tag:blogger.com,1999:blog-2761684730989137546.post886456818918881159..comments2024-03-28T07:50:06.102-04:00Comments on Mike Norman Economics: Steve Keen — China Crash: You Can’t Keep Accelerating Forevermike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2761684730989137546.post-90100331285919616652015-08-25T10:01:49.587-04:002015-08-25T10:01:49.587-04:00Not sure that I follow your logic, @Neil ? Care ...Not sure that I follow your logic, @Neil ? Care to give an example of a debt for equity swap that you have in mind?<br /><br />Bottom line is that you need to create money to feed the economy, either private deficit spending or government deficit spending. If you are suggesting that government step in to "buy" toxic private debt when markets implode, similar to the Fed buying MBS's, that's government spending by any other name, and those types of corporate bailouts are generally not supported by the public in our so-called democracies.<br /><br />The whole point of capitalism is that it supposedly ensures that resources are invested wisely. Unwise investments need to be allowed to fail, otherwise capitalism is not really capitalism. Just my 2 cents. :-)Dan Lynchhttps://www.blogger.com/profile/11189866002273597534noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-67205606433884848992015-08-25T02:53:35.352-04:002015-08-25T02:53:35.352-04:00" Though it's possible that the Chinese g..." Though it's possible that the Chinese government could pull some "extend and pretend" policy out of its hat to re-inflate its bubble"<br /><br />Keen generally misses the obvious fix - debt for equity swap. Once you make money patient you don't need the velocity to feed it. And that tends to stop the cash-flow failures from happening. People 'trade out of the situation'. NeilWhttps://www.blogger.com/profile/11565959939525324309noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-51130296081749553972015-08-24T13:46:20.459-04:002015-08-24T13:46:20.459-04:00Hard to argue with Keen. Though it's possibl...Hard to argue with Keen. Though it's possible that the Chinese government could pull some "extend and pretend" policy out of its hat to re-inflate its bubble.<br /><br />On a related note, Rodger Mitchell <a href="http://mythfighter.com/2015/08/21/the-recession-is-coming-the-recession-is-coming-when-exactly/" rel="nofollow">posted an interesting chart</a> recently suggesting that a US recession may not happen for several years yet. It's hard to argue with Rodger's chart, but my gut feeling is that our economy is a house of cards and it wouldn't take much to pop it.Dan Lynchhttps://www.blogger.com/profile/11189866002273597534noreply@blogger.com