Seldomly discussed about the treaty of Versailles was that Germany was forced to eliminate all tariffs on imported goods while its trading partners embargoed German exports. This meant that neighboring countries could flood the german market with their goods but Germany could not retaliate. This led to massive imbalances and lack of hard capital.
That was the reason that they started WW1 in the first place, they did not want Germany to succeed commercially on an international basis. So instead of trying to compete honestly they set out to destroy Germany, sound familiar?
Eh, the treaty of Versailles was a joke and Hitler knew that. The amount of gold enforced was higher than the physical amount mined under ratification. Utter nonsense.
So much of what people 'know' about history is flat wrong. When you take the time to look into history, real history not propaganda, it is fascinating and enlightening. Which explains why it is illegal to question 'history' in some places.
If you ever want to see how upside traditionally taught history is you need to investigate the treat of Versailles and the actual terms and reasoning behind them. We were taught that the repayment terms were designed to punish and enact revenge but the opposite was in fact intended. The quote of the treaty being a "truce for twenty years" was not said because they(the diplomats negotiating the terms) thought the terms were too harsh but rather that they felt the term weren't 'harsh enough'.
@@ireneuszpyc6684 People feared communism and there was economic breakdown and desperation. This occurred long before concentration camps and mass warfare and murder.
The "people"who feared communism was the wealthy oligarchs,actually,the USSR so an improvement in éducation,housing Access, the end of endemic crisis and access to healthcare,thats why the ruling capitalist class financed the nazis@@MikeNewland
In the late 70’s my ex wife and I had dinner with some friends who were bragging about their investments. We didn’t have investments because we were a little younger and I had just started my career. On the way home my ex told me that she thought investing was stupid and that if you had money you should be buying things with it, a theme that lasted the next 15 years until I got away from her. In retrospect I think she may have had a point, if only accidentally, because inflation at that point in our lives was very high.
The influence of OPEC in the 1970's as the US Fiat Currency was almost becoming accepted, was small compared to influence as 159 nations seem to have consolidated their power, to affect prices of resources that represent around 70% of all available resources today. This is not Your Daddy's Stagflation.
I also think he overlooks the destructive power of inflation, he claims 3-5% is good for a productive economy which means goods will rise at this price and double every 14-25 years so cost of living will increase at a compounded rate but wages will never keep up but also assets like property and equities will rise eventually causing speculative bubbles and increasing the wealth of asset holders against the working class causing an ever increasing wealth gap, so essentially incentivizing rent seeking assets and dis-incentivizing productive works
When wages don't keep up, the production cannot be bought and therefore not be sold. Same happens with rent seeking: those, who are able to pay the rent will become less and less. But when inflation comes from wages, the world looks totally different: it reduces profits and requires investments into production to increase profits by getting rid of the workers. At the same time, when inflation comes from wages, labour is a scarce resource. Others will use those unemployed to make money too. This generates growth and growing wealth.
"but also assets like property and equities will rise eventually causing speculative bubbles" You are confusing CPI and asset inflation. Not only are they different things, but CPI is driven by pushing spending up while asset price inflation is driven by pushing spending down compared with asset investment. Of course this ignores, as one should, nominal changes to currency that have to be factored out to look at changes to standards of living. It is precisely the low inflation hawks that have created the everything bubble.
@@ThomasVWorm The consideration of Inflation originating outside the USA appears to fail to be discussed? I saw some indications of increasing Commodity prices in 2015 so I began to watch ti see if it was a trend. 2016, thru 2019 seemed to indicate raising resource prices worldwide. Then we got the Plague. Now all the inflation appears to be blamed on Covid. Was it introduced to distract Em? Is there anything the FED and interest rates will do to affect Commodity Costs as the Producer Nations who sit on 70% of available resources now seem to have joined a Trade Union? Is the FED incapable of controlling costs when suppliers are naming the price, not US Commodity Brokers? That discussion of cost increase as we watch Ships arrive at US Ports, appears to be absent? Is that an important oversight?
The problem with inflation (money debasement) is that it causes bubbles, financial and real estate. The 1920's is a great example. Today's biggest bubble is the national debt, the interest on which is going to cause much higher inflation.
What if you mix up cause and effect? What if those bubbles cause money debasement. National debt is the consequence of those bubbles. In order to keep things going the government must stabilise demand. It does it by taxing less than it should and therefore enable more demand where saving reduces it. The problem are the rich. They make more money than they will ever spend for consumption. By this, they destabilise the economy. So make them much much poorer by higher wages. They should have not much more than to afford an expensive house and a few expensive cars etc. to live a rich life. This is enough of an incentive.
Also, there are several measures to cope with the natural end of the (monetary) market system: General Market Saturation. Consumer debts, money thrown into the masses to try to increase consumption and so demand for labor just a little longer. Also FIAT money, interests and stock market gambling are creating incomes, purchasing power, when those who could afford it satisfied their needs and consume less which leads to the total collapse in a chain reaction of deficiency of purchasing. The market religion is based on BS-Jobs since the post WWII collapse which was propagated as oil crisis, but in fact was just the inevitable Market Saturation which is happening around every 10-20 years and then a restart is required, ideally with a war to destroy all the finished work to create a lot of jobs when everything must be redone and consumption booms because people need to get back what they lost. Afterwards they did what Paul Mazur said and reeducated people to consumers and breed them as such by using Public Relations Propaganda, this helped to make the (monetary) market system work for a couple decades but at the expense of human sanity, literally, todays societies are lead by self-esteem and identity disorders and try to cope with mindless consumption, which lead to planet overshoot. S Second round of consumerism is not possible and so the market religion will be maintained with a Cradle To Cradle renting system, "you will own nothing and be happy".
@@Wilson84KS market saturation is a false diagnose. You cannot increase consumption when there is a saturation on the demand side. What we do see instead is a malfunction of the market regarding distribution. Those, who provide the labour to produce and want to consume don't get enough money to be able to demand, what they produce. It is absolutely pointless to produce only to hoard money. But this is what the rich do. They imbalance supply and demand by hoarding money instead of paying reasonable wages. This is not market saturation but what generates a permanent instability of the market and which makes a population live far below their abilities because of one economic crisis following another. An imbalance of the household of the government, which is complementing the imbalance of the market therefore stabilises the market. But since the imbalance of the household of the government comes from taxing less, the wealth of the rich are taxes not yet being yet. Which means, the rich owe a part of their wealth to the government. So the fix is not to make the market crash but to tax the rich.
Steve I like your work here on RUclips, but I followed that application link in the description and it's giving off some strange vibes. Why not just show what the class offers and how much it costs at a glance? It seems like you have a questionnaire there to make the potential customer feel like they're part of some exclusive group so they are more likely to purchase the item. That isn't a tactic that aligns with the honesty I sense from these videos. Likewise, if your ebooks are free, why require that I give you my first and last name in order to download? Not sure what's going on with those websites but if it doesn't sit well with me there are probably many others that feel the same way. Just trying to give honest feedback because I think the core messages you are trying to give here are good intentioned and I want to see you succeed.
The marketing unfortunately is out of my hands, and I agree with your reaction to it. I've tried to convince the company behind it that this approach is more likely to turn off my audience than attract it, but I haven't won the argument, so ultimately I've just given up. On the argument, not on them, because (a) some people still do sign up, and they might not go for a direct pitch (I just don't know) and (b) despite the feel that pitch gives off (I agree with you again), the people behind the marketing are very ethical, and I like them a lot. They've also given me a link for people who want to bypass (most of!) the marketing guff: book.stevekeenfree.com/. Hopefully with more feedback like yours, they'll be willing to give a more direct pitch than the current one.
@@ProfSteveKeen booshit. A lie is a lie no matter who you tell it to. That fact is going to stick. It's not even possible to know who, or what, is posting as profstevekeen anymore.
@@GhostOnTheHalfShell Generally I agree with 90-95% of what's being posted in my name GOTHS. And if it wasn't being done, financially I would have been forced to sell my flat in Amsterdam and retire to Thailand.
@@ProfSteveKeen Thailand is pretty nice from what I hear. Looking to move there myself from South Africa. It's rather ironic how much the local politics in ZA repeats an anti-colonialism rhetorical, yet in terms of fiscal policy is entirely beholden to neoliberal ideas. We've got the rise of the topic of this video: Nazis. These are the African kind however; wearing berets and making hyper-nationalistic and xenophobic promises to a population that is burdened by chronically-high unemployment and a dangerous GINI coefficient. It would be really great if yourself would make your way down here at some point, perhaps point-out bluntly in your Aussie style the logic of wanting outside investment to achieve local development goals using local resources is, well, insane. Maybe a place to retire to, if you can handle the various issues that are here....
@@warrenarthur5629 It is and I'm helping my extended family build a house there that will be my second home. Great culture, almost the only one that has neither been colonised nor been a colonizer. I've been to SA once, to Stellenbosch and Cape Town about 20 years ago. I enjoyed it.
Prof. Keen, I see the value of a depreciating currency that you point out (eg. the stamp scrib notes), but I don't see how that reconciles with the rational incentive for people to purchase non-depreciating assets. If money depreciates (slowly but deliberately as a policy decision), then it seems that there's an unbalanced incentive to immediately flip your paycheque into assets gold / silver / bitcoin / real estate / etc. Anything that you don't want to buy in the very short term, like food, would be put towards assets. Now, gold doesn't have that many important non-monetary purposes, so maybe it doesn't matter if people are hoarding gold as a means of storing value. But it does seem like there's a very delicate balance to be maintained here, because any alternative asset can make a play to become an appreciating shadow currency that people hoard to store value instead of exchanging with each other. Once it starts to appreciate, you'll get a runaway feedback where people prefer to flip their currency for that asset even more strongly, and may even borrow one to buy the other. (And if that asset is something that is actually useful, like real estate, then you have even bigger problems). I don't see a way to defuse that loop other than for your currency to always maintain some non-negligible threat of appreciating against those assets, so that it's always risky to bet too strongly against currency. If the government always promises to intervene against deflation, then betting against the currency becomes too safe a bet. That's the conclusion I come to from thinking about this problem -- but maybe you know of a better solution?
It's difficult jbay. We need to focus less on financial assets (which net to zero) and more on non-financial assets (productive assets). A Gisellian economy would have a far smaller financial sector, a much larger turnover of money, and much more production. So I think that might address your concerns. But at the same time we need a money which reflects planetary boundaries--a multidimensional money in other words--and that's a problem I haven't had time to address.
