ECONOMIC COLLAPSE: Why Ray Dalio Is Wrong | Steve Keen
Summary
Ray Dalio's Prediction: Ray Dalio predicts an economic "heart attack" in three years due to government debt, but Professor Steve Keen argues this is based on a misunderstanding of how government spending and credit creation work.
Economic Misconceptions: Keen criticizes mainstream economic theories, particularly the loanable funds model, and emphasizes the role of banks in money creation, which he believes Dalio partially understands.
Government Debt and Credit: Keen explains that government spending creates money rather than borrowing it, debunking the idea that government debt leads to economic catastrophe.
Tariffs and Global Trade: Keen views Trump's tariff policies as chaotic, potentially beneficial for self-reliance but overall damaging to international trade and economic stability.
Federal Reserve and Interest Rates: Keen criticizes the Federal Reserve's reliance on interest rates for economic control, suggesting Trump's focus on reducing rates is correct but his methods are destructive.
Investment vs. Speculation: Keen distinguishes between speculation and investment, suggesting that current market conditions favor speculative assets like gold and Bitcoin due to increased fiat money creation.
Market Volatility: Keen notes the current low volatility as a potential precursor to economic instability, drawing parallels to historical financial crises.
Transcript
Ray Dalia recently said that we're three years away from an economic heart attack. What does he mean by that? And how dangerous is his prediction? Is he right about it or what is he missing? Also, mainstream media is barely covering what is happening underneath the surface and I'm not sure mainstream media understands what is happening underneath the surface. I've invited a fantastic guest, Professor Steve Keen, back on the program. He was with us in early March. We've got raving reviews on his uh on his commentary here on the channel. we had to get him back to understand what is happening right now. We're looking at the start of a new rate cut cycle. Tariffs are still not off the table. US China, for example, still in the middle apparently of debating uh what that is going to look like. So, we have lots of current currents that we need to navigate. And I really appreciate you tuning in. And with that said, hey, my name is Kai Hoffen. I'm the JR mining guy over on X and of course your host. And I'm really looking forward to this now with Professor Steve Keen. Hit that like and subscribe button. helps us out tremendously and uh we much much appreciate it. Now with that said, let me switch over to Steve. Thank you so much for joining us again. It's good to see you again. >> Yeah, you know, it's nice to be invited back. >> Yeah, we we only spoke or we we spoke in early March and so much has happened and uh Ray Dalio recently came out with his prediction of we are going to have an economic heart attack in 3 years time. So quite a bit of urgency behind it. um help us to understand what does he mean by that and what is he referring to? >> Well, first of all, he's wrong. Okay, let's get that out straight away. Uh he's right about credit, he's wrong about government money and and and this seems to be a he's different to the mainstream and the mainstream is wrong about private credit and wrong about government money. Ray is only wrong about one of the two. So, what he's actually predicting is a debt crisis because of the government spending more than it takes back in taxation. and he doesn't I I think he has some appreciation of this. I've been reading his uh the big the big debt cycle book just recently to see uh what his thinking is and his main innovation compared to the mainstream is he regards credit as part of aggregate demand. Now, strangely enough, I immediately thought that me that meant that he understood that private banks create money when they lend uh loans create deposits. And I found in fact that he's still working effectively in a neocclassical framework which is known as loanable funds where banks are pretend pretended not I won't say assumed it's it's too fine a word to say that they assume economists pretend that banks don't actually create money and don't actually lend. They are intermediaries that enable savers which they call the ultimate uh lenders to lend to to other non-bankers which they call the ultimate borrowers. That's quoting Ben Bernani from his Nobel Prize speech in 2022. Um so Rey is still sitting in that world and therefore uh when the government spends more than it takes taxation, it has to borrow money from somebody another uh private sector sector like for example the household sector. And because it borrows money from the households, there's less money available for firms or the interest rate rises and that ultimately leads to a catastrophe. And I can actually model that quite effectively in my Ravel software. I set up the conventional model. Banks are just intermediaries. Now Ry Ray, so Ray's halfright. He understands credit to some extent uh which the mainstream does not. But he thinks credit is things like peopleending longer repayment terms when there's a boom on. So they you know rather than waiting for pay payment in 14 days they accept it in 28. Well that effectively is credit meaning you're still paying on credit but you you have a high level of demand. When you when you see that banks create money by lending out uh by by loans making loans that is a solid foundation for the more ethereal view of credit that Ry has. And then when you see that governments actually create money when they spend more than they take back in taxation. They don't borrow, they create money. That also means the heart attack that that uh Rey is anticipating is based on an incorrect diagnosis of the structure of the circulatory system. So his fear of a crisis is wrong, but it's a fear he shares with all other commentators where he's right and he could even be more right if he looked at how banks create money is by focusing on the role of credit the economy. Let's dissect here, Steve, of course, but one thing that just maybe one of the last sentences you just mentioned, you you say his fear is wrong. So, what you're saying is like his fear is misplaced or is it or should he be more optimistic? I mean, warning about an economic heart attack uh doesn't mean >> Yeah. So, but but you still fear economic collapse, right? >> Yeah. >> Yeah. >> Sorry, there's a bit of a lag. >> No. uh he fears economic collapse for the wrong reasons. Okay. Uh and and and the mainstream does as well. You ask any of the mainstream commentators, you know, they're saying government debts too high, interest payments are a burden on future generations, uh etc., etc. Elon Musk came up with the same stuff when he was, you know, friendly with Trump rather than uh becoming enemies as they seem to be now. It's a standard belief that the government when it spends more than it takes back in taxation has to borrow the money from the private sector. And therefore it the way that conventional textbooks teach this is they say that the government either increases the demand for loanable funds or reduces the supply of loanable funds and therefore drives up interest rates and reduces investment. This is what you learn from any economics textbook and it's basically brainwashing by people who don't understand the monetary system. Economists use intersecting supply and demand curves to, you know, and model everything. So they use supply and demand curves to model the banking sector. I haven't seen a bank manager yet decide to make a loan by moving lines on a piece of paper. What they do instead is they decide whether somebody's creditw worthy and they then if they believe that whatever the person is doing is going to make a profit uh or be able to refinance the loan, they give them the loan, which is a a liability for the borrower, an asset for the bank. They put the money into the bank account that they have with the with the firms. That's an asset for the borrower, a liability for the bank. The loans create deposits and and that enables the economy to expand. Now, that's getting the credit side right. Now, Ray is halfway there because he he sees creditors playing a role. Whereas in the neocclassical thinking, credit transfer spending power from households to firms and government, it doesn't create an additional money. In the real world, it does. So, Ray's correct on that point. his structural error is to have the loanable funds model in his head as well for what the government does. So therefore, if the government spends more than it takes back on taxation, it has to borrow uh money to cover the gap uh and it then has to issue bonds on for the interests on that debt as