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Bernard Hickey talks to Professor Steve Keen about asset prices, debt, and a 'modern debt jubilee'
Earlier last month, Bernard Hickey spoke to Professor Steve Keen, an economics professor at the University of Western Sydney about his unconventional economic ideas.
Professor Keen runs the 'Debtwatch' blog, and the website www.debunkingeconomics.com. He is a follower of Hyman Minsky, has built is own substantial following, and claims to have predicted the 2008 GFC. Like Minsky, he argues against the accumulation of debt. He is a speaker in high demand.
Bernard started by asking Professor Keen about why debt matters, and what moves asset prices.
Professor Keen has the view that banks make profits by creating debt, and while there are some good outcomes from this when the borrowing results in expanding the productive base, most of the recent debt expansion has been for 'unproductive' housing and has resulted in rising prices and rising housing debt levels.
He is calling for a "modern debt jubilee" - QE for the public - where both savers and borrowers share in the debt forgiveness, and the banking business is radically restructured.