02/21/2015 - Financial Repression has allowed Governments to get deeper into Debt
“The anti-austerity sentiment appears to be gaining momentum even in the core nations of Europe .. Even the president of the European Commission recently questioned the usefulness of austerity, noting its results so far have only been shrinking growth and social suffering .. Austerity in Europe is on life support, but the insatiable desire to spend is not limited to just Europe .. Seduced by low interest rates, governments all over the globe are yearning to return to their former big spending ways. Using the cover derived from lower deficit to GDP ratios—caused by record-low rates–politicians are emboldened to return to their first love .. deficit spending. For example, the interest payment on the national debt in the U.S. is lower today than it was prior to the financial crisis, despite the fact that the national debt is $9 trillion higher .. When interest rates rise above these currently manipulated low levels, not only will payments for debt service soar, but the asset bubbles created by central banks over the past seven years will burst.”
– Michael Pento