well. And that gives you an exponentially exploding level of government debt to GDP which will lead to catastrophe in that model. And I' I've literally modeled that in my Ravvel software. But if you change it to say well it's uh with the changes you have to make to go from the fictional model that's taught by textbooks to the real world model is say that first of all the debt of households and the debt of firms is not an asset of the household sector. It's an asset of the banks and secondly the government doesn't mainly bank at the banks. It mainly banks at the central bank. When you make those changes, what turns into catastrophe in the in the model the textbooks teach is just a normal situation where the government spending is creating money. So is the private sector creation of credit. And as you increase the debt level, you're also increasing GDP out of the turnover of money and new investments and infrastructure you enable by that by that creation of money and you get a stabilized debt level. You do not have a crisis. So, his diagnosis, which is the same diagnosis you'll get from virtually every other mainstream commentator, is wrong. >> Strong words and I like it. I I love that. Debunking mainstream theories here in in particular. Um, and we're really trying to understand like the credit cycle as well, like how does it interact? How does it work? And it's a complex topic because I I still think people don't understand what credit actually means. And I think that's sort of what you've been trying to explain at the beginning as well, right? >> Yeah. Like I've had that discussion with economist. >> Oh yeah. Yeah. So people don't understand credit and this is the fault of mainstream economists because if you look at how what mainstream economic it's a religion as soon as people get that through their heads and stop thinking it's a science where we actually understand what the hell's going on. So the mainstream economics evolved between the 1820s and the 1870s fundamentally. and it had a BA model of the economy in which money was basically a veil over Ba. Lift the veil, you can see what's actually going on. That's what they still teach in their textbooks. Now, that's not true. Money is not a veil, it's a lubricant. Uh a veil conceals, a lubricant enables. And and and that is the real world. And you can now model that using my particularly using my Ravevel software, which is the only program on the planet which lets you take a look at financial flows using integrated double entry bookkeeping tables that I call godly tables. Now when you put that structure together you see that money does matter. Money is significant. So in the mainstream thinking and this is going to be a bit heavy for people. You can read it in my new book. I wrote a book called uh money and macroeconomics and first principles for Elon Musk and other engineers and that's now available on Amazon. So if you want to see in detail what I'm arguing here verbally you can have a read of that book. But in it I show that if you have the the standard argument that that banks are intermediaries then credit does cancel out. If you have a like a if you lend money to somebody else, you can't spend that money yourself. Okay? So you transfer spending power, you don't create any additional spending power out of that. Your your extension of credit to somebody else reduces what you can spend. So credit has no effect on the macroeconomy in the conventional way of thinking. When banks are intermediaries, when banks originate rather than they originate money and debt, my model I call it bombed which stands for bank originated money and debt. It's a bit more meaningful than indogenous money which is the argument that the term used in the academic literature. But in a bombed system uh the government the the the the private banks lend the money that somebody else spends. They create an additional asset for themselves that creates a liability on the on the banking on the deposit side of the bank's ledger and that is what the people then use to buy goods and services. So if you extend credit in the real world, credit be becomes part of aggregate demand and aggregate income. And Rey is correct about that in general, but he doesn't understand the mechanism by private banks create money. >> Appreciate that. A really really intense uh conversation. I much appreciate that. And uh let's take it to 2025 level here as well cuz let's throw in the tariff debate as well cuz uh an argument could be made that private credit and the private credit market might be uh you know triggered to to implode here based on that because just uh the embargos and just uncertainty in general that will come to a screeching halt here. Is that an argument you could sort of underwrite as well or how how would you rate tariffs in that context? Yeah, I mean on the tariff I mean what what Trump is doing is just disastrous. Uh it it's it's you know I think you'd be better off putting a bull in charge of economic policy. At least it'll only break the China. It won't smash the walls as well. What Trump is doing is chaotic for any e economy caught up in this. And the simple solution for most economies, most companies is say let's keep out of the international arena and and keep domestically and let's forget about America as a market. Let's look elsewhere. And that seems to be a large part of what China is doing as well. Uh it's it's encouraging uh a trend toward Turkey. Now, I don't think that's a bad thing, frankly, because I think if you're not self-sufficient in the coming years with what global warming is going to do, and if you're a global warming skeptic, I don't give a You're wrong on. But global warming is going to scream everything. If you don't have domestic production capabilities, you're going to be in serious trouble. Domestic or regional production capabilities. So tariffs, what Trump is doing with tariffs may actually benefit some countries to make them more self-reliant and that will give them more of a chance of surviving what's coming uh down the tube very soon with global warming damaging productive capabilities, particularly agriculture. Uh but but over overall it's it's just such chaos. You wouldn't be making investment decisions that are dependent upon continued access to markets that you are not part of already. you you look more like look domestic than you are international. So it's absolute chaos. I mean travel I'd hate to be in the travel business right now because I'm not the only person who's living outside America saying I'm not going to America for four years. Uh so the the tourism market must be collapsing inside America right now. Uh that's going to be hitting hotels obviously airlines. You're going to see lots of specific uh downturns courtesy of all this tariff madness. uh whether it'll encourage firms to bring their production back on shore. Uh I think they'll be looking at this and just hoping that they can't wait for the next three years to be over. That of course presume America remains a democracy. >> Yeah, that uh that we'll still figure that one out and what it looks like because uh a lot of >> I should have used the word becomes more accurate than remains. >> Yeah. No, good good good point. Um trying to like tie a lot of threads together here, Stephen. That's why I'm uh like stuck here a little bit. We need to throw in uh the Fed discussions that are happening right now as well. Trump aggressively replacing Fed governors for cause to a degree. Um still the jury is still out of course whether the firing of Lisa Cook was uh appropriate or the right action. We we'll find that out apparently in the next few months here. But uh how does that change what what you're looking at your models the economic forecasts? Ray Dal you mentioned 3 years till the economic heart attack. Um, is that sort of pushing out the deadlines? Is it bringing it closer? What What should we sort of >> It's a deadline. It's a deadline. It doesn't exist. Okay, that is just based on misunderstanding the structure. There's no problem with the government running up uh government debt so long as it doesn't leak into demand for imports. Now, the problem with America, because it does leak into demand for imports, and this is a consequence of America being the reserve currency, it's overvalued the American dollar. It's made the American financial system much much more powerful than it would be otherwise, which is a bad thing for the rest of the world. Pretty good for the the vampire squids, but not good for the rest of the world. But it also means American manufacturing can't compete. So a large part of why you've had a decline in manufacturing in America and the growth of manufacturing in China is because being a reserve currency is basically a death