@@ProfSteveKeen I agree; financial assets get too much focus, and productive assets like real estate are the bigger concern. (I remember George Monbiot laid out a planetary-boundary currency scheme in his excellent, albeit somewhat dated, 2006 book "Heat: how to stop the planet from burning".) But I think things like gold or crypto speculation have real-world consequences, and as far as I can see, only the veiled threat of deflation really keeps them in check. In the short term a gold or crypto explosion is a net zero redistribution of wealth, but in the medium-long term it may be net negative. Not only due to obvious things like power consumption or gold-mine waste, but also because it reallocates capital and purchasing power from productive investments and industrious workers to unproductive assets and their owners, creating incentives that point in the wrong direction. I think people felt this strongly during the COVID asset boom; why work 12 hour shifts on the frontline at the hospital when your highschool dropout friend is making more than that in asset appreciation while sitting on their sofa? Deflation is full of huge downsides, but I think one real upside is that it flushes out overleveraged asset speculators first. And so even if that deflation never materializes, at least the risk of it might discourage that kind of leverage. Any hard-coded policy that removes the risk of deflation ever happening would change that calculus immensely, and I do think there are real consequences to that. (By the way I immensely appreciate and respect your willingness to engage with the lay public, like me, in these conversations!)
You make some good points in my opinion. However, I do believe that the asset-price-inflation you mention could be handled by appropiate legislation if it gets out of hand, as well as (structurally) desincentivice financial asset speculation. But there are logistical challenges (at least as long as there's still money in the form of cash) and also in terms of international trade/Forex! Still to this date, for me the ideas of Gesell are some of the best that economics has produced in roughly 250 years. But, as usual in economics, these ideas are silenced by the ones benefitting from the current system...
@@wsp2017 I think it's tough to solve an incentive problem using legislation. The legislation needs to be completely leakproof, and that's very hard to do in practice. You can ban owning gold, but then people will instead trade claims to gold held in vaults overseas, shares in holding companies that own such claims, etc. Or worse, shift their speculations into productive assets like real estate. The most leak-proof would probably be something like capital gains taxes, because those target the incentive itself, but those don't discriminate between productive and unproductive investment, penalizing both equally.
@@wsp2017From my experience, appropriate regulation is an oxymoron. The few times it’s had effect is when real mavericks have been in charge: the Pecora Commission in the 1930s ans Bill Black during the Savings and Loans crisis. Otherwise you get people with an inferiority complex towards the finance sector who aspire to work there one day. I’d prefer laws drafted by people who actually understand the system. But that seems likely never to happen.
The secret was Bills of Credit, like Oeffa Bills. They were credit at first. They looked like a check, a three party instrument. The issuer was a state corporation. The receiver was a targeted corporation or municipality. They were discounted (paid in Reichsmarks upon turn in) by a bank. The bank would hold them and earn interest. In this way they were non usurious state credit as the new money flowed outward from the Reichsbank. The bill was also examined to make sure commensurate goods were produced. The bank was forced with a due date, to eventually turn in to Reichsbank. This then expanded the ledger at Reichsbank. Ford knew that a bill and a bond were both legal sovereign operations, but I doubt he comprehended the German bill system. That most likely was Reinhardt. Even Schacht had a hard time understanding them.
So basically what Germany did since WW2 is to keep wages caped not allowing inflation go up and German companies pocket big earnings on huge export. Employment was high and tax flow for government was huge enough.
And they basically need to constantly be at war because it's unsustainable. They looted the jews, then the countries they conquered. A lot of the tanks germans used during battle of france are Czech. A lot of tanks used during barbarosa are french. Germany alone cannot sustain its ambition.
Germans appear to take pride in Precision. Their products do appear to be produced with exceptional amounts of durability. That has sustained the ability of German Products to provide a good source of income to Germans. I have met many Germans who were visiting America, and some who moved to the USA to operate business. They all seemed to take pride in their stable economy, until the USA cut them off from affordable Energy. The Balance of cost to output that kept Germans prosperity flowing is gone to support the US Economy. That consideration appears to be something that is emerging as they elect Representatives who promise to free the Citizens of Germany from the oppression that the support for the USA is now imposing on them. Europe will not continue to send money to the USA to maintain the fragile GDP that seems to keep the US Currency afloat.... That seems to scare the Investor Class who meet in Davos in Winter, and in Wyoming in the Fall . They seem to see the end of domination by the Oligarchs, as French Monarchs did at one time.
Well im not in conspiracy theories but US didn't cut West Germany of USSR Oil/Gas starting from Will Brandt up to Kohl and stupid Merkel. Ronald Regan warned them not to put all eggs in one basket but greed Germans didn't listen. Precision yes but nothing special comparing to Japanese or even Americans, North Italians, Swiss..
From my memory, Germany has been heavily unionized and the union workers had a high standard of living. So no wage capping was involved with its economic successes, apparently.
@@phillipschuman4307 Germany in 1930's was dealing with low output and the lack of Customers with a Budget big enough to support Krupps industrial production. Like the USA in 1930's there was little cash to support industry, similar to today's situation, so is Trump the modern Hitler?
Money origins in credit and vanishes with credit repayment. Credit has a term. Therefore: money has a term. When the debtors cannot pay back their debt, because of long term saving, they go bust. When to many go bust, the bank goes bust. When the bank goes bust, the savings are lost. Money does have a term.
Money was proposed to be supported by Treasury in 1970. That did work for longer than some imagined in 1971. After 2002 the US Treasury stopped selling enough to support the US Dollar. So for 20 years we watch as the experts enjoy the game, and the increasing numbers of Consumers stop Consuming, the bottom line begins to look fuzzy? 50 years of Fiat Currency has endured somehow by some large Bluff. How long will the currency survive?
@@danielhutchinson6604 forever. There is no such thing as "fiat currencies". This word origins in a misunderstanding what money is all about. Money is a bookkeeping system. It is a bookkeeping of debt in an economy. As long as you do the bookkeeping correctly, your currency will last forever. If not, you start again like when a bank crashs and is replaced by another one.
Excelente exposição de ideias. Plausível. É fundamental colocar os estudantes de Economia a pensar de forma não ortodoxa. Discutir alternativas às teorias comummente aceites, ensinadas nas faculdades e papagueadas acriticamente pela maioria da opinião especializada.
According to the chart, unemployment was already decreasing, and inflation rate back up to almost 0% when Hitler took over. So, did he had influence already before his official start?
3:03 Um, no. The Nazis took over Austria the month before the referendum (referred to as the Anschluss). We can't take the reported result at face value because it was Nazi propaganda. Additionally, Austria was very Catholic (around 80%). Throughout Germany, Catholics did not vote for the Nazis (see for example Spenkuch & Tillmann, 2017). The exception was German Catholics in Silesia, to distinguish themselves from Polish Catholics (because Silesia had, quite some time previously, been annexed from Poland). It's extremely unlikely that Catholics in Austria would be the exact opposite of their German counterparts. What's more likely is that the ~20% of Austrians that were Protestant would've voted for Hitler. Whilst Hitler was a Catholic, to begin with, as were a disproportionate number of the Nazi leadership, the majority of Nazi voters and followers (by followers I mean those that became SS members or parts of the Nazi Party apparatus) were Protestant. (That said, many of the party faithful became Gottgläubigkeit, non-denominational "Believers in God," in the lead up to the war, including a good number of Nazi neo-pagans.) 6:14 Also no. For the 1930 through '32 elections (of which there were three), the Nazi Party had significantly dialed down their racism in order to do better in elections (see Voigtländer & Voth, 2012). And even then they only got 37.3% of the vote in mid-1932, dropping to 33% for the follow-up election in late 1932, just prior to Hitler being made Chancellor. Their voting numbres shot up in the March 1933 elections, but that's because Nazis were already in enough places to falsify voter returns. All subseqent elections were not free and fair; so they'd had plenty of practice by the time they got to Austria. 8:00 The town of Preston in North West England is doing something similar to Wörgl, but not with a new currency, they're just encouraging all businesses and especially local body government departments to spend money locally, first: www.preston.gov.uk/article/1339/What-is-Preston-Model
"We can't take the reported result at face value because it was Nazi propaganda" Not just propaganda. Pressure and no secret ballot and pre-plebisciet warnings by the Gestapo helped. However, I am convinced based on the writings especially of Karl Kraus, that a majority of Austrians, aside from the citizens of Vienna, the intellectual centre, would have voted for the Anschluss anyway.
@@krautsky Well, that would fly in the face of the voting patterns of German Catholics, as noted above. Given that Prussia had tried to do away with Catholics entirely in the 1870s and '80s, and the majority of Germany was Prussian, by outlook, if not by lineage, that seems unlikely. Probably worth noting that Kraus died two years before the Anschluss, and he had been writing about Jews wanting to join Germany at the time, but this was probably satire, given that such was his stock in trade. According to a recent translator of his work, Michael Russell, “Kraus responded to agitation for Anschluss ... declaring that “the hypnotic power of newsprint was creating a ‘counterfeit reality’ in which ‘nothing is real except for the lies,’” so Kraus was aware of the media manipulation.
Back in the day, I heard that the allies were ready to attack with chemical agents and they were attacked then by the Germans in Barry Italy. Of course the people asserted to me, that this was a propaganda. It was needed about 45 years for the US, UK to reveal that were having ready some thousand tones of mustard gas to attack Germany. The main problem with your argument is the censorship of all historical aspects of the war. On the lucky side, perhaps in 50 years from now, you will find some plausible data that the catholics in Austria were actually pro nazis. Anyway, good luck. The next two months perhaps will be tragic comedic for everyone in Europe; in US the things are already lost.
Ford also built factories in the Soviet Union during the 30s, who of course, stole and implemented Fords famously efficient manufacturing processes in their own factories. Meanwhile, the "German" way of manufacturing high quality individually fitted parts, aka German over engineering, made their manufacturing processes ridiculously time consuming and expensive. The best way to imagine this is if your car could only use replacement parts, custom made at the factory for that specific car only. It's a logistical nightmare.
The local currency worked as a tariff. You had to buy from your neighbor who had to buy from you (fellow resident of the city.) Their currency exempted them from the dismal economics practiced in the rest of the country.
The issute with making spending the most important thing in an economy is how we protect old and ill people who wont have money to live when they no longer can take part in spending and need others to look after them in their illness or old age. How do pension saving figure in your economic model??
They should be funded by the government and set at a level that allows retired workers to have a decent standard of living. One of the travesties of Neoliberalism has been privatising pensions, which benefits the rich and well paid over the poor and leaves poor people in penury in their old age.
What's more important is the material and social state we get in the future, rather than the abstract thing we use to count around them. Money is fundamentally NOT a 'store' of 'value', it is a social token used in transaction between the past and the present. It is only a 'store' if a lot of other assumptions are held constant, which means the 'is-relationship' is not part of its fundamental nature. It doesn't matter how much "money" there is saved if the resources are not there to be bought in the future.
