Steve Keen ***

[flintlock]

Re: Steve Keen ***

So if I understand this correctly, Keen says we are not having deflation this time around because of global warming, peak oil, and the rise of China? Understood. These are restraints on unlimited growth. But around 18:45 Keen mentions people who expect high inflation as not understanding how money is created. I am one of those. Can anyone point me to a quick description of why this is the case? Why is creating money out of thin air not inflationary?

[c1ue]

Re: Steve Keen ***

So if I understand this correctly, Keen says we are not having deflation this time around because of global warming, peak oil, and the rise of China? Understood. These are restraints on unlimited growth. But around 18:45 Keen mentions people who expect high inflation as not understanding how money is created. I am one of those. Can anyone point me to a quick description of why this is the case? Why is creating money out of thin air not inflationary?

The part which Keen doesn't understand well is the political portion of economic management.

Specifically that any government can at will create inflation (or cancel out deflation).

This is similar to EJ's past views which I think were predicated on the assumption that politicians really had the collective good in mind, even if mistakes were made.

However, my view all along - and it appears EJ's view now as well - is that the assumption of positive intent is wrong. Selfishness and short-sightedness are the norm.

In this light, it is unrealistic to think that all the purported anti-inflation measures which can be undertaken, will be undertaken.

[Munger]

Re: Steve Keen ***

Yer, wrong then wrong now

Except for the fact, of course, that he has been 100% correct so far ...

[jiimbergin]

Re: Steve Keen ***

Except for the fact, of course, that he has been 100% correct so far ...

how has he been right. He was in the deflation camp in 2008 and 2009.

[Munger]

Re: Steve Keen ***

how has he been right. He was in the deflation camp in 2008 and 2009.

I don't know what his positions were. I was responding to the assertion that his position several years ago is the same as his position now, which was represented as: "So he sees deflation or low inflation ahead, hmmm..."

If he predicted deflation or low inflation back in 2007 or whenever, I'd say he was pretty spot on. Wages have been falling, prices have been stable (except for energy and food, which have been highly volatile, as usual, and are crashing again...). He was certainly more correct than the chicken little's who were screaming "inflation!"

[sunskyfan]

Re: Steve Keen ***

I'll give it a shot ... if money is created simply to vanquish debt then it is not really part of the organic economy and available to be used as currency for exchange of goods and services. All the money currently being created now is directly mapped to entities (large banks and investment firms) who have large debts to service or through the government which has large debts to service. In this line of thinking if you want to get inflation really going it is best to put it into wages but that is not happening.

[jiimbergin]

Re: Steve Keen ***

I don't know what his positions were. I was responding to the assertion that his position several years ago is the same as his position now, which was represented as: "So he sees deflation or low inflation ahead, hmmm..."

If he predicted deflation or low inflation back in 2007 or whenever, I'd say he was pretty spot on. Wages have been falling, prices have been stable (except for energy and food, which have been highly volatile, as usual, and are crashing again...). He was certainly more correct than the chicken little's who were screaming "inflation!"

As far as I remember he was solidly in the deflation camp much like MISH (who I still read anyway)

[c1ue]

Re: Steve Keen ***

I don't know what his positions were. I was responding to the assertion that his position several years ago is the same as his position now, which was represented as: "So he sees deflation or low inflation ahead, hmmm..."

If he predicted deflation or low inflation back in 2007 or whenever, I'd say he was pretty spot on. Wages have been falling, prices have been stable (except for energy and food, which have been highly volatile, as usual, and are crashing again...). He was certainly more correct than the chicken little's who were screaming "inflation!"

This is disingenuous, inflation has been occurring, just not hyper-inflation.

And Keen was saying hyper-deflation, which was wrong, as was the imminent implosion of the AU property bubble.

Neither has happened.

[flintlock]

Re: Steve Keen ***

Selfishness and short-sightedness are the norm.

Well I certainly agree with that. Not something unique to our times, but perhaps just fewer now willing to call them out on it. I'm afraid our government merely mirrors the populace in this regard.