warrant. It's it's a death warrant for your manufacturing sector over time. We've seen that with England with the when they used to have the empire in which the sun never sets. Then the Americans made the mistake of insisting for the same thing after World War II. So consequently, the American manufacturing is suffering the same way British manufacturing did in the final decades of the Raj. It declines because it's now undercut by cheap arrivals from overseas. and and you've got a you got it on steroids because there's never been a country like China before undermining overcoming the competitive advantage that America had and leaving them in the dust in terms of industrial development and technological advances and so on. So the main danger is the trade deficit. Now, in that sense, what Trump is doing, even though it's crazy, is focusing upon what I see as the problem, which is because America is the reserve currency, it necessarily runs a trade deficit that undermines its manufacturing sector, which is weakening the strength of the economy over time. So, he's attacking the right symptom, but with the wrong the wrong so-called cure, and that cure is just going to mangle markets like crazy. I said it's it's a bull in a china shop, but is also trying to knock the walls down. That that's the thing like context like US dollar has been weakening uh consider considerably like it's been a big move since the beginning of the year 114 in the Dixie now down to 98. Uh strong move down. Um will that trend continue? And I think as as you hinted at some of it is politically motivated. They do want a weaker dollar. The question now is timing. Did they want it that early or were they waiting for it to be hap or to happen maybe later in the in the um during the Trump term here? um maybe after the midterm elections here, but uh the the p the policy approach we need to dissect and really put into context because the urgency of replacing and changing the Fed policy is is staggering. Like the urgency behind it, it seems like what what's the motivation here and it almost seems like a rhetorical question. >> I don't know. I mean, there may be some debts there may be some debts that Trump is trying to get reduced in scale. I really have no idea. Um it it's it's it's brutal. It's it's it's you know, I'm not going to mince any words here. This is how fascists behave. Um, so you've got just overriding just writing rough shot over rules that nobody else would break. He's because he's got the power was given to him by the American Constitution. Your constitution basically makes your president the king. Nobody's ever used those powers to the full extent that Trump is doing right now. So you're copying the full extent of not having a genuine democracy in your political system. You have a political circus designed to entertain uh rather rather than lead. And you've got a clown Allen. I I just see total disaster coming out of out of all of this. Uh but he in this sense he's got his finger on the pulse correctly because one reason he got elected was he appealed to all the workingclass people who'd lost their jobs in manufacturing and now find themselves working as security people as target or you know menial relatively menial lowskilled jobs. They're they're the resentment the fact that it got Trump into the White House. uh but what he's doing uh may actually end up making those situations even more precarious. >> Yeah, we really trying to understand like the impact now also of the Fed rate cut cycle if that really kicks off here in September in about 3 weeks time. >> Well, I mean >> messaging beh the Fed this this is a case where again Trump's got the got the he his perception of what's wrong in the system is actually going to be fairly accurate. Okay. But his cures, you know, he's he's likely got somebody who's an idiot soant in detecting what your illnesses are and he's got a couple of bludgeons he decides to cooperate every every disease you have with at the same time. Uh but he's picked up on the resentment the working class had which led to his victory. He's also picked up that the Federal Reserve doesn't know what it's doing with interest rates. So if you look at why the Federal Reserve thinks that they can fine-tune the economy using interest rates, it's not based on any economic uh analysis, any economic diagnosis. It's based on a set of economic theories that basically presume it economic theories have got the same validity as your child's belief in their imaginary friend at the bottom of the garden. So they they have a model in which people can accurately predict the future. When an economist tells you we assume you have rational expectations, what they mean is we assume you know the model you're in and you can predict the impact of any policy changes to it. So you can basically predict the future. That's what they call rational. Well, good buy the word rational. It's actually prophecy is what they think we're capable of. Now in that world they say what causes inflation is inflationary expectations. So if people think prices are going to rise, prices will rise. If we put interest rates up according to their model you might call an oiler uh equation which is an insult to a great mathematician uh that ar that model argues that putting up interest rates reduces inflationary expectations and therefore causes the rate of inflation to fall. It's a fairy model. It's not the real world. You can't use interest rates as a as a fine-tuning mechanism for the the economy. You're better off using fiscal policy for that which at the same time they're trying to shut down. So Trump has picked up that they don't know what the hell they're doing. Uh but his way of attacking it is literally attacking the institution. And you do need a you need you need a clearing house for private banks. You do need something like the Federal Reserve. The problem is that it's staffed by neocclassical economists who basically believe in fairies at the bottom of the garden. They they FM FF FBTG models is a better title than DSGSGA dynamic stoastic general equilibrium models which they which encode their vision of the world. But they don't what they're doing. So Trump is actually, you know, targeting them effectively on that front. Uh if he manages to reduce interest rates, it will pro probably still stimulate the economy a bit. uh it's going to stop a lot of bankruptcies which would otherwise happen. So again, what he's trying to do is sensible. The way he's going about it is catastrophic in terms of destroying essential institutions in the American system. >> You you've been saying like it might stop in insolvencies and maybe smaller business going bankrupt, but the question is now like how severe do the rate cuts need to be to actually have an impact? I was discussing with a friend earlier. He runs a M&A consultancy here in Germany and we we both agreed that 25 basis points meaningless, right? Drop in the bucket. Um what is significant? What will have an impact? Yeah. >> Well, see actually it's probably more important what it does to the value of bonds and the price of price of money because one reason Silicon Valley folded was because you we've had 20 something 40 years of falling interest rates. Now when interest rates fall, of course, bond prices rise. So if you have banks and and non-bank financial institutions that have bought government bonds, they're actually seeing the capital value of those bonds rising because of falling interest rates. Then when the Fed reversed it with a stupid policy that they tried to try to control the rate of inflation, what they're actually doing was reducing the value of of the bond assets that banks and non-bank financial institutions hold. Now, if if if you have long-term bonds, of course, the the small interest rate change has a huge impact upon the value of long-term bonds. If you go to the ultimate level of consoles where the bonds are per exist in perpetuity, then if you increase interest rates by a factor of five, you reduce the value of bonds by a factor of five as well. Now, 30-year bonds are the normal ones we look at. It's not quite that dramatic, but going from interest rates of 1% for bonds to 5% for bonds probably cut the value of the bonds held by the banks and non-bank financial institutions, existing bonds by 50 60%. Now, the only reason the financial system hasn't collapsed as a result of that is we have the fiction of what they call hold to maturity bonds rather than mark tomarket bonds. If you mark to market, you would be forced to reduce the value stated value of your assets. your bond assets by 50 60% you'd fault you'd be bankrupt. So instead what banks do is they they pretend that they're going to hold those bonds to maturity. So they have what they call mark to