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Banks don’t “lend out” your deposits, they create money when they lend.

In this video, Steve Keen dissects the classcial economist's fractional-reserve story, responds to critics, and uses Ravel to show why the classic money-multiplier only “works” if loans are made in cash. Once you enforce real double-entry bookkeeping, the narrative collapses — and the real mechanics of bank-originated money and debt come into focus.

What you’ll learn

• Why the textbook money-multiplier breaks under proper accounting

• How bank lending creates deposits (new money) on both sides of the ledger

• Why reserves ≠ “loanable funds” and why deposits aren’t lent out

• Where popular explanations violate assets = liabilities + equity

• Why getting money creation right matters for debates on deficits, QE/QT, and “can we afford it?”

• How Ravel exposes hidden assumptions in neat verbal stories — step by step

Key takeaways

• If a model can’t balance the T-accounts, it’s wrong, regardless of how often it’s taught.

• Loans create deposits; deposits aren’t a stockpile that gets parcelled out.

• Cash is the only way to make the textbook multiplier arithmetic “work”, which tells you the model is not how modern banking operates.

• Misunderstanding bank money leads to bad policy: deficit panic, confused takes on QE/QT, and misguided bank rules.

About Steve Keen

Steve Keen is an economist known for accounting-consistent, data-driven models of money, debt, and instability. Creator of the Minsky and Ravel tools, he replaces classroom myths with operational mechanics you can simulate and test.

• Weekly live access & Q&A

• Cohort of rigorous, curious learners

• Ravel included for accepted students who join

Support reality-based economics

• Subscribe for more Ravel walk-throughs and myth-busting

• Like if this clarified how banks actually create money

• Share with someone still quoting the money-multiplier

Get exclusive Cyber Monday bonuses including Unlimited Ravel use, Q&A calls with me, 100-Day Guarantee and other exclusives at 👉 https://cyber.stevekeen.com

#economicseducation #moneycreation #banks #doubleentrysystem #ravel #macroeconomics #fiscalpolicy #monetarypolicy #banking101 #stevekeen

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Get exclusive Cyber Monday bonuses including Unlimited Ravel use (my proprietary software I use in this video), Q&A calls with me, 100-Day Guarantee and other exclusives at https://cyber.stevekeen.com

⌛️ Ends on Monday Dec 1st 11:59PM EST.

Why are homes unaffordable from London to Sydney?

Steve Keen shows why the standard “supply & demand” story misses the engine underneath modern housing bubbles: bank-originated mortgage credit. Using long-run BIS datasets, Steve tracks how real house prices decoupled from consumer prices after the 1980s as banks ramped mortgage lending. The kicker: it’s not just the level of mortgage debt that drives prices — it’s the change in the change of mortgage debt. That credit pulse explains booms, busts, and today’s squeeze.

What you’ll learn

• Why real house prices were flat for a century… then went vertical after the 1980s

• How bank lending (not “savers’ deposits”) creates new purchasing power for housing

• The critical driver: ΔΔ Mortgage Debt → Δ Real House Prices (UK, US, Australia, more)

• Why simple correlations mislead — and why differencing reveals the true causal link

• How rising inequality and speculative demand amplify bank-fueled price cycles

• Policy levers that actually bite: credit guidance, LTV/DTI caps, and curbing mortgage speculation

Key takeaways

• Housing became a credit-fueled asset: prices outran CPI and wages because banks created the demand.

• The credit impulse (change in the change of household debt) best explains house-price swings.

• Countries without a visible “crash” can still be in an oversized, fragile credit cycle.

• Taming bubbles means steering bank credit toward productive uses — not bidding wars for existing homes.

Policy ideas discussed

Credit guidance for banks: prioritize business working capital & durable goods; restrict mortgage speculation.

Macroprudential limits: tighten LTV/DTI during upswings; countercyclical buffers that lean against credit booms.

Re-align incentives: discourage flipping/empty-home speculation; reward new supply without turbo-charging land prices.

Measure what matters: track private-debt ratios and the credit impulse alongside CPI/unemployment.

