Why Gold Can Fall When the Next Crisis Begins | Steve Keen

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) Follow Jeremy Szafron on X: @JeremySzafron (https://twitter.com/JeremySzafron) Follow Kitco News on X: @KitcoNewsNOW (https://twitter.com/KitcoNewsNOW) 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 __________________________________________________________________ Like, share, and subscribe to Kitco News—and turn on alerts to stay current with expert interviews, market insights, and breaking news coverage. FOLLOW US: X: https://x.com/kitconewsnow Instagram: https://www.instagram.com/kitconews Facebook: https://www.facebook.com/KitcoNews LinkedIn: https://www.linkedin.com/company/kitconews Listen to the PODCAST on 🎧 Spotify: https://open.spotify.com/show/1My4WgtF0ZhUnxkxDLoJof 🎧 Apple Podcasts: https://podcasts.apple.com/us/podcast/kitco-news/id1842889233 🎧 All podcast episodes available here → https://kitconews.buzzsprout.com Visit: https://Kitco.com/ for live gold, silver, and crypto prices, the latest mining news, and macroeconomic insights. 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Disclaimer: The videos are not intended to provide trading advice, and the views expressed do not necessarily reflect those of Kitco Metals Inc. Kitco News, its anchors, producers, and reporters are not responsible in any way for the performance or actions of any sponsor, advertiser or affiliate of Kitco News. In no event will Kitco and its employees be held liable for any indirect, special, incidental, or consequential damages arising out of the use of the content in this video.