maturity so they don't change the face value of the bonds stated the recorded value of the bonds when interest rates rise. Now the Silicon Valley Bank had too many long-term bonds didn't wasn't able to use that trick and folded but I think most of the financial system is a very fragile state right now. So if you did have that fall in interest rates, you would actually increase the value of bonds that are held by banks and NBFIs and reduce the fragility of the financial system. So again, Trump's trying to do the right thing for the wrong reasons. Sound sounds familiar like I've I've heard that before. So um very interesting like question now. Readalio suggested for example gold as an hedge against what might be coming. Um what what should investors do right now Steve? Like when you look at this, I know it sounds ultra complex discussing here. >> Yeah. You're not investors, you're speculators. You're gambling on asset prices and investors build things. Okay. I want to make that distinction very clear. I'm sick and tired of people who speculate on shares calling themselves investors, you're speculators. Uh if you want to speculate, then you buy an asset which uh is, you know, has some probability of rising compared to uh fiat money, which gold obviously fits that barrel right now and so does Bitcoin. But if you take a look at the twists and turns and the value of of particularly Bitcoin, this is where the work of applied MMT is extremely important. And I think we should get Tyrone Canes or Doug from Applied MMT on here at some point as well. What they show is the major demand for Bitcoin and gold comes from when the government runs a large deficit because the deficit creates money and that then gives people money they can then buy non-financial assets with which is what Bitcoin and gold actually are. Um, so it's it's feasible that with the combination of craziness that's going on right now, you're going to have lots of fiat money creation, which is likely to be bullish for for Bitcoin and gold, but it's not uh that they're investing. You're just gambling on something which will rise when everything else fail falls. >> I I get that. Like we often hear that in in the junior mining space as well, speculators versus investors. Speculators are there just for the hot money. The question now is like the gold move for example and we can maybe debate that we have a few minutes to debate in detail like how much of that is systematically driven versus maybe speculation and investing like is it just really betting um just just riding the hot hand because it is on Vulcan as you said there's so much money liquidity M2 money supply is at a at a peak here or is there how much safe haven investing is that as well because we got the geopolitical crisis um you can we can believe that the monetary system might be failing some of the guests have argued for that as Well, um, so I'm trying to dissect that whether it's just purely speculation. Bitcoin bit different perhaps, bit hotter, but gold I would throw maybe into a different bucket here. I'm curious if you agree. >> Yeah, I mean it's this this is one of the points that Kane's made which people have never really properly absorbed and he says that our desire for money uh and speculative assets like Bitcoin and gold is an index of our disquitude about our own forecast of the future. Okay. So when you feel bloody uncertain about the future, you're worried, you're scared, you're going to go into something which you think is going to increase in value and then but to do that you've got to have the money being created and the you know the intention is is one thing actually having the cash to go and buy the assets is another story entirely. Now that cash is created in three ways. One is by running a trade surplus so you can rule it out for America. Uh the repatriated profits are part of it what you can do it with. Another is the government spending more than it takes back in taxation, running a deficit. Uh we know that Trump's going to do on a big scale because he's creating money for his fellow rich mates uh with tax cuts and cutting back on spending for the poor. So there's likely be more fiat money created out of that. The big question mark is what's going to happen with the credit market. And my feeling is uh the level of uncertainty is so great that people aren't going to be willing to particularly take on a lot of debt for things like mortgages and so on. Certainly not for real investment. But if you look at the level of margin debt right now, it's back to historic highs. The highs that have only been seen previously uh during the 87 bubble, the 2007 and back in the 1920s, uh when margin debt, people probably aren't aware of this, margin debt at the peak of the 1929 bubble reached 9% of GDP with a 10-fold leverage factor in margin debts at the time. So that sort of credit is likely to cause the asset markets to continue rising. But at the same time, you're going to have lots of fragility in the system courtesy of, you know, Trump's policies also undermining the entertainment sector, for example. >> Maybe just one last topic because you mentioned fragility and sort of um volatility, which I'm taking out of that as well. But the VIX is at 15. It's pretty much dead, for lack of a better term, if you were to use it as a heartbeat monitor, for example. Um what do you make of that? Why are investors But that's it's often the the lull before the storm is how I define describe this when I first modeled financial instability back in a paper published in 1995. I wrote in 1992 uh called modeling Minsk's financial instability hypothesis and that generated a period much to my surprise it wasn't something I programmed into the model. It generated a period of falling volatility before a crisis hit. Uh it's actually what's called an emerging property of a complex system. And but what I got the shock of my life when I started seeing the real data reproducing my model uh which was what they called the great moderation. So on that front I expect a period of falling volatility and general uh people having relaxed expectations to precede a crisis. >> It feels like we're in the eye of a hurricane right now. Um so I'm curious when when >> Yeah, that's not a bad that's a good way of putting it. Yeah. >> Right. So, I'm really curious when Duda will hit the fan and the winds will pick up again. So, we're really curious, Steve. Like, I could chat with you for hours. Like, there's so many topics we we could still touch on. We haven't even talked about productivity increases and boosts to productivity from various angles, whether it being AI and techreated or from a climate perspective, which you touched on last time when we spoke. >> So, very very different angles that we can touch on next time. I'll have you back before 6 months are over. Uh, can't wait six months again to have you back. That's good. Um I I know we're showing you a link to the Patreon page down below, but where else can we send our audience? Uh how can we direct our viewers towards you? >> I have a Substack page as well, Sub Profsteve Keen at Sububstack.com. I'm also giving a sort of online courses these days. The marketing will seem weird, okay? It's a marketing company that does the generic form of marketing for me. But if you go to stevekenfree.com, you'll get into the marketing line there. and I give a set of are very detailed lectures uh with about 650 people have signed up so far and I take them through my approach to economics completely different to what you've been taught at university it I have to clean your brains out first of all before you can the approach that I take because what we've been taught in my opinion is like being learning toll maker astronomy at the time of rocket launches mainstream economics is a complete and absolute waste of time and you need to have that deprogrammed out of your head and I did that in detail through the online course that I run through the cool uh platform skainfree.com take a look at that and uh join my band of uh merry economic rebels. >> Fantastic. Yeah, you just gave me the idea of an e economic ayaska camp as well. So um just to get some clarity on what is going on. Maybe I'll host one next summer. >> I've tried the mushroom. Never again. I did that once. Did that once in Mexico. Never again. >> Okay. No, no, no great investment ideas came out of that or anything economic clarity. >> No, no, it was lots of trips to the toilet. >> Oh. Oh my goodness. All right. No, then I'll skip that. And I'm definitely not recommending it to anybody else. So, >> fantastic. Awesome. Steve, it was a great pleasure having you on the show. Really appreciate it. And everybody else, thanks so much for tuning into Sora Financially. Extremely complex but interesting conversation here with Professor Steve Keen. If you enjoyed our content, please leave a like, leave a comment down below, and if you haven't done so, hit that like and subscribe button. What do you think about Ray Dalio marching forward here, saying we we're nearing economic collapse in 3 years. Is he just sable rattling? Is he just fear-mongering? Or do you think there's more to it? Really curious to hear your opinion down below as well. I read all the comments, sometimes good, sometimes bad, but I want to hear from you. So, please put it down below, and we much much appreciate it. Thank you so much for tuning in. We'll be back with lots more. Take care out there. [Music]
