He accurately picked the peak of the housing market prior to the recession of 2008.
In 2019, he forecasted that the US would enter a recession in 2020.
The man I’m talking about is the renegade economist and author of Debunking Economics, Professor Steven Keen.
His research on complex systems modelling of debt deflation was awarded the eminent Revere Award from the ‘Real-World Economics Review’, describing Keen as the economist…
‘…who first and most clearly anticipated and gave public warning of the Global Financial Collapse and whose work is most likely to prevent another GFC in the future.’
He wasn’t the first economist to give advance warning of impending downturns, but he was one of the most prominent to do so.
Keen didn’t make his forecasts using the 18-year cycle (although he’s familiar with the concept).
His analysis comes from a purely monetary standpoint.
But let me rewind a little. Professor Steven Keen hasn’t got a great reputation in the mainstream media here.
Back in 2008, it was widely publicised that he walked more than 200km from Canberra to the top of Australia’s highest mountain, Mt Kosciuszko.
You can read about it here.
Why?
He’d lost a bet to (now former) Macquarie Group interest rate strategist Rory Robertson that Aussie house prices would dive by 40% from their peak in 2008.
The property crash we didn’t have to have was due to a Christmas hamper of buyer incentives offered by the Rudd government to prevent the market from collapsing.
The story is told in Wayne Swan’s book The Good Fight.
Swan received a call from US Treasury Secretary Henry Paulson on 10 January 2008:
‘I can remember every word of our conversation: “Look…if we can avoid a meltdown in house prices, then we might be able to see a way through this…”’
We’re all familiar with the order of things.
Keeping the land market inflated is always the government’s starting point for avoiding economic meltdown.
Most recently, Steve Keen ran as a senate candidate in the 2022 federal election.
The attempt was unsuccessful. However, it allowed him to publicise his cure for the boom/bust cycle and point out the flaws in the current system.
I reached out to Steve for an interview after watching the charade a week or so ago, as RBA Governor Philip Lowe was pulled up in front of the Senate to explain how jacking up interest rates will supposedly control inflation.
In the upcoming video interview, Keen is going to dispel this myth — and others surrounding the current economic narrative.
We discuss the following:
- What could lay ahead for the economy in the next few years.
- How economic thinking has become corrupted and the consequences.
- How to transit to a system that would enable people to flourish.
- And we also delve into the politics and appalling economic analysis that sits behind the climate change narrative.
All this and much more!
It was a pleasure to talk to Steve.
I hope you enjoy the interview as much as I did!
Sincerely,
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Catherine Cashmore,
Editor, Land Cycle Investor
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