Episode Details

Professor Steve Keen says the AI bubble has less than a year to run, with revenue from serious users running at roughly one fifth of what these companies are spending. Speaking with Jeremy Szafron, Keen argues the debt that matters is private debt, not the $40 trillion everyone is watching, and explains why companies that have serviced their loans comfortably for 15 years could start defaulting.

Keen was voted first by readers of the Real-World Economics Review in 2010 for having warned earliest and most clearly about the global financial crisis, ahead of Nouriel Roubini. He wrote Debunking Economics and built the economic modelling software Minsky and Ravel.

He explains how commercial banks create money when they lend, why he says more than 90% of the money created since 2000 came from the private sector rather than government, what the Federal Reserve's bank stress tests miss, and where he parts company with Ray Dalio on sovereign versus private debt.

On gold, Keen calls it a speculative commodity that does well when people distrust the financial system, while warning it is "not a one-way bet" because leveraged holders get forced to sell into a crisis.

Recorded August 24 2026

Follow Steve Keen on X: @ProfSteveKeen (https://twitter.com/ProfSteveKeen)
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CHAPTERS
00:00 Private Debt at a Breaking Point
 01:00 What Is Gold Waiting For?
 03:00 Why Markets Underreact, Then Panic
 04:37 Why Gold Can Fall First
 05:31 Why Private Debt Still Rules the Cycle
 07:30 Households Deleveraged, Companies Didn't
 09:23 The Debt Chart Nobody Shows You
 12:18 Credit Creation Drives Unemployment
 15:30 Can Central Banks Rescue the System Again?
 18:05 The $410B AI Debt Boom & Junk-Yield Risk
 20:15 Why the AI Bubble Bursts Within a Year
 23:45 Why Data Centers Age Faster Than Houses
 25:44 How Commercial Banks Actually Create Money
 27:48 Treasury Cash Drawdowns & Bond Buybacks
 29:35 Double-Entry Accounting: Bank vs. Government Money
 32:00 Are Treasury And The Fed Really Separate?
 34:03 How Bond Sales Drain System Liquidity
 35:52 What Happens If the U.S. Revalues Its Gold?
 38:12 Could The Fed Just Buy All The Debt?
 39:18 Inflation vs. Solvency: Where Risk Truly Lies
 42:02 Step-by-Step Anatomy of a Corporate Default
 46:04 Bank Capital Depletion & Equity Write-Downs
 49:49 Why the Fed's Bank Stress Tests Miss Reality
 51:58 What Actually Triggers It, And When
 54:30 The Impact on Savers & Unleveraged Households
 55:50 Ray Dalio vs. Steve Keen: Sovereign vs. Private Debt
 57:04 Irving Fisher & Modern Debt Deflation
 59:45 Does Physical Gold Protect in a Debt Deflation?
 01:00:20 What Would Prove This Framework Wrong?
 01:02:08 Steve Keen's New Book & Closing Thoughts

FIND STEVE KEEN
Substack and Patreon under Prof Steve Keen. His course is at skool.com/profstevekeen. His next book, How Economists Will Destroy Capitalism, is due from Polity Press.

#Gold #AIBubble #SteveKeen
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