04/01/2016 - Forbes Essay On Financial Repression
Forbes essay highlights how investing today is a lot of about guessing what the policy of central banks will be going forward .. “What is going on? It’s called ‘financial repression.’ It’s a technique whereby government transfers private wealth into public coffers by raiding savings and capital by the fixing of interest rates. If a saver is paid less interest than their money is worth, it is effectively being drained away to the benefit of borrowers. We of course know who the biggest borrowers are: the bosses of central banks, their governments. It is this draining of wealth from the private sector into the public sector that is causing the bubbling rage in America. Many know they are getting poorer but don’t know how it happened. Financial repression is the tool that is strangling the American middle classes and after all these years most are none the wiser.” .. explains how financial repression is going to be around for a long time – resulting in economic stagnation .. “The core problem underlying this situation is that ‘financial repression’ is building up ever deeper channels for economic difficulty. While removing the volatility of markets with a ‘curated’ economic reality, it removes one of the key drivers of economic progress, the link between risk and reward.”
