By David Law­son

Click here for this data in Excel: Debt­watch; CfE­SI

An issue that is often over looked here in Aus­tralia is the ris­ing cost of edu­ca­tion. Uni­ver­si­ty stu­dents are lib­er­at­ed from the up-front cost of edu­ca­tion through the Aus­tralian Gov­ern­ments High­er Edu­ca­tion Loan Pro­gram (HELP). While in oth­er coun­tries like the Unit­ed States the stu­dent loans mar­ket is pri­va­tised, which has con­tributed to their high­ly priced ter­tiary edu­ca­tion sys­tem. Though, after look­ing over the num­bers here in Aus­tralia it seems that the pub­lic cred­it fund­ing through HELP could be hav­ing the same infla­tion­ary effect on edu­ca­tion.

Below is Steve’s recent inter­view on Cap­i­tal Account with Lau­ren Lyster that talks about the Debt Black Hole that economies around the world have unknow­ing­ly been sucked into. Steve dis­cuss­es the fun­da­men­tals of his unique analy­sis on using ris­ing debt lev­els to finance eco­nom­ic growth. A fan­tas­tic renewed per­spec­tive on the cur­rent finan­cial cri­sis!

Chi­nese con­struc­tion keeps trend­ing down with Sany the worlds sixth largest heavy machin­ery mak­er report­ing a rise in prof­it of 5.4% in the same quar­ter as a blow out in receiv­ables of USD $1.39  bil­lion  and cash reserves falling by USD $535 mil­lion  . Sany is clear­ly book­ing prof­its on 100% financed machin­ery while pro­vid­ing zero trans­paren­cy on cred­it risk  and delin­quen­cy . If the GFC has taught the world any­thing. then 100% ‘no mon­ey down” ven­dor finance should ring alarm bells. This all start­ed about about 3 months ago when Zoom­lion start­ed to aggres­sive­ly financ­ing heavy machin­ery for any­one that want­ed to sign up

Click here for this data in Excel: Debt­watch; CfE­SI
Click here for this post in PDF: Debt­watch; CfE­SI

Steve Keen, Uni­ver­si­ty of West­ern Syd­ney
Matheus Gras­sel­li, Fields Insti­tute, Toron­to

“It ain’t what you don’t know that gets you into trou­ble. It’s what you know for sure that just ain’t so.” (Mark Twain)

Introduction

That the Euro has fall­en into cri­sis a mere decade after its intro­duc­tion is hard­ly sur­pris­ing. The intrin­sic prob­lems in its design were evi­dent to econ­o­mists as wide­ly sep­a­rat­ed intel­lec­tu­al­ly as Wynne God­ley and Mil­ton Fried­man. Writ­ing in 1992, God­ley observed that

The Fall of the Com­mu­nist Dynasty and The Loot­ing of Chi­na touched on the wide­spread fraud that has become appar­ent, both in main­land and US list­ed Chi­nese com­pa­nies. I also showed that an extra­or­di­nary num­ber of the Com­mu­nist Par­ty and the mil­i­tary cadre  had mas­sive unex­plained wealth, with the Top 70 record­ing a net col­lec­tive worth of over $80 bil­lion. This week Bloomberg  was banned by the Chi­nese gov­ern­ment for report­ing the incom­ing pres­i­dents fam­i­lies assets at over $367M.

As Xi climbed the Com­mu­nist Par­ty ranks, his extend­ed fam­i­ly expand­ed their busi­ness inter­ests to include min­er­als, real estate and mobile-phone equip­ment, accord­ing to pub­lic doc­u­ments com­piled by Bloomberg.

Earth­shar­ing Aus­tralia, in col­lab­o­ra­tion with Pros­per Aus­tralia and the Land Val­ue Research Group (LVRG), has put togeth­er the Spec­u­la­tive Vacan­cies in Mel­bourne: 2012 Report, authored by Philip Soos. The report is for­mu­lat­ed from water usage data pro­vid­ed by City West Water and Yarra Val­ley Water to esti­mate prop­er­ty vacan­cies in the Mel­bourne area.

Earth­shar­ing Aus­tralia has been pro­duc­ing the Spec­u­la­tive Vacan­cies report annu­al­ly since 2008. The report clas­si­fies a vacant prop­er­ty as real estate show­ing water con­sump­tion less 50 litres per day (50L/d) aver­aged over the six months peri­od, July-Decem­ber 2011.

I can scarce­ly believe what Brad Delong has dared to pub­lish on Project Syn­di­cate today:

We econ­o­mists who are steeped in eco­nom­ic and finan­cial his­to­ry – and aware of the his­to­ry of eco­nom­ic thought con­cern­ing finan­cial crises and their effects – have rea­son to be proud of our analy­ses over the past five years. We under­stood where we were head­ing, because we knew where we had been.

In par­tic­u­lar, we under­stood that the rapid run-up of house prices, cou­pled with the exten­sion of lever­age, posed macro­eco­nom­ic dan­gers. We rec­og­nized that large bub­ble-dri­ven loss­es in assets held by lever­aged finan­cial insti­tu­tions would cause a pan­icked flight to safe­ty, and that pre­vent­ing a deep depres­sion required active offi­cial inter­ven­tion as a lender of last resort.…

Below is the talk I gave to the Cana­di­an Cen­tre for Pol­i­cy Alter­na­tives on the Debt Bub­ble and its impli­ca­tions for Cana­da. I cov­er my Min­skian analy­sis of the Depres­sion in gen­er­al, and con­clude with data on the Cana­di­an econ­o­my. The mort­gage accel­er­a­tion data in par­tic­u­lar implies that the Cana­di­an house price bubble–which is not as big as those in Aus­tralia, the USA or the UK–is close to being over.

This is the screen record­ing of the talk–better for read­ing the slides them­selves.

I’ll edit the post tomor­rrow to add links to the Pow­er­point slides and an audio recording–I can’t access the servers right now to upload them.

Max Keis­er, recent­ly crowned the most dan­ger­ous per­son in the finan­cial media, inter­viewed me for Episode 307 of the Kaiser Report.

Next Fri­day at 4.30PM, I’ll be live in the Wash­ing­ton stu­dio with two oth­ers who should be on that list, Lau­ren Lyster and Demetri Kofi­nas of The Cap­i­tal Account.