Steve Keen: Why 2012 is Shaping Up to be a Particularly Ugly Year

At the high level, our global economic plight is quite simple to understand says noted Australian deflationist Steve Keen.

Banks began lending money at a faster rate than the global economy grew, and we're now at the turning point where we simply have run out of new borrowers for the ever-growing debt the system has become addicted to.

Once borrowers start eschewing rather than seeking debt, asset prices begin to fall -- which in turn makes these same people want to liquidate their holdings, which puts further downward pressure on asset prices:

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[pretorious700]

When whole economies are based on exponential debt growth, how can you DISMISS debt in your econometrics??? That's insane.

[MrGchiasson]

Absolutely right!!  The major-central banks made profits right up until everything went bust around 2008...Then we, the tax payers got stuck with the bill. America went 'loan-debt-crazy.. now we are facing a monster crash...

We've been betrayed, robbed, scammed and we were asleep through most of it.

We made the mistake of trusting Washington & the Fed. Rsrv. Banks....

Maybe one day we'll learn the lesson....

[wotcherfaz]

42:00 Amazing idea for solving debt crisis - without penalising the savers ! A debt jubilee in the form of QE for the public. Give everyone 100K on condition that it MUST be used to pay off any outstanding debt. So you DO benefit if you have been prudent, you KEEP THE CASH. :-)

[istraight1]

Peter Schiff, you are an ignorant fuck & right-wing demagogue.

[macpduff]

Where is the rest of the interview?

[cyborganic99]

That is Impossible. How can I be "Brilliant" and not so brilliant at the same time? You're confusing me.

[pretorious700]

Schiff's brilliant, you, on the other hand, not so much.

[cyrusp100]

I think you missed the point of what Professor Keen was saying.

He's not talking about central banks. When he talks about creating money he is referring to commercial banks.

Banks create money by creating debt. And they've been doing that before central banks even existed.

Look up his lectures on "endogenous money".

[cyborganic99]

Yes. I (Peter Schiff) tend to trigger those a lot.

[pretorious700]

simpleton alert

[Peter Miller]

his first few minutes sound to me like a description of the austrian business cycle. would people agree?

[cyborganic99]

I think a hydrogen powered ipad is a good idea.