@@ProfSteveKeen exactly what happens, resulting in demographic catasrophe, where the young crippled financially and can't afford to have children in a young age.
@@ProfSteveKeen agree that pensions should not be a profit centre. But we should still have money in our old age to allow the retired to decide how to live their post work life and not depend in a government giving us that lifestyle. If left to our governments you will be forced into a crappy care home of their choosing and have no say in it.
@@garrettosullivan8830 Agreed, But that should be personal savings on top of an already adequate public pension. I have no qualms about people saving for their retirement: what I object to is the situation we now have where the aged pension is about half what is needed to rent a one bedroom flat in Sydney. If you listen to my next podcast with Phil Dobbie, you'll hear that a relative of his has been made homeless by that--pension of about A$600 a week versus rent of $1000 a week--after a lifetime of being, as it happens, a nurse.
Good take on inflation and also Hitler's rise to power. Here is an idea I got from an interview on Kitco News some time ago. (Credit to Larry McDonald.) If the inflation rate is higher than the Fed rate, the deficit will be slowly defaulted away over time. Yes? No? Implications?
Can I admire the obvious intellect,but have a sense he's off in the weeds. I've listed to him a few times and wonder how people retire independently. Not everyone wants to pump their products forever.
Clever people have asked this question. Others state if you don't learn from history. And in the month of remembrance America voted for fascism and racism. Americans will reap what they have sown
Some economists have projected that both the U.S. and parts of Europe could slip into a recession for a portion of 2023. A global recession, defined as a contraction in annual global per capital income, is more rare because China and emerging markets often grow faster than more developed economies. Essentially the world economy is considered to be in recession if economic growth falls behind population growth.
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“Jessica Lee Horst”, a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
What you describe is a necessary function of money. The self-balancing of savings and spending. When the value of the currency is rising, people save more, but only up to a point. When it gets strong enough, they spend it because they have more savings than they need. It is an automatic balancing act. I almost think economist want boom and bust cycles and all the pain and suffering associated, because this makes themselves more relevant and important than they deserve to be.
I think more so, it benefits the rich. The rich are obviously the large holders of assets. The boom benefits them. And if you're aware of pump and dump schemes in the stock market, most rich people have their wealth professionally managed by family offices or portfolio investors. Many of these could colluded together to pump the price of stocks and then, when the retail investors get into it for some quick money, they all exit together. Causing the stock price to free fall. Now, this similar situation can be extrapolated to a longer term horizon of 4-5 years, where the professionals would keep pushing the entire stock market along with other assets higher. And when retailers get excited and buy enough from them at exorbitant prices, they will all disappear with 2x-3x returns, leading to a crash or a bust and a few years of bearish environment.
Ouh my market gods... What caused that first short "miracle" was rebuilding the infrastructure of Germany that created a lot of jobs and so purchasing power and so a short-term consumption boom because people needed to get back what they lost. Creating an own currency was only done to delete all consumer debts that are thrown into the masses to try to increase consumption and so demand for labor for a little longer to cope with the natural end of the (monetary) market system: General Market Saturation. But consumer debt like other measures lead to inflation. Then the mother of planned obsolescence was required again to destroy all the finished work and to rebuild everything afterwards which again creates jobs and so purchasing power and leads to consumption boom: War. Hitler didn't rise into power and he didn't do anything, he was put in and made popular by using Public Relations Propaganda, exploiting peoples fears and hopes and social nature and so on. At the beginning it sounded like he would tell how money is giving the opposite feedback of what is required for economizing, goods that are becoming scarce only increase prices which makes them even more scarce, in a real economy the feedback is that more goods must be produced. But hey, "economists", those people who don't even know what the word "economizing" means and why we have to economize, those who believe that everything is happening in the vacuum of space, just two people agree, no conditions, no influencing factors, nothing, market gods swing their invisible hand and cause economical miracles with magical pricing and the "economists" look at their glass sphere and do their foreseeing.
Very interesting take and you're probably right, but who would you say put Hitler there? I mean, wasn't he a dictator? The mother of all planned obsolescence: War. ^Gotta love this.
@@danlightened Probably the same truly secret society that all those conspiracy nonsense spreading libertarian influencers never mention, today known as the Mont Pelerin Society that is behind every "right-wing" fascist party and individual, the biggest lobby of capitalists with basically unlimited budget made up by the Austrian School of Economics. But this is just guessing and we will probably never find out, which is not that relevant but only that we learn about the system and abolish it asap.
@@danlightened Thank you for reading and your reply, I tried to answer you in different ways using different words but youtube is keeping deleting my comments, what really matters is that we learn from the past, especially about the system and replace it with a real socioeconomic system based on natural laws, science and engineering, a system that is truly about economizing and not about creating and exploiting scarcity artificially through property and the contract law to exploit it for power.
@@Wilson84KS Oh man, I didn't know RUclips did that too. It's common on Instagram tho. They find everything offensive these days. Maybe it has to do with you using the word Hitler?🤔
@@danlightened No, you used it too and your comment is still there, yt has a function for many years already that if a comment has been deleted every other comment that contains similar lines will be deleted as well, but I think by using gemini they developed this even further, it recognizes the same written in different words, I know yt and avoid triggers but it is not possible to know what is not acceptable for them, definitely a lot of protectionism for capitalism.
It seems like you are missing a point, what you spend the money and why you spend it is also important. There is an alternative to get people spending other than inflation, specially when times are good, that is to make sure they don't have to save in case of emergency. Sure people spend a more money when there is inflation, but, given the examples you talk about here, that rate needs to be quite high. I also lived in Japan where there is deflation, and I didn't know anyone who would not spend because of deflation, people saved to buy houses, and because of their culture. People don't spend to protect themselves from the future, if there is not fear for the future then they will spend happily, imagine the last time you went out for dinner... did you save money, or may be you treated yourself to an overpriced glass of wine? Well.. that was a bit of a rant :) Interesting video
5:20, we look at a chart of the first derivative of financial pain. People integrate that rate @ProfSteveKeen. Everything in the universe integrates all the forces acting upon it. Stuff your clickbaity bullshit. Whatever comes next is guaranteed ripoff.
Loved reading the comments by some very knowledgeable people on here. But I'm a bit disappointed. I was expecting people to discuss about the impact of economic conditions on politics and visa versa. Often, poor government policies and wars would lead to poor economic conditions. Which would cause civic unrest and some people will rise from these to usurp the present political system. It could be some good revolutionary or someone wild, like Hitler here.
There are other aspects that led to Hitlers rise. - the people did mostly not believe in democracy and parliamentarism. The political landscape was much fractured in monarchists and nationalists on the right and communists and socialists on the left. - The extremists outside the democratic spectrum were fighting in the streets, there was much violence and political murders too. The right wings around Hitler were more organized and the communists on the left more anarchic what was a big argument for many. - of course, the inflation of 1923 was a huge problem and raise doubts on the system but also the 1929 aftermath with huge unemployment - by the way much fired by the gold standard and following international recommendations about austerity as the gold bugs wanted. - in the end Hitler and the right wingers won - he had a coalition with the former monarchists and also ultranationalist DNVP one year after the unemployment rates started to go down by the way. - The nazis made women go back to kitchen and children, so the unemployment numbers were cut significantly. Same time they raise huge government projects in infrastructure and army mostly financed by US credits. The situation of the normal german did not improve but the feeling was better fired by state propaganda from nationalized media. - the credits were so huge, germany would have been unable to pay the rates from app 1941 on. they elongated the period of abiltiy to operate by robbing from the jews and after they started the war they looted the occupied countries of course.
Why would deflation be more special than hyperinflation? Just because deflation was chronologically closer to hitler's election, does not mean that deflation had a greater weighting on the causation of his emergence. Deflation doesn't always cause unemployment, but high unemployment will always cause deflation because people don't have the money to afford the necessities at previous price levels, and businesses are encouraged to sell at a loss to feed themselves for the time being. The high unemployment was caused by the erosion of capital stock of domestic businesses due to decrease in domestic demand caused by reparations and flooding of foreign goods; embargo on german goods, decreasing foreign demand for the domestic goods. The lack of profit disallowed businesses to reinvest and maintain their production lines and employmentment levels. Japan has experienced deflation in 90s and they never experienced severe levels of unemployment. So saying that deflation was the superior antagonist to the hyperinflation is ehmm... you know... But what do I know, I'm just a dummy 🤪 .
I'm glad you admit you might not know it all. If you want to learn, start with Irving Fisher's classic paper on debt deflation: fraser.stlouisfed.org/files/docs/meltzer/fisdeb33.pdf. Japan didn't have the same fate because its deflation was much lower and its government spending level was far higher than the USA in the 1930s.
I think you are wrong about hyperinflation. It is not a massive destruction of resources. Hyperinflation has as little to do with normal inflation as a short squeeze has to do with normal stock price increases. You are right to talk about the French reparations, but like many economists you are focusing on the interior of the economy and ignoring the border between that economy and the world economy. The mechanism involves fixed need for foreign currency getting close to the total world need for local currency, which is obviously something very highly dependent on currency pricing. Please notice the difference between fixed needs and marginal needs. Marginal needs are met by continuous currency price adjustments, whereas if a billionaire wants to buy a gallon of milk and the price is 100 dollars, he simply buys the milk and there is no marginal decrease caused by the higher prices. He is, by the nature of currency exchanges, committing more local export potential to that gallon of milk, though.
He said, hyperinflation is the consequence of a massive destruction of resources and the government papering over it. The destruction of resources was the strike against the french an belgium troops, who tried to redirect steel and coal from Germany to France and Belgium. Without coal and steel Germany did not have anything to sell, since this also affects the industries in Germany who all depend upon coal and steel. So Germany had nothing to sell when Germany started to buy foreign currencies with printed Reichsmark. So it had to give more and more Reichsmark for foreign currencies, which increased the prices for foreign goods to the Germans. So how much of your local currency is needed by the world depends upon how much you can sell. When your industries stopped producing because of workers striking or your resources being redirected out of your country, you have nothing to sell. Same happens within the economy itself: you cannot buy, what is not produced.
I can't say keen is an unlikable guy. I listen to him. But I'm a heathen. The idea that the only way to have a monetary system is to borrow it is incredibly low brow.
No. It is what money is all about. It is a bookkeeping system of debt. Only debt explains, how money does really work. And debt does not origin from borrowing money from the bank. Here is the math: I have no money at all and no debt. My balance: debt + money = total $-0 + $0 = $0 Now I borrow $100 from a bank and it puts $100 onto my bank account. $-100 + $100 = $0 So still $0 which means no debt. Nothing did change by borrowing. Now I spend $100: $-100 + $0 = $-100 Now I am in debt after spending. And it does make sense. I bought something and only I got something while the seller only lost something. I owe to the seller to sell him something for the $100 he got from me. The mean of payment is nothing but an IOU, since we do not barter. With barter, we do not have inflation. Everybody gets as much as he gives immediately. Our economic system and markets are based on debt and not barter. The economists got this completely wrong all the time. Only with debt the seller has the problem of inflation: because he is paid with money, he has not been compensated for what he had given.
