04/16/2015 - Financial Repression is a Weapon of Mass Financial Destruction
“Central bank financial repression results in the systematic and severe mispricing of financial assets. And that has sweeping consequences far beyond the windfalls it bestows on the thin slice of mankind that frequents the casinos of Wall Street, London, Tokyo and Shanghai. The fact is, the prices of money, debt, equity, traded commodities and all their derivatives comprise a vast and instantaneous signaling system that cascades through every nook and cranny of the real economy. Since the Greenspan age of financial repression in the late 1980s, the returns to savings have been obliterated while the rewards for speculation have soared. That’s important because only savings from production & income generate primary capital that can foster future wealth. Leveraged speculation merely causes existing assets to be re-priced & a temporary redistribution of paper wealth from the cautious to the exuberant. .. Financial repression is a weapon of mass financial destruction.”
– David Stockman
