Max Keiser interviews Steve Keen

Debt deflation-On the Edge with Max Keiser-07-08-2011

In this edition of On the Edge, Max Keiser interviews Steve Keen, economist and author of the book Debunking Economics.

He says that debts have spiraled out of control and the reason is shadow banking system. The program touches on the correlation between the US-EU debt crisis and the worsening Greek economy.

Michael Hudson: “Debts that can’t be paid, won’t be paid.”

Related Post:

A Modern Jubilee: How to End the Recession.

2 thoughts on “Max Keiser interviews Steve Keen

  1. Ah, I haven’t watched this for a while now but this is why I’m not happy about the prospect of nationalising a UK bank unless we adopt a deliberate policy of declaring all the off-balance sheet debts odious. I’m not sure what the repercussions would be but the last thing we want to do is lumber ourselves with infinite derivatives debts from the shadow system. It’s an aspect that just doesn’t seem to get discussed.

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    • I agree .. but it would be possible for government to default or just nationalise retail banking bit which is a necessary, important service. We need to have investment in SMEs/innovations and it is clear that the mainstream banks are only interested in dealing with more profitable loans to the big corporations. I’d like to see investment banking hived off (or abolished) and allowed to fail; at least one retail bank nationalised (preferably all and the Post Office turned into a bank as Gordon Brown proposed), and at the same time a lump sum given to every individual (as Steve Keen suggests) which would clear household debts and compensate savers for lost interest. I can’t see any contradiction in doing both. When I say nationalised, I mean ‘under democratic ownership’.

      I really cannot take debts created by CDSs as having to be honoured at all costs.. any default consequences for the economy could be addressed directly. Just think what £375 billion QE would do if put directly into ‘mainstreet’! It is indescribably appalling that the BoE is giving the banks a ‘debt jubilee’ through QE but is allowing ordinary people to lose their homes, jobs,chances of going to university… and of course privatisation of the NHS and public services.

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