@@SteveNoverini no. Money always was debt. So he just wants to get rid of existing superstition about money. If you understand money as a bookkeeping system of debt, the economy is far better to be understood. And debt solves a real problem in the economy we do have all the time: that we must be able to buy in order to be able to sell. Simple example: if you need a harvest to pay somebody who gives you the seed, without debt you will never have a harvest and therefore never a seed. Same everywhere: production comes before you can sell the product.
@@ThomasVWorm unless I’m mistaken we were commenting on the current state of money. It is not backed by anything other than a specific groups rule over its implementation and their rule over our nation( and global trade). Money being a representation of a specific amount of gold or silver is fine by me. It is a way to conveniently trade without having to carry around metals. But that currency must be immediately able to be exchanged for the equal value of gold if its user demands from the currency issuer.
@@SteveNoverini the backing of money does not make any sense. This idea comes from economists, who never did have a clue, what money is all about. Money is a bookkeeping system of debt and the mean of payment is just an IOU, which means, it represents what is missing and needed. Gold and silver are only very expensive placeholders for what you do not have but what you do need. And they require an additional economic effort, when you need more of it, because your population and economy is growing. This will lower your standard of living, because you could use the labour for something useful instead. Money does not need to be backed by metals but by debtors who are able to create, what you want to buy from the money. If you get gold instead of food, you will die from starvation anyway.
Of course, this "a small amount of inflation is not a bad thing" is if you want to work in a modern capitalist system based on ever-increasing profits. If not, you don't need high spending or inflation. Also, before the Great Depression, inflation had averaged around 0% for centuries (going up in wartime/bad harvest, going down in peacetime/good harvest and not causing massive unemployment or the rise of fascists). Since then, inflation has risen every single year. "You need some inflation" is similar to the other capitalist idea "you need some unemployment" - they help to increase profits for the capitalist class.
Yes yes. The Fed itself keeps repeating that it won't cut rates till the unemployment is a certain percentage. Some enemployment ensures that the balance always tips in the favour of the capitalist class or the business owners. There's always a looming threat over the heads of the working class that you could be replaced easily because there are unemployed people willing to work harder and for a lesser wage than you.
Disappointingly amateur level of understanding presented with this historical topic, a misrepresentation even, click bait, with the real functional purpose being the draw in and setup for presentation of a general and controversial economic position. Go elsewhere for your history o viewer.
Periods of hyperinflation are kept for longer in the common memory because: - People that use money as a store of value get nuked, so they don't like that. - People that have fixed incomes from wages or pensions will fall on hard times. The thing with unemployment generated by deflation is that while hyperinflation affects everyone, unemployment affects only a percentage of the population. So it's more convenient to create narratives based on hyperinflation than on deflation.
German coal, Soviet , Iranian, Iraqi and then Saudi oil and n. gas followed by Chinese coal - burned and exported mountains, seas and atmospheres daily - is what's driven what we call today - Economy. No chart worth watching unless intersecting with Energy resources, wars, social engineering, pandemic and 'financial crises' trends. Steve Keen, the genuine voice highlighting the role of Entropy, since 2016 and earlier, should stick to the fundamentals - Energy; "In any system of energy, Control is what consumes energy the most. No energy store holds enough energy to extract an amount of energy equal to the total energy it stores. No system of energy can deliver sum useful energy in excess of the total energy put into constructing it. This universal truth applies to all systems. Energy, like time, flows from past to future" (2017).
Depreciating money is like the spoilage limit from classical liberalism, or entropy from thermodynamics. So it kind of makes sense, except, why would we try to have an economy that requires us to work more? Surely, the purpose of progress is to work less?
I've always said that the purpose of progress is to work less and easier and have more leisure time. I mean fire, to cook meat that lasted longer than having to eat your game right then. Agriculture which increased food's shelf life for months, from days, providing more leisure time, allowing people to settle down, have civilizations and allow for language, arts and culture to flourish. We don't need to go places to get our water, we don't have to go to a stadium to watch a match, we can just do it on the TV from across the world. Got planes that can traverse the globe in a couple of days and so on. And yet, compared to any time in our human history, I don't think we're working any less, or with lesser stress or less harder. Leisure time has probably only reduced. Most of our parents and grandparents came before sunset and spent the rest of the day with the family and friends. Now we're coming at nights after being stuck in the traffic for hours, eating some junk and crashing, just to rinse and repeat.
The free market doesn't always work. The fair market price for natural gas being piped into your house by whoever buried the lines is, "How much ya got?"
Because my interview with Kerry O'Brien in October 2008 led to O'Brien savaging a clearly rattled Kevin Rudd the next day on the bubble. A week later the Rudd government doubled to trebled the money given to first home buyers, which restarted the housing bubble. You can read about that here: www.macrobusiness.com.au/2016/02/how-steve-keen-got-the-housing-bust-wrong/ (where you will see that the Cabinet inserted the policy, and not the Treasury); and you can read my reaction to it when what I christened the First Home Vendors Grant was first announced: www.debtdeflation.com/blogs/2008/10/19/rescuing-the-economy-or-the-bubble/
PS Since then the government, Labor or Liberal, has kept the housing bubble alive, using the power of the State to create money as explained by MMT--even if they don't understand the mechanism. So I've given up on the bubble bursting until politics shifts enough that the voters--who will be disenfranchised young people who can never afford to buy a house--force the politicians to change. But I wouldn't expect that for another decade.
@@ProfSteveKeen Houses should not be seen as assets for generating wealth. The lack of accountability among politicians persists, as many young people are becoming disillusioned with society due to their lack of ownership over assets-or even autonomy over their own bodies. It seems we are on a path leading back to a form of modern-day feudalism.
The problem is we are getting a two point punch right now, depreciation and no affordable housing inventory. If it was just inflation, I think all Americans wouldn’t be treading water so hard
Keen's argument doesn't make sense. Deflation and full employment did not lead to Hitler's taking power since they happened from 1933 onward, after Hitler became chancellor. Those policies did make Hitler wildly popular with the Germans resulting in the suspension of elections altogether later in the thirties, but Hitler achieved in 1933.
Thanks for pointing out The Miracle Of Wörgl. After reading it it seems you've left out a significant part of the story. Without knowing about these negative interest rate projects and the research involved, and without much of the reasonably required effort I came to something similar but also wildly different. I'm calling it taxmoney by lack of better word because I needed a word for it since it would exist in parallel to normal money (like the Wörgl script) Taxmoney has an expiration date. After that date it is worthless. All of the government spending is done in taxmoney, it is legal tender, one must accept it. (In the old days, in villages without money, helping someone or doing someone a favor would usually be rewarded with some goods. These were more often than not goods you didn't really want but since they had some value you would accept them, here 5 boxes of onions for you! eh...) The taxmoney, as the name would suggest is to be used to pay taxes. You can use conventional currency to pay taxes by buying taxmoney at market rates where taxmoney near expiration is less valuable. Government spending must somewhat sensibly line up with tax revenue. If the government spends to much the market value of the taxmoney will decline and those doing business with the government (or employed by) would have to adjust their rates.
If taxmoney is more scarce it gets harder to obtain enough of it to pay your taxes and its markt value may increase accordingly. This should invite speculation so that wealthy individuals can earn but also lose depending on government spending which in turn depends on national tax revenue. Taxmoney may be issued with different expiration dates depending on the type of spending. If you live on social support you may get various kinds of taxmoney. Say 200 that lasts for 5 years, 400 that expires in 6 months and 800 in 2 months. Too many people on the government payroll, on social support and to much subsidies and the market value will decline [faster]. The speculation can be automated so that buying groceries automatically exchanges some taxmoney for conventional money or conventional for taxmoney by automated auction. You may get better rates by keeping some in your account. Expiration date and the desired amount can be configured in the automated auction. Manually you may find favorable rates for taxmoney that expires the very next day. If say VAT is 20% you would have to spend the other 80% worth of conventional currency. If you can get 200 worth of taxmoney for 50 you may feel encouraged to spend 800 worth of normal currency - today!
Prof Keen is one of the most insufferable grifters and self promoters in economics. He continually make claims that only he understand basic things that all credible economists do indeed understand. He continually mischaracterizes mainstream economics as "neoclassical" when the neoclassical school hasn't had the ear of policy makers for decades. He actually therefore derides Keynesianism while being an uber Keynesian himself. Although he does toss in some extra stupid from MMT. Oh, and let's not forget to pander to popular quasi-religious nonsense like global warming extremism. That special stupid having been wrong for 40+ years and counting, on 100% of its hysterical claims.
Seldomly discussed about the treaty of Versailles was that Germany was forced to eliminate all tariffs on imported goods while its trading partners embargoed German exports. This meant that neighboring countries could flood the german market with their goods but Germany could not retaliate. This led to massive imbalances and lack of hard capital.
That was the reason that they started WW1 in the first place, they did not want Germany to succeed commercially on an international basis. So instead of trying to compete honestly they set out to destroy Germany, sound familiar?
Eh, the treaty of Versailles was a joke and Hitler knew that.
The amount of gold enforced was higher than the physical amount mined under ratification. Utter nonsense.
So much of what people 'know' about history is flat wrong. When you take the time to look into history, real history not propaganda, it is fascinating and enlightening. Which explains why it is illegal to question 'history' in some places.
If you ever want to see how upside traditionally taught history is you need to investigate the treat of Versailles and the actual terms and reasoning behind them. We were taught that the repayment terms were designed to punish and enact revenge but the opposite was in fact intended.
The quote of the treaty being a "truce for twenty years" was not said because they(the diplomats negotiating the terms) thought the terms were too harsh but rather that they felt the term weren't 'harsh enough'.
@@prismbrandingrealestatebra6301 what's your point?
was it justified, for Germans, to vote for NSDAP?
would you have voted for NSDAP as well?
@@ireneuszpyc6684 People feared communism and there was economic breakdown and desperation. This occurred long before concentration camps and mass warfare and murder.
@@MikeNewland Weimar Republic was secretly arming BEFORE the NSDAP thing: doesn't this say something about Germans?
The "people"who feared communism was the wealthy oligarchs,actually,the USSR so an improvement in éducation,housing Access, the end of endemic crisis and access to healthcare,thats why the ruling capitalist class financed the nazis@@MikeNewland
In the late 70’s my ex wife and I had dinner with some friends who were bragging about their investments. We didn’t have investments because we were a little younger and I had just started my career. On the way home my ex told me that she thought investing was stupid and that if you had money you should be buying things with it, a theme that lasted the next 15 years until I got away from her. In retrospect I think she may have had a point, if only accidentally, because inflation at that point in our lives was very high.
