Prof Fekete on Hyper-Deflation


In his second appearance on the Keiser Report, Professor Antal E. Fekete of discussess Fed induced hyper-deflation and why he believes the American Austrians were wrong to predict that quantitative easing would cause inflation.

(His first appearance can be seen here.)

The interview begins at 13:16 min (it should start at that point) and covers topics such as:

  • How the Fed has become the main engine of deflation
  • Why we are going deeper into deflation – or as the Professor terms it “hyper-deflation”
  • Why he prefers the Mengerian origins of Austrian economics
  • Why he believes many modern Austrian economists are cultist and unable to engage in debate and discussion
  • How he sees Cyprus as the blueprint for what will spread and happen elsewhere
  • Why he doesn’t believe in the quantity theory of money
  • How even thought the Fed is pumping out enormous amounts of money, capital is still being destroyed at the same time and so this is why there is such high unemployment
  • How deflation starts in pockets but then it spreads. So if you’re not in that pocket you don’t notice it.
  • How the low interest rates that have supposedly helped businesses, have actually had the exact opposite effect
  • He gives the example of how with long established firms such as GM it is now the financial part of the firm that is now the main business.
  • How many former great businesses now are just shuffling paper rather than producing goods that are needed
  • How we are seeing real estate bubble number 2 being created.
  • And finally he briefly explains his “New Austrian Manifesto” – how they defer from the mainstream Austrian economists.

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