Steve Keen's Debtwatch

In a very time­ly move, the Aus­tralian Sen­ate Stand­ing Com­mit­tee on Eco­nom­ics estab­lished a hear­ing into the post-GFC bank­ing sec­tor. I was pleased to be invit­ed to make a sub­mis­sion, which I com­plet­ed just before leav­ing Aus­tralia for one mon­th’s research into mon­e­tary eco­nom­ics with math­e­mati­cians at the Fields Insti­tute in Toron­to.

The sub­mis­sions have just been made pub­lic. Mine is avail­able here in PDF, and is also repro­duced below. I have improved on my mod­el­ing of mon­ey cre­ation in the last two weeks at the Fields, but I’ll leave details of that for a lat­er post.

Here is a short insight­ful arti­cle from europe online mag­a­zine about pan­ic and uncer­tain­ty over the Greek finan­cial future. To quote the arti­cle:

Reports said approx­i­mate­ly 5 to 6 bil­lion euros had van­ished from accounts dur­ing the month of May and the sit­u­a­tion had not improved since the start of June.

We will have to wait and see what is to come after Sun­day’s elec­tion out­come…

Check out Steve’s lat­est inter­view with Chris Marten­son.

In his recent paper enti­tled A cul­ture of mania: a psy­cho­an­a­lyt­ic view of the incu­ba­tion of the 2008 cred­it cri­sis ,  Pro­fes­sor Mark Stein devel­ops a the­o­ret­i­cal frame­work around the notion of a man­ic cul­ture, com­prised of four aspects: denial; omnipo­tence; tri­umphal­ism; and over-activ­i­ty.

“A series of major rup­tures in cap­i­tal­ist economies were observed and not­ed by those in posi­tions of eco­nom­ic and polit­i­cal lead­er­ship in West­ern soci­eties,” he said. “These rup­tures caused con­sid­er­able anx­i­ety among these lead­ers, but rather than heed­ing the lessons, they respond­ed by man­ic, omnipo­tent and tri­umphant attempts to prove the supe­ri­or­i­ty of their economies.”

John Hemp­ton from Bronte Cap­i­tal expands on the theme of  sys­temic chal­lenges cur­rent­ly fac­ing the Chi­nese econ­o­my that we touched on last week with The End of the Com­mu­nist Dynasty

The Macro­eco­nom­ics of Chi­nese klep­toc­ra­cy Chi­na is a klep­toc­ra­cy of a scale nev­er seen before in human his­to­ry. This post aims to explain how  this wave of theft is financed, what makes it sus­tain­able and what will make it fail. There are sev­er­al Chi­na experts I have chat­ted with – and many of the ideas are not orig­i­nal. The syn­the­sis how­ev­er is mine. Some sources do not want to be quot­ed.

By David Law­son

Click here for excel data: Debt­watch; CfE­SI

The recent stall in Com­mon­wealth Gov­ern­ment Secu­ri­ties on issue will con­tin­ue to put pres­sure on the Reserve Bank of Aus­tralia to reduce the cash rate. As not­ed by Glenn Stevens in this weeks Media Release on the June Mon­e­tary Pol­i­cy Deci­sion:

‘Long-term inter­est rates faced by high­ly rat­ed sov­er­eigns, includ­ing Aus­tralia, have fall­en to excep­tion­al­ly low lev­els.’

10-year bond yields aver­aged a decline of 3 basis points per trad­ing day for the month of April. The spread on gov­ern­ment bond yields and the Tar­get rate con­tin­ues to widen.

“From Finan­cial Cri­sis to Stag­na­tion: The Destruc­tion of Shared Pros­per­i­ty and the Role of Eco­nom­ics” by Thomas Pal­ley, Cam­bridge Uni­ver­si­ty Press, 2012.

If you missed the inter­view live, here is the pod­cast link:

http://www.bbc.co.uk/iplayer/episode/b01j5h51/Analysis_Steve_Keen_Why_Economics_Is_Bunk/

And here is the tinyURL equiv­a­lent:

http://www.bbc.co.uk/i/b01j5h51/

Going live in 2 min­utes. Click below to lis­ten:

http://www.bbc.co.uk/radio/player/bbc_radio_fourfm