ECONOMIC COLLAPSE: Why Ray Dalio Is Wrong | Steve Keen
Summary
Transcript
Ray Dalia recently said that we're three years away from an economic heart attack. What does he mean by that? And how dangerous is his prediction? Is he right about it or what is he missing? Also, mainstream media is barely covering what is happening underneath the surface and I'm not sure mainstream media understands what is happening underneath the surface. I've invited a fantastic guest, Professor Steve Keen, back on the program. He was with us in early March. We've got raving reviews on his uh on his commentary here on the channel. we had to get him back to understand what is happening right now. We're looking at the start of a new rate cut cycle. Tariffs are still not off the table. US China, for example, still in the middle apparently of debating uh what that is going to look like. So, we have lots of current currents that we need to navigate. And I really appreciate you tuning in. And with that said, hey, my name is Kai Hoffen. I'm the JR mining guy over on X and of course your host. And I'm really looking forward to this now with Professor Steve Keen. Hit that like and subscribe button. helps us out tremendously and uh we much much appreciate it. Now with that said, let me switch over to Steve. Thank you so much for joining us again. It's good to see you again. >> Yeah, you know, it's nice to be invited back. >> Yeah, we we only spoke or we we spoke in early March and so much has happened and uh Ray Dalio recently came out with his prediction of we are going to have an economic heart attack in 3 years time. So quite a bit of urgency behind it. um help us to understand what does he mean by that and what is he referring to? >> Well, first of all, he's wrong. Okay, let's get that out straight away. Uh he's right about credit, he's wrong about government money and and and this seems to be a he's different to the mainstream and the mainstream is wrong about private credit and wrong about government money. Ray is only wrong about one of the two. So, what he's actually predicting is a debt crisis because of the government spending more than it takes back in taxation. and he doesn't I I think he has some appreciation of this. I've been reading his uh the big the big debt cycle book just recently to see uh what his thinking is and his main innovation compared to the mainstream is he regards credit as part of aggregate demand. Now, strangely enough, I immediately thought that me that meant that he understood that private banks create money when they lend uh loans create deposits. And I found in fact that he's still working effectively in a neocclassical framework which is known as loanable funds where banks are pretend pretended not I won't say assumed it's it's too fine a word to say that they assume economists pretend that banks don't actually create money and don't actually lend. They are intermediaries that enable savers which they call the ultimate uh lenders to lend to to other non-bankers which they call the ultimate borrowers. That's quoting Ben Bernani from his Nobel Prize speech in 2022. Um so Rey is still sitting in that world and therefore uh when the government spends more than it takes taxation, it has to borrow money from somebody another uh private sector sector like for example the household sector. And because it borrows money from the households, there's less money available for firms or the interest rate rises and that ultimately leads to a catastrophe. And I can actually model that quite effectively in my Ravel software. I set up the conventional model. Banks are just intermediaries. Now Ry Ray, so Ray's halfright. He understands credit to some extent uh which the mainstream does not. But he thinks credit is things like peopleending longer repayment terms when there's a boom on. So they you know rather than waiting for pay payment in 14 days they accept it in 28. Well that effectively is credit meaning you're still paying on credit but you you have a high level of demand. When you when you see that banks create money by lending out uh by by loans making loans that is a solid foundation for the more ethereal view of credit that Ry has. And then when you see that governments actually create money when they spend more than they take back in taxation. They don't borrow, they create money. That also means the heart attack that that uh Rey is anticipating is based on an incorrect diagnosis of the structure of the circulatory system. So his fear of a crisis is wrong, but it's a fear he shares with all other commentators where he's right and he could even be more right if he looked at how banks create money is by focusing on the role of credit the economy. Let's dissect here, Steve, of course, but one thing that just maybe one of the last sentences you just mentioned, you you say his fear is wrong. So, what you're saying is like his fear is misplaced or is it or should he be more optimistic? I mean, warning about an economic heart attack uh doesn't mean >> Yeah. So, but but you still fear economic collapse, right? >> Yeah. >> Yeah. >> Sorry, there's a bit of a lag. >> No. uh he fears economic collapse for the wrong reasons. Okay. Uh and and and the mainstream does as well. You ask any of the mainstream commentators, you know, they're saying government debts too high, interest payments are a burden on future generations, uh etc., etc. Elon Musk came up with the same stuff when he was, you know, friendly with Trump rather than uh becoming enemies as they seem to be now. It's a standard belief that the government when it spends more than it takes back in taxation has to borrow the money from the private sector. And therefore it the way that conventional textbooks teach this is they say that the government either increases the demand for loanable funds or reduces the supply of loanable funds and therefore drives up interest rates and reduces investment. This is what you learn from any economics textbook and it's basically brainwashing by people who don't understand the monetary system. Economists use intersecting supply and demand curves to, you know, and model everything. So they use supply and demand curves to model the banking sector. I haven't seen a bank manager yet decide to make a loan by moving lines on a piece of paper. What they do instead is they decide whether somebody's creditw worthy and they then if they believe that whatever the person is doing is going to make a profit uh or be able to refinance the loan, they give them the loan, which is a a liability for the borrower, an asset for the bank. They put the money into the bank account that they have with the with the firms. That's an asset for the borrower, a liability for the bank. The loans create deposits and and that enables the economy to expand. Now, that's getting the credit side right. Now, Ray is halfway there because he he sees creditors playing a role. Whereas in the neocclassical thinking, credit transfer spending power from households to firms and government, it doesn't create an additional money. In the real world, it does. So, Ray's correct on that point. his structural error is to have the loanable funds model in his head as well for what the government does. So therefore, if the government spends more than it takes back on taxation, it has to borrow uh money to cover the gap uh and it then has to issue bonds on for the interests on that debt as well. And that gives you an exponentially exploding level of government debt to GDP which will lead to catastrophe in that model. And I' I've literally modeled that in my Ravvel software. But if you change it to say well it's uh with the changes you have to make to go from the fictional model that's taught by textbooks to the real world model is say that first of all the debt of households and the debt of firms is not an asset of the household sector. It's an asset of the banks and secondly the government doesn't mainly bank at the banks. It mainly banks at the central bank. When you make those changes, what turns into catastrophe in the in the model the textbooks teach is just a