Yeah, high inflation biases people to live more in the moment... Which isn't good, long term.
The influence of OPEC in the 1970's as the US Fiat Currency was almost becoming accepted,
was small compared to influence as 159 nations seem to have consolidated their power,
to affect prices of resources that represent around 70% of all available resources today.
This is not Your Daddy's Stagflation.
I also think he overlooks the destructive power of inflation, he claims 3-5% is good for a productive economy which means goods will rise at this price and double every 14-25 years so cost of living will increase at a compounded rate but wages will never keep up but also assets like property and equities will rise eventually causing speculative bubbles and increasing the wealth of asset holders against the working class causing an ever increasing wealth gap, so essentially incentivizing rent seeking assets and dis-incentivizing productive works
When wages don't keep up, the production cannot be bought and therefore not be sold.
Same happens with rent seeking: those, who are able to pay the rent will become less and less.
But when inflation comes from wages, the world looks totally different: it reduces profits and requires investments into production to increase profits by getting rid of the workers.
At the same time, when inflation comes from wages, labour is a scarce resource. Others will use those unemployed to make money too.
This generates growth and growing wealth.
@@ThomasVWorm you need to stop commenting on youtube and go back and learn austrian economics 1st as you clueless.
"but also assets like property and equities will rise eventually causing speculative bubbles"
You are confusing CPI and asset inflation. Not only are they different things, but CPI is driven by pushing spending up while asset price inflation is driven by pushing spending down compared with asset investment. Of course this ignores, as one should, nominal changes to currency that have to be factored out to look at changes to standards of living.
It is precisely the low inflation hawks that have created the everything bubble.
Like UK property since 1970s. Got so bad ordinary people can never buy a home.
@@ThomasVWorm The consideration of Inflation originating outside the USA appears to fail to be discussed?
I saw some indications of increasing Commodity prices in 2015 so I began to watch ti see if it was a trend.
2016, thru 2019 seemed to indicate raising resource prices worldwide.
Then we got the Plague.
Now all the inflation appears to be blamed on Covid.
Was it introduced to distract Em?
Is there anything the FED and interest rates will do to affect Commodity Costs as the Producer Nations who sit on 70% of available resources now seem to have joined a Trade Union?
Is the FED incapable of controlling costs when suppliers are naming the price,
not US Commodity Brokers?
That discussion of cost increase
as we watch Ships arrive at US Ports,
appears to be absent?
Is that an important oversight?
The problem with inflation (money debasement) is that it causes bubbles, financial and real estate. The 1920's is a great example. Today's biggest bubble is the national debt, the interest on which is going to cause much higher inflation.
What if you mix up cause and effect? What if those bubbles cause money debasement.
National debt is the consequence of those bubbles. In order to keep things going the government must stabilise demand. It does it by taxing less than it should and therefore enable more demand where saving reduces it.
The problem are the rich. They make more money than they will ever spend for consumption. By this, they destabilise the economy.
So make them much much poorer by higher wages. They should have not much more than to afford an expensive house and a few expensive cars etc. to live a rich life. This is enough of an incentive.
Also, there are several measures to cope with the natural end of the (monetary) market system: General Market Saturation. Consumer debts, money thrown into the masses to try to increase consumption and so demand for labor just a little longer. Also FIAT money, interests and stock market gambling are creating incomes, purchasing power, when those who could afford it satisfied their needs and consume less which leads to the total collapse in a chain reaction of deficiency of purchasing. The market religion is based on BS-Jobs since the post WWII collapse which was propagated as oil crisis, but in fact was just the inevitable Market Saturation which is happening around every 10-20 years and then a restart is required, ideally with a war to destroy all the finished work to create a lot of jobs when everything must be redone and consumption booms because people need to get back what they lost. Afterwards they did what Paul Mazur said and reeducated people to consumers and breed them as such by using Public Relations Propaganda, this helped to make the (monetary) market system work for a couple decades but at the expense of human sanity, literally, todays societies are lead by self-esteem and identity disorders and try to cope with mindless consumption, which lead to planet overshoot. S Second round of consumerism is not possible and so the market religion will be maintained with a Cradle To Cradle renting system, "you will own nothing and be happy".
@@ThomasVWorm That's exactly it, creating bubbles to try to increase consumption for a little longer to cope with general Market Saturation.
@@ThomasVWorm you are clueless about economics and just repeating socialist crap.
@@Wilson84KS market saturation is a false diagnose. You cannot increase consumption when there is a saturation on the demand side.
What we do see instead is a malfunction of the market regarding distribution. Those, who provide the labour to produce and want to consume don't get enough money to be able to demand, what they produce.
It is absolutely pointless to produce only to hoard money. But this is what the rich do. They imbalance supply and demand by hoarding money instead of paying reasonable wages.
This is not market saturation but what generates a permanent instability of the market and which makes a population live far below their abilities because of one economic crisis following another.
An imbalance of the household of the government, which is complementing the imbalance of the market therefore stabilises the market.
But since the imbalance of the household of the government comes from taxing less, the wealth of the rich are taxes not yet being yet. Which means, the rich owe a part of their wealth to the government.
So the fix is not to make the market crash but to tax the rich.
Steve I like your work here on RUclips, but I followed that application link in the description and it's giving off some strange vibes. Why not just show what the class offers and how much it costs at a glance? It seems like you have a questionnaire there to make the potential customer feel like they're part of some exclusive group so they are more likely to purchase the item. That isn't a tactic that aligns with the honesty I sense from these videos. Likewise, if your ebooks are free, why require that I give you my first and last name in order to download? Not sure what's going on with those websites but if it doesn't sit well with me there are probably many others that feel the same way. Just trying to give honest feedback because I think the core messages you are trying to give here are good intentioned and I want to see you succeed.
The marketing unfortunately is out of my hands, and I agree with your reaction to it. I've tried to convince the company behind it that this approach is more likely to turn off my audience than attract it, but I haven't won the argument, so ultimately I've just given up. On the argument, not on them, because (a) some people still do sign up, and they might not go for a direct pitch (I just don't know) and (b) despite the feel that pitch gives off (I agree with you again), the people behind the marketing are very ethical, and I like them a lot.
They've also given me a link for people who want to bypass (most of!) the marketing guff: book.stevekeenfree.com/. Hopefully with more feedback like yours, they'll be willing to give a more direct pitch than the current one.
@@ProfSteveKeen booshit. A lie is a lie no matter who you tell it to. That fact is going to stick. It's not even possible to know who, or what, is posting as profstevekeen anymore.
@@GhostOnTheHalfShell Generally I agree with 90-95% of what's being posted in my name GOTHS. And if it wasn't being done, financially I would have been forced to sell my flat in Amsterdam and retire to Thailand.
@@ProfSteveKeen Thailand is pretty nice from what I hear. Looking to move there myself from South Africa.
It's rather ironic how much the local politics in ZA repeats an anti-colonialism rhetorical, yet in terms of fiscal policy is entirely beholden to neoliberal ideas.
We've got the rise of the topic of this video: Nazis. These are the African kind however; wearing berets and making hyper-nationalistic and xenophobic promises to a population that is burdened by chronically-high unemployment and a dangerous GINI coefficient.
It would be really great if yourself would make your way down here at some point, perhaps point-out bluntly in your Aussie style the logic of wanting outside investment to achieve local development goals using local resources is, well, insane.
Maybe a place to retire to, if you can handle the various issues that are here....
@@warrenarthur5629 It is and I'm helping my extended family build a house there that will be my second home. Great culture, almost the only one that has neither been colonised nor been a colonizer.
I've been to SA once, to Stellenbosch and Cape Town about 20 years ago. I enjoyed it.
Prof. Keen, I see the value of a depreciating currency that you point out (eg. the stamp scrib notes), but I don't see how that reconciles with the rational incentive for people to purchase non-depreciating assets. If money depreciates (slowly but deliberately as a policy decision), then it seems that there's an unbalanced incentive to immediately flip your paycheque into assets gold / silver / bitcoin / real estate / etc. Anything that you don't want to buy in the very short term, like food, would be put towards assets.
Now, gold doesn't have that many important non-monetary purposes, so maybe it doesn't matter if people are hoarding gold as a means of storing value. But it does seem like there's a very delicate balance to be maintained here, because any alternative asset can make a play to become an appreciating shadow currency that people hoard to store value instead of exchanging with each other. Once it starts to appreciate, you'll get a runaway feedback where people prefer to flip their currency for that asset even more strongly, and may even borrow one to buy the other. (And if that asset is something that is actually useful, like real estate, then you have even bigger problems).
I don't see a way to defuse that loop other than for your currency to always maintain some non-negligible threat of appreciating against those assets, so that it's always risky to bet too strongly against currency. If the government always promises to intervene against deflation, then betting against the currency becomes too safe a bet. That's the conclusion I come to from thinking about this problem -- but maybe you know of a better solution?
It's difficult jbay. We need to focus less on financial assets (which net to zero) and more on non-financial assets (productive assets). A Gisellian economy would have a far smaller financial sector, a much larger turnover of money, and much more production. So I think that might address your concerns. But at the same time we need a money which reflects planetary boundaries--a multidimensional money in other words--and that's a problem I haven't had time to address.
@@ProfSteveKeen I agree; financial assets get too much focus, and productive assets like real estate are the bigger concern. (I remember George Monbiot laid out a planetary-boundary currency scheme in his excellent, albeit somewhat dated, 2006 book "Heat: how to stop the planet from burning".)
But I think things like gold or crypto speculation have real-world consequences, and as far as I can see, only the veiled threat of deflation really keeps them in check. In the short term a gold or crypto explosion is a net zero redistribution of wealth, but in the medium-long term it may be net negative. Not only due to obvious things like power consumption or gold-mine waste, but also because it reallocates capital and purchasing power from productive investments and industrious workers to unproductive assets and their owners, creating incentives that point in the wrong direction. I think people felt this strongly during the COVID asset boom; why work 12 hour shifts on the frontline at the hospital when your highschool dropout friend is making more than that in asset appreciation while sitting on their sofa?
Deflation is full of huge downsides, but I think one real upside is that it flushes out overleveraged asset speculators first. And so even if that deflation never materializes, at least the risk of it might discourage that kind of leverage. Any hard-coded policy that removes the risk of deflation ever happening would change that calculus immensely, and I do think there are real consequences to that.
(By the way I immensely appreciate and respect your willingness to engage with the lay public, like me, in these conversations!)
