Macro Analytics - Professor Steve Keen Talks Financial Repression

By: Gordon Long | Tue, Jan 20, 2015
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Steve Keen

Special Guest: Steve Keen is an Australian economist and author. He was formerly an associate professor of economics at University of Western Sydney. Currently, he is a Fellow at the Centre for Policy Development, and Professor and Head of the School of Economics, History and Politics at Kingston University in London.


The Art of Getting an Education in Economics

Professor Steve Keen has found that top flight universities are dominated by very narrow, doctrinaire teaching. This stylized view has resulted in critics of this view only getting jobs in low ranking university. With pride Steve Keen puts his latest university in that camp. "If you want a good education in Economics, you don't go to a good university. The wider range of thought and diverse analytics is found at the lower ranking university. Kingston University is one of those classic university!"


Financial Repression

He does not consider himself an Austrian Economist though he sees it has a number of key tenets that 85% of the economist aren't aware.

He sees Financial Repression as more about the size of the debt burden within an economy which drives the behavior of central banks. It is about the excess weight of private debt crushing the economy. Everything else is a result of this."

The results include the "badly thought out Quantitative Easing response to a crisis which they caused by effectively ignoring the growth in private sector debt, but aren't even aware that this is the cause of the crisis." "Very few banks have any real clue of what they are doing. If you doubt this, all you have to do is read the minutes of the Federal Reserve. They wouldn't dare make them up because it makes them look like a bunch of fools who have no idea what is happening."

Obviously this sort of view does not make Professor Keen popular with the establishment, seeking prestigious and lucrative government and teaching positions.


QE Is Not Money Printing!

Irving Fishers explanation of where the Great Depression evolved from was the level and growth of private debt along with too low a rate of inflation. Prof Keen is of this school in which reducing this debt will only result in further falling economic growth. Former Fed Chairman and expert on the Great Depression did not believe this. Professor Keen considers Bernanke's argument against this a "load of waffle!". "It is completely naive to the role of banks in the economy!"

Professor lays out why he was able to warn of the coming 2008 Financial Crisis an why he does not feel the current "revival' can last anymore than 5 years before the same sort of thing occurs.


Modern Debt Jubilee

This interview is worth listening to simply for Professor Keens concept of Modern Debt Jubilee and the Syrian history of successfully doing this every 49 years. You may not agree with his view but it an interesting history lesson of how this worked prior to the advent of central banking.

Many may also agree with his views and the discussion on why the Euro was always a mistake as will be Draghi's expected upcoming QE announcment. Few will likely also disagree with Professor Keen that moden central banking do not properly understand the role of banks, money, debt and capitalism.

Steve's closing advise: "Don't trust the economists!!"


Video: Financial Repression Authority with Steve Keen


Length: 30 Minutes

 


 

Gordon Long

Author: Gordon Long

Gordon T. Long
Publisher - LONGWave

Gordon T. Long

Gordon T. Long has been publically offering his financial and economic writing since 2010, following a career internationally in technology, senior management & investment finance. He brings a unique perspective to macroeconomic analysis because of his broad background, which is not typically found or available to the public.

Mr. Long was a senior group executive with IBM and Motorola for over 20 years. Earlier in his career he was involved in Sales, Marketing & Service of computing and network communications solutions across an extensive array of industries. He subsequently held senior positions, which included: VP & General Manager, Four Phase (Canada); Vice President Operations, Motorola (MISL - Canada); Vice President Engineering & Officer, Motorola (Codex - USA).

After a career with Fortune 500 corporations, he became a senior officer of Cambex, a highly successful high tech start-up and public company (Nasdaq: CBEX), where he spearheaded global expansion as Executive VP & General Manager.

In 1995, he founded the LCM Groupe in Paris, France to specialize in the rapidly emerging Internet Venture Capital and Private Equity industry. A focus in the technology research field of Chaos Theory and Mandelbrot Generators lead in the early 2000's to the development of advanced Technical Analysis and Market Analytics platforms. The LCM Groupe is a recognized source for the most advanced technical analysis techniques employed in market trading pattern recognition.

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Gordon T. Long is a graduate Engineer, University of Waterloo (Canada) in Thermodynamics-Fluid Mechanics (Aerodynamics). On graduation from an intensive 5 year specialized Co-operative Engineering program he pursued graduate business studies at the prestigious Ivy Business School, University of Western Ontario (Canada) on a Northern & Central Gas Corporation Scholarship. He was subsequently selected to attend advanced one year training with the IBM Corporation in New York prior to starting his career with IBM.

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