normal situation where the government spending is creating money. So is the private sector creation of credit. And as you increase the debt level, you're also increasing GDP out of the turnover of money and new investments and infrastructure you enable by that by that creation of money and you get a stabilized debt level. You do not have a crisis. So, his diagnosis, which is the same diagnosis you'll get from virtually every other mainstream commentator, is wrong. >> Strong words and I like it. I I love that. Debunking mainstream theories here in in particular. Um, and we're really trying to understand like the credit cycle as well, like how does it interact? How does it work? And it's a complex topic because I I still think people don't understand what credit actually means. And I think that's sort of what you've been trying to explain at the beginning as well, right? >> Yeah. Like I've had that discussion with economist. >> Oh yeah. Yeah. So people don't understand credit and this is the fault of mainstream economists because if you look at how what mainstream economic it's a religion as soon as people get that through their heads and stop thinking it's a science where we actually understand what the hell's going on. So the mainstream economics evolved between the 1820s and the 1870s fundamentally. and it had a BA model of the economy in which money was basically a veil over Ba. Lift the veil, you can see what's actually going on. That's what they still teach in their textbooks. Now, that's not true. Money is not a veil, it's a lubricant. Uh a veil conceals, a lubricant enables. And and and that is the real world. And you can now model that using my particularly using my Ravevel software, which is the only program on the planet which lets you take a look at financial flows using integrated double entry bookkeeping tables that I call godly tables. Now when you put that structure together you see that money does matter. Money is significant. So in the mainstream thinking and this is going to be a bit heavy for people. You can read it in my new book. I wrote a book called uh money and macroeconomics and first principles for Elon Musk and other engineers and that's now available on Amazon. So if you want to see in detail what I'm arguing here verbally you can have a read of that book. But in it I show that if you have the the standard argument that that banks are intermediaries then credit does cancel out. If you have a like a if you lend money to somebody else, you can't spend that money yourself. Okay? So you transfer spending power, you don't create any additional spending power out of that. Your your extension of credit to somebody else reduces what you can spend. So credit has no effect on the macroeconomy in the conventional way of thinking. When banks are intermediaries, when banks originate rather than they originate money and debt, my model I call it bombed which stands for bank originated money and debt. It's a bit more meaningful than indogenous money which is the argument that the term used in the academic literature. But in a bombed system uh the government the the the the private banks lend the money that somebody else spends. They create an additional asset for themselves that creates a liability on the on the banking on the deposit side of the bank's ledger and that is what the people then use to buy goods and services. So if you extend credit in the real world, credit be becomes part of aggregate demand and aggregate income. And Rey is correct about that in general, but he doesn't understand the mechanism by private banks create money. >> Appreciate that. A really really intense uh conversation. I much appreciate that. And uh let's take it to 2025 level here as well cuz let's throw in the tariff debate as well cuz uh an argument could be made that private credit and the private credit market might be uh you know triggered to to implode here based on that because just uh the embargos and just uncertainty in general that will come to a screeching halt here. Is that an argument you could sort of underwrite as well or how how would you rate tariffs in that context? Yeah, I mean on the tariff I mean what what Trump is doing is just disastrous. Uh it it's it's you know I think you'd be better off putting a bull in charge of economic policy. At least it'll only break the China. It won't smash the walls as well. What Trump is doing is chaotic for any e economy caught up in this. And the simple solution for most economies, most companies is say let's keep out of the international arena and and keep domestically and let's forget about America as a market. Let's look elsewhere. And that seems to be a large part of what China is doing as well. Uh it's it's encouraging uh a trend toward Turkey. Now, I don't think that's a bad thing, frankly, because I think if you're not self-sufficient in the coming years with what global warming is going to do, and if you're a global warming skeptic, I don't give a You're wrong on. But global warming is going to scream everything. If you don't have domestic production capabilities, you're going to be in serious trouble. Domestic or regional production capabilities. So tariffs, what Trump is doing with tariffs may actually benefit some countries to make them more self-reliant and that will give them more of a chance of surviving what's coming uh down the tube very soon with global warming damaging productive capabilities, particularly agriculture. Uh but but over overall it's it's just such chaos. You wouldn't be making investment decisions that are dependent upon continued access to markets that you are not part of already. you you look more like look domestic than you are international. So it's absolute chaos. I mean travel I'd hate to be in the travel business right now because I'm not the only person who's living outside America saying I'm not going to America for four years. Uh so the the tourism market must be collapsing inside America right now. Uh that's going to be hitting hotels obviously airlines. You're going to see lots of specific uh downturns courtesy of all this tariff madness. uh whether it'll encourage firms to bring their production back on shore. Uh I think they'll be looking at this and just hoping that they can't wait for the next three years to be over. That of course presume America remains a democracy. >> Yeah, that uh that we'll still figure that one out and what it looks like because uh a lot of >> I should have used the word becomes more accurate than remains. >> Yeah. No, good good good point. Um trying to like tie a lot of threads together here, Stephen. That's why I'm uh like stuck here a little bit. We need to throw in uh the Fed discussions that are happening right now as well. Trump aggressively replacing Fed governors for cause to a degree. Um still the jury is still out of course whether the firing of Lisa Cook was uh appropriate or the right action. We we'll find that out apparently in the next few months here. But uh how does that change what what you're looking at your models the economic forecasts? Ray Dal you mentioned 3 years till the economic heart attack. Um, is that sort of pushing out the deadlines? Is it bringing it closer? What What should we sort of >> It's a deadline. It's a deadline. It doesn't exist. Okay, that is just based on misunderstanding the structure. There's no problem with the government running up uh government debt so long as it doesn't leak into demand for imports. Now, the problem with America, because it does leak into demand for imports, and this is a consequence of America being the reserve currency, it's overvalued the American dollar. It's made the American financial system much much more powerful than it would be otherwise, which is a bad thing for the rest of the world. Pretty good for the the vampire squids, but not good for the rest of the world. But it also means American manufacturing can't compete. So a large part of why you've had a decline in manufacturing in America and the growth of manufacturing in China is because being a reserve currency is basically a death warrant. It's it's a death warrant for your manufacturing sector over time. We've seen that with England with the when they used to have the empire in which the sun never sets. Then the Americans made the mistake of insisting for the same thing after World War II. So consequently, the American manufacturing is suffering the same way British manufacturing did in the final decades of the Raj. It declines because it's now undercut by cheap arrivals from overseas. and and you've got a you got it on steroids because there's never been a country like China before undermining overcoming the competitive advantage that America had and leaving them in the dust in terms of industrial development