01/24/2015 - Financial Repression is Financial Authoritarianism
“When I first heard of financial repression, it was from some IMF document, and I immediately thought it was a mistake. Why would they use a term that conveys authoritarianism or something negative when they really wanted to use some sort of boring academic phrase? It’s actually ironic they chose that term .. I think what the IMF calls financial repression is better described as financial authoritarianism. Because we’re not just talking about repressing financial things, like artificially low interest rates to help a government finance its debt, which sounds pretty academic or abstract to most people. But when you look at the indirect and the immeasurable effects that come from financial repression, it negatively affects all aspects of life. That’s why I believe it is more accurate to call it financial authoritarianism, because that’s what it basically is. Central banking and a fiat money are the main enablers of financial repression. It gives the government the tools to manipulate the currency, to manipulate the interest rate that they otherwise wouldn’t have under a sound-money kind of system. Financial repression is needed to help governments finance debt .. Dealing with an out of control government debt burden which comes from out of control government spending, is where the impetus for financial repression comes from.”
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