------

About Steve Keen

Steve Keen builds accounting-consistent, data-driven models of money, debt, and instability. Creator of Minsky and Ravel, he replaces classroom myths with the operational mechanics you can simulate and test.

Get exclusive Cyber Monday bonuses including Unlimited Ravel use (the software I use in this video), Q&A calls with me, 100-Day Guarantee and other exclusives at 👉 https://cyber.stevekeen.com

⌛️ Ends on Monday Dec 1st 11:59PM EST.

• Weekly live Q&A access

• Cohort of rigorous learners

• Ravel included for accepted students who join

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• Like if this reframed housing beyond “just build more” takes

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Steve Keen sits down with Sky’s Ed Conway to stress-test the OBR’s terrifying long-run debt charts (274%… 600%+ of GDP) and shows why they rest on a false banking model. Using Ravel, Steve compares the textbook “loanable funds” view with the Bank of England’s 2014 statement on how money is actually created (banks create deposits when they lend). The result: debt-panic projections collapse, and a saner policy mix comes into view.

What you’ll learn

• Why “banks as mere intermediaries” breaks macro logic — and the forecasts built on it

• The BoE’s money creation mechanism vs. the textbook story — and why it matters for deficits

• How government deficits create fiat money, and why that’s a feature, not a bug

• Why secondary bond sales by banks to non-banks destroy deposits (and how to rein that in)

• How QE/QT and rate hikes ripple through bond prices, bank balance sheets, and yields

• Why private debt and credit growth are the true cyclical drivers — and why policymakers ignore them

• Practical fixes: deficit-fund essential services, cap secondary bond offloads, guide credit away from asset bubbles

Key takeaways

• OBR-style “debt to the sky” charts depend on a loanable-funds world that doesn’t exist.

• In the real world, bank lending creates deposits; credit affects demand and GDP.

• Deficits add fiat money to private balances and need not imply a debt doom loop.

• Private debt and credit swings drive unemployment and crises; government debt usually reacts after the fact.

• QT plus rapid rate hikes compress bond prices and can destabilize banks; policy must account for this transmission.

Policy prescriptions discussed

Run deficits to fund real needs (healthcare, winter heating, critical services).

Limit banks’ secondary bond sales to non-banks (or sell new gilts directly to the central bank and pay interest on reserves).

Use credit guidance: allow lending for productive business working capital and major consumer durables; restrict mortgage/asset-price speculation.

Target private-debt/credit metrics in macro policy (e.g., keep private debt ≤ ~100% of GDP).

About Steve Keen

Steve Keen is an economist known for accounting-consistent, data-driven models of money, debt, and instability. Creator of the Minsky and Ravel tools, he replaces classroom myths with operational mechanics you can simulate and test.

Try the Seven-Week Rebel Economist Challenge

Apply here: https://www.stevekeen.com

• Weekly live access for Q&A

• Cohort of like-minded learners

• Ravel software included for accepted students who join

Support reality-based economics

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#Economics #SteveKeen #EdConway #UKDebt #OBR #BankOfEngland #Ravel #PrivateDebt #CreditCycles #QE #QT #BondYields #FiscalPolicy #Macro

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📢 This is a reupload of the original video with improved visuals and audio for a better viewing experience.

Top Economist Steve Keen breaks down why the UK’s housing market has gone from “crisis” to “ticking time bomb.” With long-run data and Ravel demos, Steve shows how deregulated mortgage lending not mere shortage pushed the price-to-income ratio from ~4.5× in the post-war era to ~9× today, and lays out two concrete, workable policies to restore affordability: PILL (Property Income Limited Leverage) and an Affordable Housing Authority offering zero-interest mortgages for median and below-median earners.

In this video, you’ll discover:

✅ Why today’s 9× price-to-income rivals 1876 — and what changed after the 1980s

✅ Building societies vs banks: why one didn’t create money and the other does

✅ How bank-created mortgage credit inflates prices far faster than wages

✅ The post-Thatcher break: household debt explodes, real house prices double faster

✅ PILL: cap mortgages to a multiple of rental income and phase it down toward ~10×

✅ AHA: zero-interest public lending that turns “housing stress” into manageable payments

✅ Why both must run together (one cools leverage, the other preserves access)

✅ Bonus history: Ford and Edison’s case for interest-free public finance — and why it matters now

Key insights:

• Price without leverage is fiction: new mortgage credit is the main source of housing demand.