and technological advances and so on. So the main danger is the trade deficit. Now, in that sense, what Trump is doing, even though it's crazy, is focusing upon what I see as the problem, which is because America is the reserve currency, it necessarily runs a trade deficit that undermines its manufacturing sector, which is weakening the strength of the economy over time. So, he's attacking the right symptom, but with the wrong the wrong so-called cure, and that cure is just going to mangle markets like crazy. I said it's it's a bull in a china shop, but is also trying to knock the walls down. That that's the thing like context like US dollar has been weakening uh consider considerably like it's been a big move since the beginning of the year 114 in the Dixie now down to 98. Uh strong move down. Um will that trend continue? And I think as as you hinted at some of it is politically motivated. They do want a weaker dollar. The question now is timing. Did they want it that early or were they waiting for it to be hap or to happen maybe later in the in the um during the Trump term here? um maybe after the midterm elections here, but uh the the p the policy approach we need to dissect and really put into context because the urgency of replacing and changing the Fed policy is is staggering. Like the urgency behind it, it seems like what what's the motivation here and it almost seems like a rhetorical question. >> I don't know. I mean, there may be some debts there may be some debts that Trump is trying to get reduced in scale. I really have no idea. Um it it's it's it's brutal. It's it's it's you know, I'm not going to mince any words here. This is how fascists behave. Um, so you've got just overriding just writing rough shot over rules that nobody else would break. He's because he's got the power was given to him by the American Constitution. Your constitution basically makes your president the king. Nobody's ever used those powers to the full extent that Trump is doing right now. So you're copying the full extent of not having a genuine democracy in your political system. You have a political circus designed to entertain uh rather rather than lead. And you've got a clown Allen. I I just see total disaster coming out of out of all of this. Uh but he in this sense he's got his finger on the pulse correctly because one reason he got elected was he appealed to all the workingclass people who'd lost their jobs in manufacturing and now find themselves working as security people as target or you know menial relatively menial lowskilled jobs. They're they're the resentment the fact that it got Trump into the White House. uh but what he's doing uh may actually end up making those situations even more precarious. >> Yeah, we really trying to understand like the impact now also of the Fed rate cut cycle if that really kicks off here in September in about 3 weeks time. >> Well, I mean >> messaging beh the Fed this this is a case where again Trump's got the got the he his perception of what's wrong in the system is actually going to be fairly accurate. Okay. But his cures, you know, he's he's likely got somebody who's an idiot soant in detecting what your illnesses are and he's got a couple of bludgeons he decides to cooperate every every disease you have with at the same time. Uh but he's picked up on the resentment the working class had which led to his victory. He's also picked up that the Federal Reserve doesn't know what it's doing with interest rates. So if you look at why the Federal Reserve thinks that they can fine-tune the economy using interest rates, it's not based on any economic uh analysis, any economic diagnosis. It's based on a set of economic theories that basically presume it economic theories have got the same validity as your child's belief in their imaginary friend at the bottom of the garden. So they they have a model in which people can accurately predict the future. When an economist tells you we assume you have rational expectations, what they mean is we assume you know the model you're in and you can predict the impact of any policy changes to it. So you can basically predict the future. That's what they call rational. Well, good buy the word rational. It's actually prophecy is what they think we're capable of. Now in that world they say what causes inflation is inflationary expectations. So if people think prices are going to rise, prices will rise. If we put interest rates up according to their model you might call an oiler uh equation which is an insult to a great mathematician uh that ar that model argues that putting up interest rates reduces inflationary expectations and therefore causes the rate of inflation to fall. It's a fairy model. It's not the real world. You can't use interest rates as a as a fine-tuning mechanism for the the economy. You're better off using fiscal policy for that which at the same time they're trying to shut down. So Trump has picked up that they don't know what the hell they're doing. Uh but his way of attacking it is literally attacking the institution. And you do need a you need you need a clearing house for private banks. You do need something like the Federal Reserve. The problem is that it's staffed by neocclassical economists who basically believe in fairies at the bottom of the garden. They they FM FF FBTG models is a better title than DSGSGA dynamic stoastic general equilibrium models which they which encode their vision of the world. But they don't what they're doing. So Trump is actually, you know, targeting them effectively on that front. Uh if he manages to reduce interest rates, it will pro probably still stimulate the economy a bit. uh it's going to stop a lot of bankruptcies which would otherwise happen. So again, what he's trying to do is sensible. The way he's going about it is catastrophic in terms of destroying essential institutions in the American system. >> You you've been saying like it might stop in insolvencies and maybe smaller business going bankrupt, but the question is now like how severe do the rate cuts need to be to actually have an impact? I was discussing with a friend earlier. He runs a M&A consultancy here in Germany and we we both agreed that 25 basis points meaningless, right? Drop in the bucket. Um what is significant? What will have an impact? Yeah. >> Well, see actually it's probably more important what it does to the value of bonds and the price of price of money because one reason Silicon Valley folded was because you we've had 20 something 40 years of falling interest rates. Now when interest rates fall, of course, bond prices rise. So if you have banks and and non-bank financial institutions that have bought government bonds, they're actually seeing the capital value of those bonds rising because of falling interest rates. Then when the Fed reversed it with a stupid policy that they tried to try to control the rate of inflation, what they're actually doing was reducing the value of of the bond assets that banks and non-bank financial institutions hold. Now, if if if you have long-term bonds, of course, the the small interest rate change has a huge impact upon the value of long-term bonds. If you go to the ultimate level of consoles where the bonds are per exist in perpetuity, then if you increase interest rates by a factor of five, you reduce the value of bonds by a factor of five as well. Now, 30-year bonds are the normal ones we look at. It's not quite that dramatic, but going from interest rates of 1% for bonds to 5% for bonds probably cut the value of the bonds held by the banks and non-bank financial institutions, existing bonds by 50 60%. Now, the only reason the financial system hasn't collapsed as a result of that is we have the fiction of what they call hold to maturity bonds rather than mark tomarket bonds. If you mark to market, you would be forced to reduce the value stated value of your assets. your bond assets by 50 60% you'd fault you'd be bankrupt. So instead what banks do is they they pretend that they're going to hold those bonds to maturity. So they have what they call mark to maturity so they don't change the face value of the bonds stated the recorded value of the bonds when interest rates rise. Now the Silicon Valley Bank had too many long-term bonds didn't wasn't able to use that trick and folded but I think most of the financial system is a very fragile state right now. So if you did have that fall in interest rates, you would actually increase the value of bonds that are held by banks and NBFIs and reduce the fragility of the financial system. So again, Trump's trying to do the right thing for the wrong reasons. Sound sounds familiar like I've I've heard that before. So um very interesting like question now. Readalio suggested for example gold