09/08/2014 - FINANCIAL REPRESSION THROUGH SHRINKFLATION
Financial Repression Using Shrinkflation: “As ‘shrinkflation’ becomes no longer viable, it will soon reveal itself in the form of higher consumer prices. And with central banks around the world creating inflation as a policy measure so as to inflate away the world’s massive debt pile, the question remains as to whether the central banks will be able to control this deliberately induced inflation in an environment where ‘shrinkflation’ no longer works.”
– Pippa Malmgren
09/07/2014 - FINANCIAL REPRESSION BY THE STATE: GOVERNMENT PUNISHES SAVERS TO SUPPORT DEBTORS
“The entire problem we face going ahead stems from the very idea of Karl Marx that government is capable of managing the economy either through communism or autocratic-socialism where the state dictates to the economy under the pretense of caring for the people, that has truly become a derivative of fascism where the state comes first. This is even reflected in the conviction rate .. that has risen from 72% in the 1970s to virtually 99% today eliminating fair trials. We also see it taking shape in the militarization of the police that actually do not protect society, but rather protect the state from the people .. This is autocratic-socialism where the state pretends its abuse of the people is for their benefit when in fact there is always a profit that falls to them ..Savers are being exploited by government under the pretense of managing the economy. You see many retired people back in the work force doing service jobs because they can no longer earn income on their savings for life. Savers receive no return on their life savings because central banks punish savers and subsidize the debtors assuming that borrowing is required for economic growth. This core assumption that government even possesses the mental capabilities to manage the economy is extremely dangerous for it then creates a fascist state where society is supposed to worship the state as all-knowing and caring where its survival takes precedent over the individual.”
– Martin Armstrong
09/06/2014 - FINANCIAL REPRESSION IS ABOUT CONVINCING A CAPTIVE AUDIENCE OF BUYERS TO HOLD GOVERNMENT DEBT AT VERY LOW YIELDS
“Merely setting interest rates below inflation, however, won’t fully achieve the desired result. The second part of financial repression is convincing a captive audience of buyers to hold government debt at exceedingly low yields. This can be done through the regulation of banks and pensions, capital controls, and good old-fashioned arm twisting…It isn’t hard to find examples of these tactics. The Basel III regulations give banks strong incentives to hold sovereign debt to satisfy their capital requirements. Ireland has pressed their National Pension Reserve Fund into service purchasing government securities and recapitalizing their banking system. Japan Post, the world’s largest pension plan, continues to buy JGBs apace.”
– “Financial Repression: Why It Matters”, Shane Shepherd, Research Associates , April 2013
LINK HERE to the article with additional quotes also
09/05/2014 - FINANCIAL REPRESSION LIKELY TO BE AROUND FOR A LONG TIME
Dutch economists Sylvester Eijffinger & Edin Mujagic see western countries implementing policies aimed at reducing or at least slowing down the level of public debt .. “In times of slow economic growth, policymakers’ options are grim .. many Western policymakers are seeking alternative solutions – many of which can be classified as financial repression .. Financial repression occurs when governments take measures to channel to themselves funds that, in a deregulated market, would go elsewhere. For example, many governments have implemented regulations for banks and insurance companies that increase the amount of government debt that they own.” .. this can be done through regulations like Basel Accord which require banks to set aside enough cash to handle unexpected events – the cash is encouraged to be in the form of government bonds .. also another mechanism of financial repression: “Western central banks are using another kind of financial repression by maintaining negative real interest rates (yielding less than the rate of inflation), which enables them to service their debt for free.” .. also there is the mechanism of raiding pension funds: “In many countries, including France, Ireland, and Portugal, governments have raided pension funds in order to finance their budget deficits. The UK is poised to take similar action, “allowing” local government pension funds to invest in infrastructure projects.”
09/04/2014 - EUROPEAN CONFERENCE IN VIENNA ON FINANCIAL REPRESSION – from late last year but still relevant
“We are now in an age of financial repression and, as observed by Edin Mujagic, an academic on the matter from Tilburg University, “we have moved into a new stage where we are setting up institutions specifically created for financial repression.” .. Financial repression causes all savers – institutional as well as individual — to lose money. In short, “individual savers are being punished for doing the right thing whereas the people responsible are not” .. 9 minutes
09/03/2014 - FINANCIAL REPRESSION IN ACTION “SAFEGUARDS” BLATENTLY CORRUPTED
The Federal Reserve, under pressure from lawmakers and state officials, is considering allowing banks to use certain types of municipal debt to satisfy a new postcrisis financing rule.
U.S. regulators are expected to finalize safeguards requiring that banks hold enough liquid assets—such as cash or those easily convertible to cash—to fund their operations for 30 days if other sources of funding aren’t available. Municipal securities issued by states and localities wouldn’t count as “high-quality liquid assets” under the rule, meaning such securities wouldn’t qualify for use under the new funding requirements.
