It’s Debt, Debt, Debt for Australia!

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Last weekend’s Sun­day Tele­graph pointed out a new record for Aus­tralia: our ratio of house­hold debt to GDP is now higher than the USA’s. I’ve writ­ten the fol­low­ing com­men­tary on this dubi­ous “gold medal” (or is it really lead?) for the ABC’s The Drum.

In all the self-congratulations over how Aus­tralia has man­aged to side­step the GFC, an incon­ve­nient truth has been over­looked: the cri­sis was caused by too much debt, and Aus­tralian house­holds have had a stronger and longer love affair with debt than even the Americans.

Interview on

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I was recently inter­viewed by Eric Tave­nier for the web­site, which is an engi­neer recruit­ment and job search ser­vice in the USA.

Eric was taken with my advo­cacy of what I called “Engi­neer Cap­i­tal­ists” (in con­trast to the finan­cial spivs who dom­i­nate busi­ness today in the USA) in my inter­view on The Keiser Report, and wanted me to elab­o­rate for his audi­ence. The inter­views have been posted to YouTube (see below).

For Aus­tralian view­ers, there was an inter­est­ing report in today’s Sun­day Tele­graph on the level of mort­gage debt in Aus­tralia, which now exceeds 100% of our GDP–higher than Amer­ica at 95.5%.

Mish on the Fictional Reserve System

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Mike Shed­lock (“Mish” as he is known to all) has writ­ten an excel­lent piece on the deflation-inflation debate, focus­ing on the Achilles Heel of the latter–the fact that it is based on the belief that we live in a “frac­tional reserve bank­ing” mon­e­tary sys­tem. He offered to let me cross-post here, and I’ve repro­duced it in its entirety below (there’s only one point I’m not sure on–the com­ment that there are no reserve require­ments for sav­ings accounts. From my read­ing of the foot­notes to Table 12 in this Fed­eral Reserve paper, that’s true of cor­po­rate accounts but not indi­vid­ual ones).

Max Keiser Interviews

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Max Keiser inter­viewed me for his 4th Keiser Report when I was in Paris ear­lier in Decem­ber. I come in at about the 13 minute mark after Max’s ban­ter with Stacy:

It was a great interview–Max had about ten ques­tions pre­pared, but only asked about 3 of them because the con­ver­sa­tion flowed so well.

We also recorded a pro­gram on what 2010 may bring for mar­kets and economies for BBC Radio 5 Live Break­fast; the pro­gram will go to air on New Year’s Eve at 10PM Lon­don time.

Circuit Theory and the state of Post Keynesian Economics

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I gave the fol­low­ing pre­sen­ta­tion at the 4th Dijon Money con­fer­ence (Decem­ber 10–12 2009):

Steve Keen’s Debt­watch Pod­cast 

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Mish on Tech Ticker

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Mike (“Mish”) Shedlock’s site MISH’S Global Eco­nomic Trend Analy­sis pro­vides reg­u­lar, inci­sive and down to earth com­men­tary on the US and global economies, and his site is one of my first ports of call when I want do take a more crit­i­cal look at any US data that appears to be more dis­sem­bling than informing.

Mish has made a rare appear­ance on Yahoo’s Tech Ticker–another reg­u­lar favourite of mine–to pull apart the most recent appar­ently pos­i­tive devel­op­ments in the US uem­ploy­ment rate.

If you haven’t yet acquainted your­self with Mish, then I sug­gest you watch this video (also embed­ded below) with Aaron Task from Tech Ticker, and then check out Mish’s blog.

Debtwatch No 41, December 2009: 4 Years of Calling the GFC

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I first realised that the world faced a seri­ous finan­cial cri­sis in the very near future in Decem­ber 2005, as I pre­pared an Expert Wit­ness Report for the NSW Legal Aid Com­mis­sion on the sub­ject of preda­tory lending.

My brief was to talk about the impact of such con­tracts on third par­ties, since one ground to over­turn a loan con­tract was that it had dele­te­ri­ous impacts on peo­ple who were not sig­na­to­ries to the con­tract itself. I was approached because the solic­i­tor in the case had heard of my aca­d­e­mic work on Hyman Minsky’s “Finan­cial Insta­bil­ity Hypothesis”.

Helsinki Economics and Politics Seminar

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The Depart­ments of Polit­i­cal Sci­ence and of Eco­nom­ics at the Uni­ver­sity of Helsinki recently held a sem­i­nar enti­tled “Eco­nom­ics: Chal­lenges for Polit­i­cal, Philo­soph­i­cal and His­tor­i­cal Research”. The moti­va­tion was a reor­gan­i­sa­tion of the Uni­ver­sity that will com­bine these two Depart­ments. The flyer for the sem­i­nar adver­tised it in the fol­low­ing manner:

This sem­i­nar, orga­nized jointly by the Depart­ment of Polit­i­cal Sci­ence, Depart­ment of Eco­nom­ics and Cen­tre of Excel­lence on Global Gov­er­nance Research, will start with reflec­tions on the role of eco­nom­ics and eco­nomic studies.

  • Can we com­bine eco­nom­ics and pol­i­tics through polit­i­cal economy?
  • Have polit­i­cal and eco­nomic stud­ies neglected history?

Michael Hudson Talk & Green New Deal Discussion

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Michael Hud­son was a recent and wel­come vis­i­tor to Aus­tralia, and I helped arrange a talk by him at Cus­toms House that many peo­ple on this blog sup­ported finan­cially, and quite a few attended. My own attempt to record the speech was unsuccessful–the sound qual­ity was just too low–but another record­ing of  the event (by Sean Reynolds from Pol­i­tics in the Pub) was more suc­cess­ful than mine. Here it is below. My apolo­gies for tak­ing so long to post it, but I’ve been even busier than usual recently and I sim­ply didn’t have the time to do so until now.