• Deregulation shifted lending from building societies to banks — expanding money and bidding up existing homes.

• At 7% interest, over half of lifetime payments are interest; at 0%, typical payments drop near the 30% “stress” threshold.

• Pairing PILL with AHA bends prices down while keeping doors open for average earners.

• Private debt — not public debt — is the core macro risk behind UK housing volatility.

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---

Who is Dr. Steve Keen?

Dr. Steve Keen is an economist known for accounting-consistent, data-driven models showing how bank money and private debt drive booms, busts, and asset bubbles. Creator of the Minsky and Ravel tools, he replaces classroom myths with operational mechanics — essential for engineers, finance professionals, and anyone who wants clarity over ideology.

Learn 50+ Years of Economics in Only 7 Weeks, by applying here: [https://www.stevekeen.com](https://www.stevekeen.com)

(Plus get Ravel — the software used in this video — as a bonus if you’re accepted and join.)

#UKDebt #MoneyCreation #ukeconomy #BOMD #SteveKeen #Ravel #Macroeconomics #FiscalPolicy #BankingSystem

Learn 50+ Years of Economics in Only 7 Weeks, by applying here: https://www.stevekeen.com

This video is an extended version of previous video - "Deficits aren't the danger to the US, THIS is..." Top Economist warns

(Plus get Ravel — the economic visualization software used in this video — as a bonus if you’re accepted and join.)

Economist Steve Keen explains how decades of neoliberal U.S. policies have turned government deficits into a dangerous economic cycle. Using clear double-entry accounting and Ravel visualizations, Steve reveals how the obsession with balanced budgets and market deregulation has weakened the real economy, inflated private debt, and set the stage for financial collapse.

He breaks down how bank lending still creates most of the money in circulation, why government deficits actually build deposits and reserves, and how open-market operations merely reshuffle assets instead of generating real wealth. Finally, Steve proposes a Modern Debt Jubilee — a practical path to reset the system, reduce unpayable private debts, and restore long-term financial stability without falling into the illusion of “printing money.”

In this breakdown, you’ll discover:

✅ Cash vs digital money: why the press in DC is a sideshow

✅ Government spending and taxes in the ledger: deposits up, taxes down — what really changes

✅ Reserves 101: what banks can and can’t do with them (and why they aren’t “spendable” money)

✅ Deficit mechanics: why deficits create both money and reserves, surpluses destroy them

✅ The eight entries you need to model government money creation (beyond simple double entry)

✅ Why “borrowed from the private sector” is an accounting myth in loanable-funds models

✅ How OMOs and QE actually work: when they create money, when they don’t

✅ The data picture: since 2000, most new money has been credit-backed (private), not fiscal

✅ Why government negative financial equity is normal — and necessary for private net financial assets

Key insights:

• Deficit is not a bug — it’s the feature that creates net financial assets for the private sector.

• Reserves are bank-to-central-bank balances; they support payments and bond settlement, not your latte.

• Open-market operations with non-banks can create money; purchases from banks swap assets inside the banking system.

• Loanable-funds thinking explodes government debt in theory because it excludes money creation in the first place.

• Accounting done properly shows government negative financial equity mirrors private positive equity.

-----

What did you think of the eight-entry walkthrough and the OMO/QE distinctions? Share your thoughts below.

Subscribe for reality-based economics

Like if this clarified how deficits, reserves, and QE actually work

Share to help others move beyond textbook myths

-----

Who is Dr. Steve Keen?

Dr. Steve Keen is an economist known for accounting-consistent, data-driven models that explain how bank money, private debt, and policy operations shape the real economy. Creator of the Minsky and Ravel tools, he replaces classroom analogies with operational mechanics — essential for engineers, finance professionals, and anyone who wants clarity over ideology.

