Steve Keen, author and Professor of Economics and Finance at the University of Western Sydney, discusses private money creation and the myth of fractional reserve lending on Capital Account with Lauren Lyster.
On Fractional Reserve Lending:
Fractional reserve lending itself is a myth.
Regarding Shadow Banking:
…I’m all in favor of profitable banks. I’m not in favor of profitable parasites. That’s what we have right now.
…Shadow banking finances shadow capital. What you see them doing is financing mergers and acquisitions, takeovers, share buybacks, speculation on property, leveraged buyouts, all this sort of nonsense, which doesn’t add to the productive capacity of the economy, and frequently actually destroys that productive capacity.
The 28 minute video is worth every second of your valuable time…