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.
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%.
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).
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.
This is too good not to spread: Senator Bunning berates Bernanke at his confirmation hearing. What Bunning lacks in oratory he more than compensates in forthrightness and integrity. One phrase alone is worth hearing: “We [should] punish failure not reward it”.
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”.
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 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.
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