Learn 50+ Years of Economics in Only 7 Weeks, by applying here: https://www.stevekeen.com

(Plus get Ravel — the software used in this video — as a bonus if you’re accepted and join.)

#usshutdown #usdebtcrisis #useconomy #usdebt #BankingSystem #QE #economics #money #Macroeconomics #usgovernment

Learn 50+ Years of Economics in Only 7 Weeks: apply at https://www.stevekeen.com

(Bonus: accepted students who join get Ravel — the double-entry, macro visualization tool used in this video.)

Banks don’t “lend out” your deposits, they create money when they lend.

In this video, Steve Keen dissects the classcial economist's fractional-reserve story, responds to critics, and uses Ravel to show why the classic money-multiplier only “works” if loans are made in cash. Once you enforce real double-entry bookkeeping, the narrative collapses — and the real mechanics of bank-originated money and debt come into focus.

What you’ll learn

• Why the textbook money-multiplier breaks under proper accounting

• How bank lending creates deposits (new money) on both sides of the ledger

• Why reserves ≠ “loanable funds” and why deposits aren’t lent out

• Where popular explanations violate assets = liabilities + equity

• Why getting money creation right matters for debates on deficits, QE/QT, and “can we afford it?”

• How Ravel exposes hidden assumptions in neat verbal stories — step by step

Key takeaways

• If a model can’t balance the T-accounts, it’s wrong, regardless of how often it’s taught.

• Loans create deposits; deposits aren’t a stockpile that gets parcelled out.

• Cash is the only way to make the textbook multiplier arithmetic “work”, which tells you the model is not how modern banking operates.

• Misunderstanding bank money leads to bad policy: deficit panic, confused takes on QE/QT, and misguided bank rules.

About Steve Keen

Steve Keen is an economist known for accounting-consistent, data-driven models of money, debt, and instability. Creator of the Minsky and Ravel tools, he replaces classroom myths with operational mechanics you can simulate and test.

Try the Seven-Week Rebel Economist Challenge

Apply here: https://www.stevekeen.com

• Weekly live access & Q&A

• Cohort of rigorous, curious learners

• Ravel included for accepted students who join

Support reality-based economics

• Subscribe for more Ravel walk-throughs and myth-busting

• Like if this clarified how banks actually create money

• Share with someone still quoting the money-multiplier

#economicseducation #moneycreation #fractionalreservebanking #doubleentrysystem #ravel #macroeconomics #fiscalpolicy #monetarypolicy #banking101 #stevekeen

Learn 50+ Years of Economics in Only 7 Weeks: apply at https://www.stevekeen.com

(Bonus: accepted students who join get Ravel — the double-entry, macro visualization tool used in this video.)

In this revealing video, Steve Keen takes us back to the 1929 Great Depression to show how similar economic conditions could lead us to another crisis. He critiques the conventional wisdom, explains why debt-fueled booms lead to catastrophic busts, and highlights a better way forward. Steve’s deep dive into private debt, inflation, and government spending offers a much-needed alternative perspective to mainstream economic thought.

Key Takeaways:

The True Cause of the Great Depression: How over-indebtedness and deflation triggered the collapse, and why we’re repeating these same mistakes today.

Fisher's Paradox: How the more debtors try to reduce their debt, the more they actually increase it, exacerbating economic downturns.

The Role of Private Debt: A detailed look at how high private debt, combined with low inflation, caused both the boom and bust of the 1920s and 1930s.

Lessons from History: What went wrong in the 1920s, how it led to the Great Depression, and why we still haven't learned from it.

Government Spending & Recovery: Steve shows why government intervention (like the New Deal) was key to stopping the economic collapse and why it’s critical to act similarly today.

What’s the Real Crisis?

Steve goes beyond the numbers to question whether we, as a society, are chasing the wrong crisis. With the UK and global economies facing mounting debt and the possibility of inflation spiraling out of control, it's time to ask: Are we truly prepared to face the same conditions that led to the Great Depression?

