Meet the Renegades Steve Keen 

+Matthew Burdett - Matthew, thanks for the note and support. Plenty more to come in 2016.

***** Maybe. But to assume there is some kind of evil world domination conspiracy is some jump to make. Never attribute to malice what you can more easily attribute to stupidity, right? That's not to say that a need to control by a minority elite plays a role in this.

***** yep. I believe their unrevised models will ultimately fail them. It's just a massive case of hubris.

+Hannes Radke ...... yes Hannes ...calculated hubris if there can be such a thing ... too funny isn't it .... keep commenting ..your input into the discussion is very important .. have a good day sir .....

I disagree. Never grant the "stupidity" defence to those who knew or could reasonably be expected to know that that their willful commission of white collar crimes against society on behalf of their bettors are deeply psychosociopathic. Positing some kind of global conspiracy is a strawman distraction from the actual active ongoing conspiracies of the crony-corpiratist circle-jerks with the interest-conflicted influence-peddlers acting as agents for the neofeudalist kleptocracy.

+LiberaLib Exactly, this is one of the great tragedies of social sciences, the illusion that those fields are independent. The great classic liberal economists, like Smith and Ricardo, knew that they were doing political economy (not the monstrosity of economics), and at the end they were moral thinkers.

He isn't though, because he (like all keynesians) completely ignores the non-monetary effects of his policies and the ill-effects of discretionary policy and spending.

Jj You’re arguing against things I never said, try again.

+Winston Smith Heh, yes, I've also heard it put as "Modeltheism" - in the sense that they are not just 'accepting of the theories conclsions' but put *that* into a situation of primate interpersonal politics / mammalian (ideational) territoriality you reach the point where their grouping 'Believes' these conclusions _as precept for being a part of that grouping_ (and Humans are natural "belongers" if nothing else). - making such misconceptions much harder to shift once these obvioius extra-theoretical gremlins begin to arise across 'the believers' sphere of influence. After all - Humanity is *not* a Rational species : Humanity is a _Rationalising_ species...

+Zetetik - PS: Hail!Hail! Greetings! From the rainy north of Airstrip One :) bbrrr-rr!

Basically, economists are wedded to an ideology and ideologies are inherently political, that is, they serve to rationalise the status quo. Just as theology tries to justify religion and its absurdities, so economics tries to concoct just so/natural law arguments for why things are as they are and why they cannot and should not be changed. As such economics is theory laden and not really grounded in facts - which are almost irrelevant to it - as so much with abstract theorising and creating grand narratives akin to the myth-making of organised religion.

This guy is an idiot, makes a analogy between supply and demand then interjecting a sudden new cost (ie debt) to the example. Ofcourse the answer would change you dingus.

Adam Smith Good Comment

+Evidentialist austrians have predicted the collapse of the EU. as well as the 2008 housing boom and bust.

+Alex Charalambous - Alex, We'll put that to him in the follow up. Thanks.

Thanks guys. Looking forward to your interviews.

That's the way I see it, I think there are plenty of people who realise that economics is just a big joke while studying it and then go into investment and start exploiting it. I'm in my undergrad final year and feel this way; not to be a parasite, but what's the point in trying to change the world? These issues too deeply ingrained for any person to bother trying to rectify.... I mean, jesus christ you've got people like Keen here who have dedicated their career to trying to debunk the whole subject of mainstream economics piece by piece but no one really seems to give a shit. Same state with politics (which is the other side of the same coin); together they've truly become this unstoppable colossus, which I think Keen here correctly describes as all falling under the banner of 'neoliberalism'.

I'm all for it. Get these nutcases off my beloved field. May they found the magiconomics, or something like that...

And how to prevent it next time ? That makes you wise

+Johan Hartzell - Johan, we are launching a subscription model very soon along with a new website. If you leave your email at www.renegadeinc.com then we will be in touch. Thank you for your interest and your support.

+Renegade Inc. Tx for quick reply. I will make an effort helping you out.

+Les Ashton - exactly. And many people exploit this understandable naiveté.

This is true and false. The underlying problem was defaults on mortgages; individuals accumulating too much debt. Individuals approved for a mortgage they should not have been. The underlying problem was amplified by the 'derivative casino'. The leverage just turned a match into a nuclear bomb. (Your analogy implies you have seen The Big Short; listen carefully to the synthetic CDO dinner talk.) "...not due to capitalism." This is an ambiguous statement. I would say, the financial crisis occurred because we overextended credit (subprime mortgages). This happened within a capitalist system and mainstream economists or 'experts' did not see this coming. It's hard to see an individual debt problem when you are not looking at individual debt. All the perplexities, confusion and distress in America arise, not from defects in their Constitution or Confederation, not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit and circulation. - John Adams -

+D Bruce Indeed, that was an extension of Fred Harrison's theory, and Harrison got the timing spot on for the UK peak when he updated his forecast in 2005. Phil Anderson also built on this work and told Keen Oz real estate wouldn't crash after 2008. The Asian/emerging market downturn also fits the 18 year theory well, the last Asian crisis being in 1997, albeit now with China as pivotal to the region. This downturn was predicted in Phil Anderson and Akhil Patel's 2014 money week article 'boom times are here again' Keen is right to be bearish on China (Mason Gaffney predicted China's stocks would definitely crash this year, Keen expected it 2015/16), but while this cycle looks like being the weakest since WW2 in terms of real growth I don't think the US/Japan analogy will hold. Japan has a no. of factors which created and sustained it's stagnation, including an initially weak iteration of QE and bad demographics etc that kept speculators away (till a brief period 2006-8 and again recently- though that will likely be short lived too), and true Japan had enough resilience from surplus trade and strong social cohesion to make the lost decade far from catastrophic. The US and UK will be able to push enough onto land speculation for another full cycle, until US land peaks around 2024.