You make some good points in my opinion. However, I do believe that the asset-price-inflation you mention could be handled by appropiate legislation if it gets out of hand, as well as (structurally) desincentivice financial asset speculation. But there are logistical challenges (at least as long as there's still money in the form of cash) and also in terms of international trade/Forex! Still to this date, for me the ideas of Gesell are some of the best that economics has produced in roughly 250 years. But, as usual in economics, these ideas are silenced by the ones benefitting from the current system...
@@wsp2017 I think it's tough to solve an incentive problem using legislation. The legislation needs to be completely leakproof, and that's very hard to do in practice. You can ban owning gold, but then people will instead trade claims to gold held in vaults overseas, shares in holding companies that own such claims, etc. Or worse, shift their speculations into productive assets like real estate. The most leak-proof would probably be something like capital gains taxes, because those target the incentive itself, but those don't discriminate between productive and unproductive investment, penalizing both equally.
@@wsp2017From my experience, appropriate regulation is an oxymoron. The few times it’s had effect is when real mavericks have been in charge: the Pecora Commission in the 1930s ans Bill Black during the Savings and Loans crisis. Otherwise you get people with an inferiority complex towards the finance sector who aspire to work there one day.
I’d prefer laws drafted by people who actually understand the system. But that seems likely never to happen.
The secret was Bills of Credit, like Oeffa Bills. They were credit at first. They looked like a check, a three party instrument. The issuer was a state corporation. The receiver was a targeted corporation or municipality. They were discounted (paid in Reichsmarks upon turn in) by a bank. The bank would hold them and earn interest. In this way they were non usurious state credit as the new money flowed outward from the Reichsbank. The bill was also examined to make sure commensurate goods were produced. The bank was forced with a due date, to eventually turn in to Reichsbank. This then expanded the ledger at Reichsbank. Ford knew that a bill and a bond were both legal sovereign operations, but I doubt he comprehended the German bill system. That most likely was Reinhardt. Even Schacht had a hard time understanding them.
So basically what Germany did since WW2 is to keep wages caped not allowing inflation go up and German companies pocket big earnings on huge export. Employment was high and tax flow for government was huge enough.
And they basically need to constantly be at war because it's unsustainable. They looted the jews, then the countries they conquered. A lot of the tanks germans used during battle of france are Czech. A lot of tanks used during barbarosa are french. Germany alone cannot sustain its ambition.
Germans appear to take pride in Precision.
Their products do appear to be produced with exceptional amounts of durability.
That has sustained the ability of German Products to provide a good source of income to Germans.
I have met many Germans who were visiting America, and some who moved to the USA to operate business.
They all seemed to take pride in their stable economy, until the USA cut them off from affordable Energy.
The Balance of cost to output that kept Germans prosperity flowing is gone to support the US Economy.
That consideration appears to be something that is emerging as they elect Representatives who promise to free the Citizens of Germany from the oppression that the support for the USA is now imposing on them.
Europe will not continue to send money to the USA to maintain the fragile GDP that seems to keep the US Currency afloat....
That seems to scare the Investor Class who meet in Davos in Winter,
and in Wyoming in the Fall .
They seem to see the end of domination by the Oligarchs,
as French Monarchs did at one time.
Well im not in conspiracy theories but US didn't cut West Germany of USSR Oil/Gas starting from Will Brandt up to Kohl and stupid Merkel. Ronald Regan warned them not to put all eggs in one basket but greed Germans didn't listen. Precision yes but nothing special comparing to Japanese or even Americans, North Italians, Swiss..
From my memory, Germany has been heavily unionized and the union workers had a high standard of living. So no wage capping was involved with its economic successes, apparently.
@@phillipschuman4307 Germany in 1930's was dealing with low output and the lack of Customers with a Budget big enough to support Krupps industrial production.
Like the USA in 1930's there was little cash to support industry,
similar to today's situation, so is Trump the modern Hitler?
Money origins in credit and vanishes with credit repayment.
Credit has a term.
Therefore: money has a term.
When the debtors cannot pay back their debt, because of long term saving, they go bust.
When to many go bust, the bank goes bust.
When the bank goes bust, the savings are lost.
Money does have a term.
Money was proposed to be supported by Treasury in 1970.
That did work for longer than some imagined in 1971.
After 2002 the US Treasury stopped selling enough to support the US Dollar.
So for 20 years we watch as the experts enjoy the game,
and the increasing numbers of Consumers stop Consuming,
the bottom line begins to look fuzzy?
50 years of Fiat Currency has endured somehow by some large Bluff.
How long will the currency survive?
@@danielhutchinson6604 forever. There is no such thing as "fiat currencies". This word origins in a misunderstanding what money is all about.
Money is a bookkeeping system. It is a bookkeeping of debt in an economy. As long as you do the bookkeeping correctly, your currency will last forever. If not, you start again like when a bank crashs and is replaced by another one.
@@ThomasVWormlol
@@JamesonRutfordPhD "lol" because of what?
@JamesonRutfordPhD who puts "phd" in their youtube pseudonym???
A. holes is the answer.
There's a very good movie about the worgl experiment directed by Urs Egger ... who it seems died unexpectedly young ...
It was very informative.
Excelente exposição de ideias. Plausível. É fundamental colocar os estudantes de Economia a pensar de forma não ortodoxa. Discutir alternativas às teorias comummente aceites, ensinadas nas faculdades e papagueadas acriticamente pela maioria da opinião especializada.
According to the chart, unemployment was already decreasing, and inflation rate back up to almost 0% when Hitler took over. So, did he had influence already before his official start?
3:03 Um, no. The Nazis took over Austria the month before the referendum (referred to as the Anschluss). We can't take the reported result at face value because it was Nazi propaganda.
Additionally, Austria was very Catholic (around 80%). Throughout Germany, Catholics did not vote for the Nazis (see for example Spenkuch & Tillmann, 2017). The exception was German Catholics in Silesia, to distinguish themselves from Polish Catholics (because Silesia had, quite some time previously, been annexed from Poland). It's extremely unlikely that Catholics in Austria would be the exact opposite of their German counterparts. What's more likely is that the ~20% of Austrians that were Protestant would've voted for Hitler. Whilst Hitler was a Catholic, to begin with, as were a disproportionate number of the Nazi leadership, the majority of Nazi voters and followers (by followers I mean those that became SS members or parts of the Nazi Party apparatus) were Protestant. (That said, many of the party faithful became Gottgläubigkeit, non-denominational "Believers in God," in the lead up to the war, including a good number of Nazi neo-pagans.)
6:14 Also no. For the 1930 through '32 elections (of which there were three), the Nazi Party had significantly dialed down their racism in order to do better in elections (see Voigtländer & Voth, 2012). And even then they only got 37.3% of the vote in mid-1932, dropping to 33% for the follow-up election in late 1932, just prior to Hitler being made Chancellor. Their voting numbres shot up in the March 1933 elections, but that's because Nazis were already in enough places to falsify voter returns. All subseqent elections were not free and fair; so they'd had plenty of practice by the time they got to Austria.
8:00 The town of Preston in North West England is doing something similar to Wörgl, but not with a new currency, they're just encouraging all businesses and especially local body government departments to spend money locally, first: www.preston.gov.uk/article/1339/What-is-Preston-Model
Nasi translate to ancient. Austerity Heritage, hence the swastika.
"We can't take the reported result at face value because it was Nazi propaganda"
Not just propaganda. Pressure and no secret ballot and pre-plebisciet warnings by the Gestapo helped. However, I am convinced based on the writings especially of Karl Kraus, that a majority of Austrians, aside from the citizens of Vienna, the intellectual centre, would have voted for the Anschluss anyway.
@@krautsky Well, that would fly in the face of the voting patterns of German Catholics, as noted above. Given that Prussia had tried to do away with Catholics entirely in the 1870s and '80s, and the majority of Germany was Prussian, by outlook, if not by lineage, that seems unlikely.
Probably worth noting that Kraus died two years before the Anschluss, and he had been writing about Jews wanting to join Germany at the time, but this was probably satire, given that such was his stock in trade. According to a recent translator of his work, Michael Russell, “Kraus responded to agitation for Anschluss ... declaring that “the hypnotic power of newsprint was creating a ‘counterfeit reality’ in which ‘nothing is real except for the lies,’” so Kraus was aware of the media manipulation.
Thanks for this. My knowledge of German and Austrian history is amateur level only--I've never specialised in it.
Back in the day, I heard that the allies were ready to attack with chemical agents and they were attacked then by the Germans in Barry Italy. Of course the people asserted to me, that this was a propaganda. It was needed about 45 years for the US, UK to reveal that were having ready some thousand tones of mustard gas to attack Germany. The main problem with your argument is the censorship of all historical aspects of the war. On the lucky side, perhaps in 50 years from now, you will find some plausible data that the catholics in Austria were actually pro nazis. Anyway, good luck. The next two months perhaps will be tragic comedic for everyone in Europe; in US the things are already lost.
I like painters
why these videos are so chaotic? This undermines your intellectual work.
I've got a question about the Woergl Experiment. When was the tax on the scrip paid, upon issuance, or upon use?
Ford also built factories in the Soviet Union during the 30s, who of course, stole and implemented Fords famously efficient manufacturing processes in their own factories.
Meanwhile, the "German" way of manufacturing high quality individually fitted parts, aka German over engineering, made their manufacturing processes ridiculously time consuming and expensive.
The best way to imagine this is if your car could only use replacement parts, custom made at the factory for that specific car only. It's a logistical nightmare.
They stole their own factories lol? Did you know Mao claimed Henry Ford was the greatest Marxist of the 20th century?
The local currency worked as a tariff. You had to buy from your neighbor who had to buy from you (fellow resident of the city.) Their currency exempted them from the dismal economics practiced in the rest of the country.
What about the German MEFO which I understand was a fiat currency used in German industry.
The issute with making spending the most important thing in an economy is how we protect old and ill people who wont have money to live when they no longer can take part in spending and need others to look after them in their illness or old age. How do pension saving figure in your economic model??
They should be funded by the government and set at a level that allows retired workers to have a decent standard of living. One of the travesties of Neoliberalism has been privatising pensions, which benefits the rich and well paid over the poor and leaves poor people in penury in their old age.
What's more important is the material and social state we get in the future, rather than the abstract thing we use to count around them.
Money is fundamentally NOT a 'store' of 'value', it is a social token used in transaction between the past and the present. It is only a 'store' if a lot of other assumptions are held constant, which means the 'is-relationship' is not part of its fundamental nature.
It doesn't matter how much "money" there is saved if the resources are not there to be bought in the future.
@@ProfSteveKeen exactly what happens, resulting in demographic catasrophe, where the young crippled financially and can't afford to have children in a young age.