The Truth About Debt and Inflation

Steve dives deep into the data to debunk the myths surrounding the "debt crisis." According to Steve, private debt, not government debt, is the real problem, and it’s being ignored in the current economic debate. The rise in private debt since the 1980s, fueled by deregulation and a focus on asset price speculation, has led us to the point where the next financial collapse may be just around the corner.

Key Concepts Covered:

Fisher’s Paradox: The idea that debt reduction efforts can lead to increased debt burdens in times of deflation.

Private Debt vs Government Debt: How credit impacts the economy and why private debt is more dangerous than government debt.

Government’s Role in Recovery: Why government spending—especially deficit spending—is necessary to prevent a crisis.

Policy Solutions

Steve suggests three policy measures that could help avoid another Great Depression:

Limit Private Debt: Regulate lending to prevent asset price bubbles.

Government Spending: Use government debt to finance essential services and stop economic decline.

Debt Jubilees: Cancel or restructure private debt to prevent another financial collapse.

The Ravel Software Demonstration

Steve uses his proprietary Ravel software to demonstrate how the current financial system is designed to fail and what needs to be done to fix it. Using double-entry bookkeeping, he shows the difference between conventional economic models and the reality of how money and debt work in today's economy.

Critical Insights:

The Real Impact of Government Debt: The video challenges the conventional wisdom that government debt is the primary issue, arguing instead that private debt is the true threat.

The Danger of Deflation: Why...

Learn 50+ Years of Economics in Only 7 Weeks, by applying here: https://www.stevekeen.com

(Plus get Ravel — the economic visualization software used in this video — as a bonus if you’re accepted and join.)

Top Economist Steve Keen explains how U.S. government policies are driving the economy toward bankruptcy and why the true fix isn’t austerity, but a Modern Debt Jubilee. Using clear double-entry accounting and Ravel visualizations, Steve breaks down how private bank lending still creates most of the money in circulation, why government deficits actually generate deposits and reserves, and how open-market operations merely shuffle assets rather than create real wealth. He then shows how a Modern Debt Jubilee could reset the system cancelling unpayable debts, restoring balance sheets, and reviving real economic growth without the illusion of “printing money.”

In this breakdown, you’ll discover:

✅ Cash vs digital money: why the press in DC is a sideshow

✅ Government spending and taxes in the ledger: deposits up, taxes down — what really changes

✅ Reserves 101: what banks can and can’t do with them (and why they aren’t “spendable” money)

✅ Deficit mechanics: why deficits create both money and reserves, surpluses destroy them

✅ The eight entries you need to model government money creation (beyond simple double entry)

✅ Why “borrowed from the private sector” is an accounting myth in loanable-funds models

✅ How OMOs and QE actually work: when they create money, when they don’t

✅ The data picture: since 2000, most new money has been credit-backed (private), not fiscal

✅ Why government negative financial equity is normal — and necessary for private net financial assets

Key insights:

• Deficit is not a bug — it’s the feature that creates net financial assets for the private sector.

• Reserves are bank-to-central-bank balances; they support payments and bond settlement, not your latte.

• Open-market operations with non-banks can create money; purchases from banks swap assets inside the banking system.

• Loanable-funds thinking explodes government debt in theory because it excludes money creation in the first place.

• Accounting done properly shows government negative financial equity mirrors private positive equity.

-----

What did you think of the eight-entry walkthrough and the OMO/QE distinctions? Share your thoughts below.

Subscribe for reality-based economics

Like if this clarified how deficits, reserves, and QE actually work

Share to help others move beyond textbook myths

-----

Who is Dr. Steve Keen?

Dr. Steve Keen is an economist known for accounting-consistent, data-driven models that explain how bank money, private debt, and policy operations shape the real economy. Creator of the Minsky and Ravel tools, he replaces classroom analogies with operational mechanics — essential for engineers, finance professionals, and anyone who wants clarity over ideology.

Learn 50+ Years of Economics in Only 7 Weeks, by applying here: https://www.stevekeen.com

(Plus get Ravel — the software used in this video — as a bonus if you’re accepted and join.)

#usshutdown #usdebtcrisis #useconomy #BankingSystem #QE #economics #money #Macroeconomics #usgovernment