aus property bubble: max keiser - steven keen, page-25

  1. 398 Posts.
    "he is 100% correct on the way our economy functions."

    No he isn't, his central thesis is in fact completely the opposite of how our economy functions.

    His idea centers around the idea that our financial system currently functions with negative financial assets. He believes that the banking system creates debt in excess of the money holdings in the country.

    This however, in the real world is impossible. The banking system cannot create new financial assets, only our treasury can through deficit spending. Within the Banking system all transactions net to zero, loans create deposits of an equal value = no new financial assets.

    Simply, if you want people to take these Keiser/Keen interviews seriously you must first prove to the world that the argument is legitimate.

    How does the banking system create new financial assets? Prove this and the whole world will start listening.
 
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