@@ProfSteveKeen agree that pensions should not be a profit centre. But we should still have money in our old age to allow the retired to decide how to live their post work life and not depend in a government giving us that lifestyle. If left to our governments you will be forced into a crappy care home of their choosing and have no say in it.
@@garrettosullivan8830 Agreed, But that should be personal savings on top of an already adequate public pension. I have no qualms about people saving for their retirement: what I object to is the situation we now have where the aged pension is about half what is needed to rent a one bedroom flat in Sydney. If you listen to my next podcast with Phil Dobbie, you'll hear that a relative of his has been made homeless by that--pension of about A$600 a week versus rent of $1000 a week--after a lifetime of being, as it happens, a nurse.
Good take on inflation and also Hitler's rise to power. Here is an idea I got from an interview on Kitco News some time ago. (Credit to Larry McDonald.) If the inflation rate is higher than the Fed rate, the deficit will be slowly defaulted away over time. Yes? No? Implications?
Can I admire the obvious intellect,but have a sense he's off in the weeds. I've listed to him a few times and wonder how people retire independently. Not everyone wants to pump their products forever.
The thing I disagree with is the title as the video deals with the economy after Hitler came to power (Top Commentator Remarks)
Clever people have asked this question. Others state if you don't learn from history. And in the month of remembrance America voted for fascism and racism. Americans will reap what they have sown
You misspelt Starmer mate
🙄
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He got rid of the people (and thus, their ideas) who were causing the depression during the Weimar Republic years. It was rather simple.
Silvio Gesell was brilliant. A luminary economist out of the Libcom camp. An early theorist pertaining to Market Socialism.
We need Robert Breedlove to respond to this
NO inflation!
The only economist I would bank on.
3-5% inflation as a target. This is insanity. We deserve everything that's coming for us.
01:34 therefore we have now Bitcoin OS ..
"unfortunately the fed is not maintaining that index anymore" lol...r we done...r we just in culture freefall now
What you describe is a necessary function of money. The self-balancing of savings and spending. When the value of the currency is rising, people save more, but only up to a point. When it gets strong enough, they spend it because they have more savings than they need. It is an automatic balancing act.
I almost think economist want boom and bust cycles and all the pain and suffering associated, because this makes themselves more relevant and important than they deserve to be.
I think more so, it benefits the rich. The rich are obviously the large holders of assets. The boom benefits them. And if you're aware of pump and dump schemes in the stock market, most rich people have their wealth professionally managed by family offices or portfolio investors. Many of these could colluded together to pump the price of stocks and then, when the retail investors get into it for some quick money, they all exit together. Causing the stock price to free fall. Now, this similar situation can be extrapolated to a longer term horizon of 4-5 years, where the professionals would keep pushing the entire stock market along with other assets higher. And when retailers get excited and buy enough from them at exorbitant prices, they will all disappear with 2x-3x returns, leading to a crash or a bust and a few years of bearish environment.
@@danlightened Yep. Everything is a scam, unless you have evidence to the contrary. This a wise starting position.
Ouh my market gods... What caused that first short "miracle" was rebuilding the infrastructure of Germany that created a lot of jobs and so purchasing power and so a short-term consumption boom because people needed to get back what they lost.
Creating an own currency was only done to delete all consumer debts that are thrown into the masses to try to increase consumption and so demand for labor for a little longer to cope with the natural end of the (monetary) market system: General Market Saturation. But consumer debt like other measures lead to inflation.
Then the mother of planned obsolescence was required again to destroy all the finished work and to rebuild everything afterwards which again creates jobs and so purchasing power and leads to consumption boom: War.
Hitler didn't rise into power and he didn't do anything, he was put in and made popular by using Public Relations Propaganda, exploiting peoples fears and hopes and social nature and so on.
At the beginning it sounded like he would tell how money is giving the opposite feedback of what is required for economizing, goods that are becoming scarce only increase prices which makes them even more scarce, in a real economy the feedback is that more goods must be produced.
But hey, "economists", those people who don't even know what the word "economizing" means and why we have to economize, those who believe that everything is happening in the vacuum of space, just two people agree, no conditions, no influencing factors, nothing, market gods swing their invisible hand and cause economical miracles with magical pricing and the "economists" look at their glass sphere and do their foreseeing.
Very interesting take and you're probably right, but who would you say put Hitler there? I mean, wasn't he a dictator?
The mother of all planned obsolescence: War.
^Gotta love this.
@@danlightened Probably the same truly secret society that all those conspiracy nonsense spreading libertarian influencers never mention, today known as the Mont Pelerin Society that is behind every "right-wing" fascist party and individual, the biggest lobby of capitalists with basically unlimited budget made up by the Austrian School of Economics. But this is just guessing and we will probably never find out, which is not that relevant but only that we learn about the system and abolish it asap.
@@danlightened Thank you for reading and your reply, I tried to answer you in different ways using different words but youtube is keeping deleting my comments, what really matters is that we learn from the past, especially about the system and replace it with a real socioeconomic system based on natural laws, science and engineering, a system that is truly about economizing and not about creating and exploiting scarcity artificially through property and the contract law to exploit it for power.
@@Wilson84KS Oh man, I didn't know RUclips did that too. It's common on Instagram tho. They find everything offensive these days. Maybe it has to do with you using the word Hitler?🤔
@@danlightened No, you used it too and your comment is still there, yt has a function for many years already that if a comment has been deleted every other comment that contains similar lines will be deleted as well, but I think by using gemini they developed this even further, it recognizes the same written in different words, I know yt and avoid triggers but it is not possible to know what is not acceptable for them, definitely a lot of protectionism for capitalism.
It seems like you are missing a point, what you spend the money and why you spend it is also important.
There is an alternative to get people spending other than inflation, specially when times are good, that is to make sure they don't have to save in case of emergency. Sure people spend a more money when there is inflation, but, given the examples you talk about here, that rate needs to be quite high.
I also lived in Japan where there is deflation, and I didn't know anyone who would not spend because of deflation, people saved to buy houses, and because of their culture. People don't spend to protect themselves from the future, if there is not fear for the future then they will spend happily, imagine the last time you went out for dinner... did you save money, or may be you treated yourself to an overpriced glass of wine?
Well.. that was a bit of a rant :) Interesting video
This argument has power IFF: the rise of Hilter were a function of collective rational self interest, but it was really a collective temper tantrum.
5:20, we look at a chart of the first derivative of financial pain. People integrate that rate @ProfSteveKeen. Everything in the universe integrates all the forces acting upon it. Stuff your clickbaity bullshit. Whatever comes next is guaranteed ripoff.
Loved reading the comments by some very knowledgeable people on here. But I'm a bit disappointed. I was expecting people to discuss about the impact of economic conditions on politics and visa versa.
Often, poor government policies and wars would lead to poor economic conditions. Which would cause civic unrest and some people will rise from these to usurp the present political system. It could be some good revolutionary or someone wild, like Hitler here.
There are other aspects that led to Hitlers rise.
- the people did mostly not believe in democracy and parliamentarism. The political landscape was much fractured in monarchists and nationalists on the right and communists and socialists on the left. - The extremists outside the democratic spectrum were fighting in the streets, there was much violence and political murders too. The right wings around Hitler were more organized and the communists on the left more anarchic what was a big argument for many.
- of course, the inflation of 1923 was a huge problem and raise doubts on the system but also the 1929 aftermath with huge unemployment - by the way much fired by the gold standard and following international recommendations about austerity as the gold bugs wanted.
- in the end Hitler and the right wingers won - he had a coalition with the former monarchists and also ultranationalist DNVP one year after the unemployment rates started to go down by the way.
- The nazis made women go back to kitchen and children, so the unemployment numbers were cut significantly. Same time they raise huge government projects in infrastructure and army mostly financed by US credits. The situation of the normal german did not improve but the feeling was better fired by state propaganda from nationalized media.
- the credits were so huge, germany would have been unable to pay the rates from app 1941 on. they elongated the period of abiltiy to operate by robbing from the jews and after they started the war they looted the occupied countries of course.
Why would deflation be more special than hyperinflation? Just because deflation was chronologically closer to hitler's election, does not mean that deflation had a greater weighting on the causation of his emergence. Deflation doesn't always cause unemployment, but high unemployment will always cause deflation because people don't have the money to afford the necessities at previous price levels, and businesses are encouraged to sell at a loss to feed themselves for the time being. The high unemployment was caused by the erosion of capital stock of domestic businesses due to decrease in domestic demand caused by reparations and flooding of foreign goods; embargo on german goods, decreasing foreign demand for the domestic goods. The lack of profit disallowed businesses to reinvest and maintain their production lines and employmentment levels. Japan has experienced deflation in 90s and they never experienced severe levels of unemployment. So saying that deflation was the superior antagonist to the hyperinflation is ehmm... you know... But what do I know, I'm just a dummy 🤪 .
I'm glad you admit you might not know it all. If you want to learn, start with Irving Fisher's classic paper on debt deflation: fraser.stlouisfed.org/files/docs/meltzer/fisdeb33.pdf. Japan didn't have the same fate because its deflation was much lower and its government spending level was far higher than the USA in the 1930s.
Temporary shots of monetary stimulus don’t lead to permanent prosperity You can’t print real wealth
Read the Nazi Party economic manifesto, ignore the race and war stuff , today it would be considered something to aim for
I think you are wrong about hyperinflation. It is not a massive destruction of resources. Hyperinflation has as little to do with normal inflation as a short squeeze has to do with normal stock price increases. You are right to talk about the French reparations, but like many economists you are focusing on the interior of the economy and ignoring the border between that economy and the world economy. The mechanism involves fixed need for foreign currency getting close to the total world need for local currency, which is obviously something very highly dependent on currency pricing.
Please notice the difference between fixed needs and marginal needs. Marginal needs are met by continuous currency price adjustments, whereas if a billionaire wants to buy a gallon of milk and the price is 100 dollars, he simply buys the milk and there is no marginal decrease caused by the higher prices. He is, by the nature of currency exchanges, committing more local export potential to that gallon of milk, though.
He said, hyperinflation is the consequence of a massive destruction of resources and the government papering over it.
The destruction of resources was the strike against the french an belgium troops, who tried to redirect steel and coal from Germany to France and Belgium.
Without coal and steel Germany did not have anything to sell, since this also affects the industries in Germany who all depend upon coal and steel.
So Germany had nothing to sell when Germany started to buy foreign currencies with printed Reichsmark. So it had to give more and more Reichsmark for foreign currencies, which increased the prices for foreign goods to the Germans.
So how much of your local currency is needed by the world depends upon how much you can sell. When your industries stopped producing because of workers striking or your resources being redirected out of your country, you have nothing to sell.
Same happens within the economy itself: you cannot buy, what is not produced.
