More debate about who predicted the Great Recession, and lessons learned

Summary:  The comments on the FM website often have Socratic dialogues, clashing views in the search of truth. Yesterday we had one at the intersection of several of our long-standing themes: debt, deflation, economic theory, making forecasts, and the credibility of experts. Participating was the distinguished economist Steve Keen, discussing if he "predicted" the Great … Continue reading More debate about who predicted the Great Recession, and lessons learned

All about deflation, the quiet killer of modern economies

Summary:  An oddity of the great recession is our obsession with the threat of inflation while debt deflation ravages the economy.   Asset prices fall, causing loan defaults and bankruptcies -- while many guru's warn of hyperinflation.  This is one aspect of the great forgetting, how we've forgotten so much knowledge of economics painfully gained during … Continue reading All about deflation, the quiet killer of modern economies

A situation report about the global economy, as the flames break thru the firewalls

Summary:  The global economy continues to fall towards debt deflation (see here), rare and never cured (WWII was not a "cure".)   This is a brief look at current dynamics, and the short and medium term futures.    At over 2000 words, it is already too long; supporting logic and evidence must await later posts. This is … Continue reading A situation report about the global economy, as the flames break thru the firewalls

The Coming Global Stag-Deflation (Stagnation/Recession plus Deflation)

"The Coming Global Stag-Deflation (Stagnation/Recession plus Deflation)", Nouriel Roubini, RGE Monitor, 25 October 2008 -- A more optimistic forecast than my own, but an A-team economist.  Reposted in full with permission. His conclusion In conclusion, a sharp slack in goods, labor and commodity markets will lead to global deflationary trends over the next year. And … Continue reading The Coming Global Stag-Deflation (Stagnation/Recession plus Deflation)

Debt – the core problem of this financial crisis, which also explains how we got in this mess

Summary:  we have a bad case of debt deflation.  Although well-described by economists since the 1930's, this malady was not taken seriously by the mainstream of the profession.  Now we have it.  This post describes this macroeconomic illness (which will help you better understand events), and possible cures.  The diagnosis is simple; the cures less so. … Continue reading Debt – the core problem of this financial crisis, which also explains how we got in this mess