel­lent quotes by Albert Ein­stein:

    You can­not solve a prob­lem from the same con­scious­ness that cre­ated it. You must learn to see the world anew.”

    Intel­lec­tual growth should com­mence at birth and cease only at death”

    There are two ways to live: you can live as if noth­ing is a mir­a­cle; you can live as if every­thing is a mir­a­cle.”

  • Paul Nollen

    may be of inter­est

    http://www.cepr.net/documents/publications/argentina-success-2011–10.pdf
    .….……
    Argentina’s expe­ri­ence calls into ques­tion the pop­u­lar myth, as noted above, that reces­sions caused by finan­cial crises must involve a slow and painful recov­ery. Argentina’s finan­cial cri­sis and col­lapse were as severe as that of almost any coun­try in recent decades; and yet it took only one quar­ter after the default to embark on a rapid and sus­tained recov­ery. This is not only because of the deval­u­a­tion and improved macro­eco­nomic poli­cies, but because the default freed the coun­try from hav­ing to be
    con­tin­u­ally ham­strung by a crip­pling debt bur­den and by pro-cycli­cal poli­cies imposed by cred­i­tors.
    It is these types of poli­cies, along with the ultra-con­ser­vatism of cen­tral banks like the present ECB, that mostly account for the his­tor­i­cal expe­ri­ence of delayed recov­er­ies after finan­cial crises. The
    Argen­tine gov­ern­ment has shown that this bleak sce­nario is just one pos­si­ble out­come, and that a rapid recov­ery in out­put, employ­ment, poverty reduc­tion, and reduced inequal­ity is another very fea­si­ble path that can be cho­sen.
    .….….….

    Regards

    Paul