He also had a lot of western backers to help pay and fund his political rise to power
It's all so contrived.
Did he just really recommend 3-5% inflation per year...seriously?
I can't say keen is an unlikable guy. I listen to him. But I'm a heathen. The idea that the only way to have a monetary system is to borrow it is incredibly low brow.
No. It is what money is all about. It is a bookkeeping system of debt. Only debt explains, how money does really work.
And debt does not origin from borrowing money from the bank. Here is the math:
I have no money at all and no debt. My balance:
debt + money = total
$-0 + $0 = $0
Now I borrow $100 from a bank and it puts $100 onto my bank account.
$-100 + $100 = $0
So still $0 which means no debt. Nothing did change by borrowing.
Now I spend $100:
$-100 + $0 = $-100
Now I am in debt after spending. And it does make sense. I bought something and only I got something while the seller only lost something. I owe to the seller to sell him something for the $100 he got from me. The mean of payment is nothing but an IOU, since we do not barter.
With barter, we do not have inflation. Everybody gets as much as he gives immediately. Our economic system and markets are based on debt and not barter. The economists got this completely wrong all the time.
Only with debt the seller has the problem of inflation: because he is paid with money, he has not been compensated for what he had given.
Is it possible Keen has ulterior motives? Perhaps his kind benefits from the current monetary system?
@@SteveNoverini no. Money always was debt. So he just wants to get rid of existing superstition about money.
If you understand money as a bookkeeping system of debt, the economy is far better to be understood.
And debt solves a real problem in the economy we do have all the time: that we must be able to buy in order to be able to sell.
Simple example: if you need a harvest to pay somebody who gives you the seed, without debt you will never have a harvest and therefore never a seed.
Same everywhere: production comes before you can sell the product.
@@ThomasVWorm unless I’m mistaken we were commenting on the current state of money. It is not backed by anything other than a specific groups rule over its implementation and their rule over our nation( and global trade).
Money being a representation of a specific amount of gold or silver is fine by me. It is a way to conveniently trade without having to carry around metals.
But that currency must be immediately able to be exchanged for the equal value of gold if its user demands from the currency issuer.
@@SteveNoverini the backing of money does not make any sense. This idea comes from economists, who never did have a clue, what money is all about.
Money is a bookkeeping system of debt and the mean of payment is just an IOU, which means, it represents what is missing and needed. Gold and silver are only very expensive placeholders for what you do not have but what you do need. And they require an additional economic effort, when you need more of it, because your population and economy is growing. This will lower your standard of living, because you could use the labour for something useful instead.
Money does not need to be backed by metals but by debtors who are able to create, what you want to buy from the money. If you get gold instead of food, you will die from starvation anyway.
The Germans liked the idea of a socialist technocracy
The Nazis killed the socialists and communists after they took power.
❤❤❤
Of course, this "a small amount of inflation is not a bad thing" is if you want to work in a modern capitalist system based on ever-increasing profits. If not, you don't need high spending or inflation. Also, before the Great Depression, inflation had averaged around 0% for centuries (going up in wartime/bad harvest, going down in peacetime/good harvest and not causing massive unemployment or the rise of fascists). Since then, inflation has risen every single year. "You need some inflation" is similar to the other capitalist idea "you need some unemployment" - they help to increase profits for the capitalist class.
Yes yes. The Fed itself keeps repeating that it won't cut rates till the unemployment is a certain percentage. Some enemployment ensures that the balance always tips in the favour of the capitalist class or the business owners. There's always a looming threat over the heads of the working class that you could be replaced easily because there are unemployed people willing to work harder and for a lesser wage than you.
Disappointingly amateur level of understanding presented with this historical topic, a misrepresentation even, click bait, with the real functional purpose being the draw in and setup for presentation of a general and controversial economic position. Go elsewhere for your history o viewer.
I’m not smart enough but it sounds like he’s talking about things that happen during stagflation. If so this is nothing new
Periods of hyperinflation are kept for longer in the common memory because:
- People that use money as a store of value get nuked, so they don't like that.
- People that have fixed incomes from wages or pensions will fall on hard times.
The thing with unemployment generated by deflation is that while hyperinflation affects everyone, unemployment affects only a percentage of the population.
So it's more convenient to create narratives based on hyperinflation than on deflation.
He was nothing like he is porteyed now.
German coal, Soviet , Iranian, Iraqi and then Saudi oil and n. gas followed by Chinese coal - burned and exported mountains, seas and atmospheres daily - is what's driven what we call today - Economy.
No chart worth watching unless intersecting with Energy resources, wars, social engineering, pandemic and 'financial crises' trends.
Steve Keen, the genuine voice highlighting the role of Entropy, since 2016 and earlier, should stick to the fundamentals - Energy;
"In any system of energy, Control is what consumes energy the most.
No energy store holds enough energy to extract an amount of energy equal to the total energy it stores.
No system of energy can deliver sum useful energy in excess of the total energy put into constructing it.
This universal truth applies to all systems.
Energy, like time, flows from past to future" (2017).
Hes talking Bitcoin. I shut off
FusionHemp model l8quidated. For fission products.acquisition.
This guy is a crank.
Depreciating money is like the spoilage limit from classical liberalism, or entropy from thermodynamics. So it kind of makes sense, except, why would we try to have an economy that requires us to work more? Surely, the purpose of progress is to work less?
I've always said that the purpose of progress is to work less and easier and have more leisure time. I mean fire, to cook meat that lasted longer than having to eat your game right then. Agriculture which increased food's shelf life for months, from days, providing more leisure time, allowing people to settle down, have civilizations and allow for language, arts and culture to flourish.
We don't need to go places to get our water, we don't have to go to a stadium to watch a match, we can just do it on the TV from across the world. Got planes that can traverse the globe in a couple of days and so on. And yet, compared to any time in our human history, I don't think we're working any less, or with lesser stress or less harder. Leisure time has probably only reduced. Most of our parents and grandparents came before sunset and spent the rest of the day with the family and friends. Now we're coming at nights after being stuck in the traffic for hours, eating some junk and crashing, just to rinse and repeat.
Couldn’t be any worse off with the business cycle….. stop all intervention and let the free market work
The free market doesn't always work. The fair market price for natural gas being piped into your house by whoever buried the lines is, "How much ya got?"
Steve tell us where is your 40 % are you an apprentice professor or you are mountain climber or maybe car salesman "WHAY I WAS WRONG " ???????
Because my interview with Kerry O'Brien in October 2008 led to O'Brien savaging a clearly rattled Kevin Rudd the next day on the bubble. A week later the Rudd government doubled to trebled the money given to first home buyers, which restarted the housing bubble. You can read about that here: www.macrobusiness.com.au/2016/02/how-steve-keen-got-the-housing-bust-wrong/ (where you will see that the Cabinet inserted the policy, and not the Treasury); and you can read my reaction to it when what I christened the First Home Vendors Grant was first announced: www.debtdeflation.com/blogs/2008/10/19/rescuing-the-economy-or-the-bubble/
PS Since then the government, Labor or Liberal, has kept the housing bubble alive, using the power of the State to create money as explained by MMT--even if they don't understand the mechanism. So I've given up on the bubble bursting until politics shifts enough that the voters--who will be disenfranchised young people who can never afford to buy a house--force the politicians to change. But I wouldn't expect that for another decade.
@@ProfSteveKeen Houses should not be seen as assets for generating wealth. The lack of accountability among politicians persists, as many young people are becoming disillusioned with society due to their lack of ownership over assets-or even autonomy over their own bodies. It seems we are on a path leading back to a form of modern-day feudalism.
bitcoin. only bitcoin. ❤
The problem is we are getting a two point punch right now, depreciation and no affordable housing inventory.
If it was just inflation, I think all Americans wouldn’t be treading water so hard
Keen's argument doesn't make sense. Deflation and full employment did not lead to Hitler's taking power since they happened from 1933 onward, after Hitler became chancellor. Those policies did make Hitler wildly popular with the Germans resulting in the suspension of elections altogether later in the thirties, but Hitler achieved in 1933.
Thanks for pointing out The Miracle Of Wörgl. After reading it it seems you've left out a significant part of the story.
Without knowing about these negative interest rate projects and the research involved, and without much of the reasonably required effort I came to something similar but also wildly different. I'm calling it taxmoney by lack of better word because I needed a word for it since it would exist in parallel to normal money (like the Wörgl script)
Taxmoney has an expiration date. After that date it is worthless.
All of the government spending is done in taxmoney, it is legal tender, one must accept it. (In the old days, in villages without money, helping someone or doing someone a favor would usually be rewarded with some goods. These were more often than not goods you didn't really want but since they had some value you would accept them, here 5 boxes of onions for you! eh...)
The taxmoney, as the name would suggest is to be used to pay taxes. You can use conventional currency to pay taxes by buying taxmoney at market rates where taxmoney near expiration is less valuable.
Government spending must somewhat sensibly line up with tax revenue. If the government spends to much the market value of the taxmoney will decline and those doing business with the government (or employed by) would have to adjust their rates.
If taxmoney is more scarce it gets harder to obtain enough of it to pay your taxes and its markt value may increase accordingly. This should invite speculation so that wealthy individuals can earn but also lose depending on government spending which in turn depends on national tax revenue.
Taxmoney may be issued with different expiration dates depending on the type of spending. If you live on social support you may get various kinds of taxmoney. Say 200 that lasts for 5 years, 400 that expires in 6 months and 800 in 2 months.
Too many people on the government payroll, on social support and to much subsidies and the market value will decline [faster].
The speculation can be automated so that buying groceries automatically exchanges some taxmoney for conventional money or conventional for taxmoney by automated auction. You may get better rates by keeping some in your account. Expiration date and the desired amount can be configured in the automated auction.
Manually you may find favorable rates for taxmoney that expires the very next day. If say VAT is 20% you would have to spend the other 80% worth of conventional currency. If you can get 200 worth of taxmoney for 50 you may feel encouraged to spend 800 worth of normal currency - today!
Prof Keen is one of the most insufferable grifters and self promoters in economics. He continually make claims that only he understand basic things that all credible economists do indeed understand. He continually mischaracterizes mainstream economics as "neoclassical" when the neoclassical school hasn't had the ear of policy makers for decades. He actually therefore derides Keynesianism while being an uber Keynesian himself. Although he does toss in some extra stupid from MMT. Oh, and let's not forget to pander to popular quasi-religious nonsense like global warming extremism. That special stupid having been wrong for 40+ years and counting, on 100% of its hysterical claims.
I honestly didn't think it would be Israel that ended up being an echo of that era of history. But people are starving in their camps right now.
then you don't know who created ww1 and ww2 so they could create I S R AY L
IT WAS THE ECONOMY, STUPID