Explaining Richard Koo to Paul Krugman | SNBCHF.com

George Dorgan writes:

….Prof. Steve Keen’s and Richard Koo’s recipe is to increase public debt, when the private sector is de-leveraging and to reduce public debt when the private sector is leveraging. According to Keen, the Americans are currently doing the complete opposite of what they should do. They should continue reducing private liabilities, but they should increase public spending.

The Fed wants the average American to spend, even deficit spending, while the state is doing austerity. According to Keen, the current increase of private US debt could lead to a new recession.

Read more at Explaining Richard Koo to Paul Krugman, to Austrian Economists and the SNB #Balance Sheet Recession.

Steve Keen on Hard Talk

Steve Keen on how we can safely deflate the debt bubble. There may be alternative, less radical measures that could be taken to help the de-leveraging process but his basic message is right: deleveraging could cause 10 years or more of pain if we do not take measures to address the problem.

Cut in Europe Bank Lending Has Wide Impact – WSJ.com

European banks in recent years dramatically boosted lending to emerging markets and were among the biggest cross-border lenders in these countries. Their retreat has tightened credit in industries—from aircraft to media to mining — squeezing economies already feeling the effects of reduced demand from the developed world for their exports….”We’re in a very vulnerable position that’s definitely impacting global growth,” Gail Kelly, chief executive of Australia’s Westpac Bank said at The Wall Street Journal CEO Council last week. “It’s certainly impacting in my country and in Asia.”

via Cut in Europe Bank Lending Has Wide Impact – WSJ.com.