Australia is heading for a recession in 2017, says Professor Steve Keen. The best way to get prepared for recession in Australia is to reduce debts and sell assets, he says.

You may remember Keen as the expert who lost his bet on housing prices after the GFC. He said he would walk to Mount Kosciusko from Canberra if he was wrong about his speculation.

Keen eventually turned out to be wrong. He kept his promise by covering the distance by foot. He asked others to join him for a charity walk.

While he was wrong the last time, this time he seems more confident than ever. He says housing prices in are going to fall as low as 70 percent. He also says that the unemployment will rise significantly.

According to the profession, the Reserve Bank has guided the Australian economy to create asset bubbles. Recession in Australia is going to be reality as households have been encouraged to borrow at low rates, he says.

Keen is clueless about the Reserve Bank’s role in the matter. He quotes the Bank of International Settlements to note that Australia’s private debt level has risen to 210 per cent of GDP from 150 per cent of GDP.

“We have borrowed ourselves so much to the hilt that we are now dependent on that continuing to rise over time and it simply won’t,” the profession told the ABC.

“We are the last idiot on the block,” Keen says as he draws comparison with Ireland and Spain. He believes Australia enjoys growth because of 60 per cent rise in household debt. Keen says Australia is repeating the same mistakes made by Ireland and Spain.

If we look at the United States, it has suffered one recessionary period in every seven-and-a-half years since 1970. Even though Australia is not always influenced by the US economy, it is better to be safe than sorry.

Not everyone agrees with Keen on the danger of low interest rates. They believe the government should continue to do the same. Some suggest the low rates should be locked for at least 30 years.

Keen, on the other hand, calls the government “stupid” when it comes to planning about economy. He says the government is “obsessed about running surpluses when it is bad economics.”

Will Keen be right this time? Is recession in Australia in 2017 really going to happen? Only time can answer that question.