as an hedge against what might be coming. Um what what should investors do right now Steve? Like when you look at this, I know it sounds ultra complex discussing here. >> Yeah. You're not investors, you're speculators. You're gambling on asset prices and investors build things. Okay. I want to make that distinction very clear. I'm sick and tired of people who speculate on shares calling themselves investors, you're speculators. Uh if you want to speculate, then you buy an asset which uh is, you know, has some probability of rising compared to uh fiat money, which gold obviously fits that barrel right now and so does Bitcoin. But if you take a look at the twists and turns and the value of of particularly Bitcoin, this is where the work of applied MMT is extremely important. And I think we should get Tyrone Canes or Doug from Applied MMT on here at some point as well. What they show is the major demand for Bitcoin and gold comes from when the government runs a large deficit because the deficit creates money and that then gives people money they can then buy non-financial assets with which is what Bitcoin and gold actually are. Um, so it's it's feasible that with the combination of craziness that's going on right now, you're going to have lots of fiat money creation, which is likely to be bullish for for Bitcoin and gold, but it's not uh that they're investing. You're just gambling on something which will rise when everything else fail falls. >> I I get that. Like we often hear that in in the junior mining space as well, speculators versus investors. Speculators are there just for the hot money. The question now is like the gold move for example and we can maybe debate that we have a few minutes to debate in detail like how much of that is systematically driven versus maybe speculation and investing like is it just really betting um just just riding the hot hand because it is on Vulcan as you said there's so much money liquidity M2 money supply is at a at a peak here or is there how much safe haven investing is that as well because we got the geopolitical crisis um you can we can believe that the monetary system might be failing some of the guests have argued for that as Well, um, so I'm trying to dissect that whether it's just purely speculation. Bitcoin bit different perhaps, bit hotter, but gold I would throw maybe into a different bucket here. I'm curious if you agree. >> Yeah, I mean it's this this is one of the points that Kane's made which people have never really properly absorbed and he says that our desire for money uh and speculative assets like Bitcoin and gold is an index of our disquitude about our own forecast of the future. Okay. So when you feel bloody uncertain about the future, you're worried, you're scared, you're going to go into something which you think is going to increase in value and then but to do that you've got to have the money being created and the you know the intention is is one thing actually having the cash to go and buy the assets is another story entirely. Now that cash is created in three ways. One is by running a trade surplus so you can rule it out for America. Uh the repatriated profits are part of it what you can do it with. Another is the government spending more than it takes back in taxation, running a deficit. Uh we know that Trump's going to do on a big scale because he's creating money for his fellow rich mates uh with tax cuts and cutting back on spending for the poor. So there's likely be more fiat money created out of that. The big question mark is what's going to happen with the credit market. And my feeling is uh the level of uncertainty is so great that people aren't going to be willing to particularly take on a lot of debt for things like mortgages and so on. Certainly not for real investment. But if you look at the level of margin debt right now, it's back to historic highs. The highs that have only been seen previously uh during the 87 bubble, the 2007 and back in the 1920s, uh when margin debt, people probably aren't aware of this, margin debt at the peak of the 1929 bubble reached 9% of GDP with a 10-fold leverage factor in margin debts at the time. So that sort of credit is likely to cause the asset markets to continue rising. But at the same time, you're going to have lots of fragility in the system courtesy of, you know, Trump's policies also undermining the entertainment sector, for example. >> Maybe just one last topic because you mentioned fragility and sort of um volatility, which I'm taking out of that as well. But the VIX is at 15. It's pretty much dead, for lack of a better term, if you were to use it as a heartbeat monitor, for example. Um what do you make of that? Why are investors But that's it's often the the lull before the storm is how I define describe this when I first modeled financial instability back in a paper published in 1995. I wrote in 1992 uh called modeling Minsk's financial instability hypothesis and that generated a period much to my surprise it wasn't something I programmed into the model. It generated a period of falling volatility before a crisis hit. Uh it's actually what's called an emerging property of a complex system. And but what I got the shock of my life when I started seeing the real data reproducing my model uh which was what they called the great moderation. So on that front I expect a period of falling volatility and general uh people having relaxed expectations to precede a crisis. >> It feels like we're in the eye of a hurricane right now. Um so I'm curious when when >> Yeah, that's not a bad that's a good way of putting it. Yeah. >> Right. So, I'm really curious when Duda will hit the fan and the winds will pick up again. So, we're really curious, Steve. Like, I could chat with you for hours. Like, there's so many topics we we could still touch on. We haven't even talked about productivity increases and boosts to productivity from various angles, whether it being AI and techreated or from a climate perspective, which you touched on last time when we spoke. >> So, very very different angles that we can touch on next time. I'll have you back before 6 months are over. Uh, can't wait six months again to have you back. That's good. Um I I know we're showing you a link to the Patreon page down below, but where else can we send our audience? Uh how can we direct our viewers towards you? >> I have a Substack page as well, Sub Profsteve Keen at Sububstack.com. I'm also giving a sort of online courses these days. The marketing will seem weird, okay? It's a marketing company that does the generic form of marketing for me. But if you go to stevekenfree.com, you'll get into the marketing line there. and I give a set of are very detailed lectures uh with about 650 people have signed up so far and I take them through my approach to economics completely different to what you've been taught at university it I have to clean your brains out first of all before you can the approach that I take because what we've been taught in my opinion is like being learning toll maker astronomy at the time of rocket launches mainstream economics is a complete and absolute waste of time and you need to have that deprogrammed out of your head and I did that in detail through the online course that I run through the cool uh platform skainfree.com take a look at that and uh join my band of uh merry economic rebels. >> Fantastic. Yeah, you just gave me the idea of an e economic ayaska camp as well. So um just to get some clarity on what is going on. Maybe I'll host one next summer. >> I've tried the mushroom. Never again. I did that once. Did that once in Mexico. Never again. >> Okay. No, no, no great investment ideas came out of that or anything economic clarity. >> No, no, it was lots of trips to the toilet. >> Oh. Oh my goodness. All right. No, then I'll skip that. And I'm definitely not recommending it to anybody else. So, >> fantastic. Awesome. Steve, it was a great pleasure having you on the show. Really appreciate it. And everybody else, thanks so much for tuning into Sora Financially. Extremely complex but interesting conversation here with Professor Steve Keen. If you enjoyed our content, please leave a like, leave a comment down below, and if you haven't done so, hit that like and subscribe button. What do you think about Ray Dalio marching forward here, saying we we're nearing economic collapse in 3 years. Is he just sable rattling? Is he just fear-mongering? Or do you think there's more to it? Really curious to hear your opinion down below as well. I read all the comments, sometimes good, sometimes bad, but I want to hear from you. So, please put it down below, and we much much appreciate it. Thank you so much for tuning in. We'll be back with lots more. Take care out there. [Music]