Peak will be at 2026 no?.....(bottom at '28) That's why it will be 18 (yr cycle) from 2010.

intajake No I think actual land prices peaked in 2006 in the US, and the actual crash of course came in 2008. The next land price peak should then be somewhere around 2024, the actual timing of the 'crash' varies (I think Phil Anderson puts the range at 12-36 months, or something) this is partly determined by the govts response and attempts to prolong the inevitable but on average 2026 would be the most likely. Keen here is probably correct in suggesting China are precisely in that prolonging the inevitable stage, and they may have quite a large amount of resources to put into that but maybe mid 2016.

+schumanhuman ahh yes I read Phil Anderson's "the secret of..." a while ago too.And I also remember him writing about the 18 -36 month gap between peak and collapse.But harisson still describes the land led boom as peaking in '26.not sure why and who would be right(granted this would be the UK but I remember reading that the cycle matches US-UK.www.sharetherents.org/forecasting-the-future-again/ I have a question for you too,why does arrested land price inflation,necessarily mean that mortage holders become unable to pay for their mortages,like in the rust states of the US,surely that is an income/job issue(beyond adjustable moratges issue).there is a mechanism/conduit in the system that I'm not seeing.I dont get exactly why when land price no longer accerlates,it translates into an economy wide recession.

intajake 'but I remember reading that the cycle matches US' Sort of, the UK land prices I think lag by about a year or so behind. But the US is the key economy in the Western cycle so by the time the stock markets peaked and began their long bear market fall in the US in oct 2007 the contagion was clearly more synchronized across the region during that phase. A possible parallel right now may be China and Australia, China (nearly as pivotal to the Asian/emerging market as the US are to the Western one) are entering the collapse phase while OZ are still in the early stages and denial. My personal expectation is Oz, and the rest linked to that cycle will be unlikely to avoid a major correction by the end of 2017. If the current western cycle has the same year lag that would put UK land prices at a peak around 2025. Both Harrison and Foldvary stress the exact timing of the land peak, and even more the collapse is not the point at this time in the cycle, 18 years is an average, and I think their descriptions of the cycle, terminology as well as respective focus on US vs UK markets means they differ somewhat. There is a vacant land price cycle, a house price cycle, a construction cycle, a crash point or a longer bear market, a point where you call a recession a depression depending on definitions etc. Regarding the transmission from land price to the rest of the economy, it might take a whole book to adequately describe it but from what I know it comes primarily through the construction industry and then banking sector. There appears to be a sort of 'doubling' limit to mortgage credit cycles which occurs after around 14 years of upswing based on a 5% compounded mortgage interest rate on average (ie at a 5% compounded rate of mortgage interest any principle investment in property would be repaid after around 14 years, Therefore, those, who acquire residential property with a mortgage, are expected to buy a new property only every 14 years). But at this point land prices are finally pushed mathematically too high compared to yields and there is no room to maneuver to juice the market further via IR's etc, developers finally realize it would be disastrous to buy new land at current prices because new projects often take 2-4 years to develop. It is not flat land prices they fear, but when the land price passes a point of inflection (ie grows slower and slower) it soon becomes clear the price will at this trajectory soon begin to actually drop. That means the price they paid for the land will not be covered by the resale of developed land, especially 2-4 years later. Once developers begin to withdraw that reduces demand for land and this depresses the price further. This begins to create fear in the economy further afield. Banks of course use land as collateral to finance new credit, and as around 80% of lending is to Real estate, and about half of that land value (the only bit that grows), so credits exponential rise is intimately linked with land price (though non land bubbles are possible, most are still on closer examination in part land bubbles ie the dot com bubble). So again this exacerbates the speed of the collapse and correction in what is nothing but a huge ponzi scheme. It's not that in 2006 people though houses/land were really worth what they were paying when they looked at yields, but that they expected it to rise even more in the future. Like any ponzi as long as you are not the last one in the gross overvaluation doesn't matter to you as a buyer, but different to most ponzi's lands monopoly means no one can really opt out of either buying or paying rent to access land. So we are all forced to play the game, simple logic should tell us house/land prices cannot rise forever above wages/rents, yet few have a grasp of when the bubble will burst. This is confused further by the mid cycle recession (2019?), which usually does not particularly affect land prices (they become a little flat at worst), making land seem an even safer investment. Or as Minsky would say, stability creates instability, and the ponzi/ exponential phase occurs after this mid point.

Willful blindness Moral & ethical degradation Sycophantic pandering to power

Sadly, yes.

+Nate Blair this is short sighted. there have been other bubbles other than housing. its all about debt leveraging and then debt deflation.

That is not true. There have been other bubbles, but they do not hurt the real economy. Land bubbles, on the other hand, dominate the economy and finance. Real estate makes up 80% of all bank lending. Crucially, lending to factories that buy tools creates deflation, which balances that creation of bank credit, but financing a land purchase only pumps money into the economy and drives up the price of land monopolies (oil, uranium, urban location, farm land, and commodities highly tied to land).

@@johnsnow5534, what solution would you propose?

@@cantankerouspatriarch4981 georgism/geoism (e.g., land value tax)

+Brian Corbie - Brian, our pleasure. Plenty more to come. Thanks for the support and look out for the new Renegade Inc site. We'd love you to sign up.