States and localities have warned that excluding their securities could cause banks to retreat from a $3.7 trillion market in which they have increasingly become an important player, which could driving up borrowing costs to finance roads, schools and bridges. Banks have nearly doubled their ownership in municipal securities over the past decade to more than 11%, according to Fed data.
HOW DOES THIS PROTECT THE PUBLIC
WHEN MUNICIPAL DEBT IS THE PROBLEM?
MUNICIPAL DEBT IS THE PROBLEM!
09/03/2014 - Egon von Greyerz with the FRA
A former banker, Corporate Vice Chairman of a FTSE 100 corporation and founder of Matterhorn Asset Management AG, Egon von Greyez “strongly believes there will be massive wealth destruction in the next few years”.
Von Greyerz personally defines Financial Repression in practical terms as the “manipulation and interference by government in the running of the economy and the lives of normal people”. What this will inevitably lead to he feels will be the “total control of the people and a police state – that is the way we are going in some countries!”
He has been worried about what is presently unfolding since the 1980’s and is very troubled about what he has witnessed and what he clearly saw was coming. “All this was inevitable. It is ridiculous for the central bankers to say they didn’t see this coming. Anyone with just a little bit of intelligence could have seen this coming (of course you can’t be a politician who never see things coming and central bankers are politicians)”.
09/02/2014 - Financial Repression is in preparation for the inevitable that is now clearly visible.
FINANCIAL REPRESSION IS
THE ONLY SOLUTION
(FROM THE GOVERNMENT’S PERSPECTIVE)
How will these deficits be financed when the present budget debates causes such Congressional wrangling & gridlock?
09/01/2014 - Surviving The Age of Financial Repression
Mark Yusko, founder and CEO of Morgan Creek Capital Management, shares his perspective on how institutional investors make money during gloomy economic times at Thomson Reuters‘ PartnerConnect East conference– conference last year, but principles still applicable .. If you invested $10 million in U.S. Treasuries seven years ago, you could expect an annual return of $480,000, but today you see a return of just $24,000 a year, Yusko points out .. “In this age of financial repression, we have to think differently about how we invest .. Surving the Age of Financial Repression.”
08/31/2014 - Federal Reserve Vice Chairman Says U.S. Preparing Bank Bailins
“The Great Recession is a near-worldwide phenomenon, with the consequences of which many advanced economies continue to struggle. Its depth and breadth appear to have changed the economic environment in many ways and to have left the road ahead unclear .. Work on the use of the resolution mechanisms set out in the Dodd-Frank Act, based on the principle of a single point of entry–though less advanced than the work on capital and liquidity ratios–holds the promise of making it possible to resolve banks in difficulty at no direct cost to the government .. As part of this approach, the United States is preparing a proposal to require systemically important banks to issue bail-inable long-term debt that will enable insolvent banks to recapitalize themselves in resolution without calling on government funding–this cushion is known as a ‘gone concern’ buffer.”
– Federal Reserve Vice Chair Stanley Fischer
LINK HERE to the article
08/30/2014 - Renunciation of U.S. Citizenship About To Get More Expensive: From $450 to $2350 America’s Corralito Tightens
With an exponentially increasing number of Americans & U.S.-based companies renouncing their citizenship, the U.S. State Department is now looking to raise the cost of renunciation from U.S.$450 to U.S.$2350on individuals .. [Cliff Note: Expect similar regulations or rule changes soon to keep U.S. corporations from renouncing their citizenship through overseas corporate inversions, like what Burger King is doing now .. America’s corralito tightens .. ]
08/29/2014 - For the first time in history, (based on FRED data), the 30Y constant maturity yield is below the real GDP growth level.
FINANCIAL REPRESSION IS
COMPLETELY DISTORTING
THE PRICING OF BOND RISK
(The RISK is in FIAT US$ CURRENCY)
08/29/2014 - Jeff Berwick – Financial Repression
The founder of the well recognized Canadian web site Stockhouse Media Corporation and CEO until 2002, Jeff Berwick says “around 2003 I woke up and started studying and learning (and I am still doing that to this day) and the more you learn the deeper this ‘rabbit hole’ gets! We are living under a financial system that is completely not real! People are going to find this out pretty soon!”
Berwick defines Capitalism as “the free voluntary transactions of human beings where every transaction improves the lives of eveyone. They (government) have been portraying capitalism as evil.”
Because of this the future suggests to Berwick that ” whoever loses the least over the next decade, will win the most! It is going to be a game of not losing everything.”
“We are going to go through the ‘Great Transition’ in the not to distant future which the internet will facilitate and which could potentially be the saviour of humanity. The real issue over the next few years is trying to get enough people to understand what is wrong about this world and what could be right about it. Then let the people decide”
His recommendation for Americans who he believes ‘are the most asleep people in the world (from his perspective living outside America), is to “put your assets into hard assets that Janet Yellen can’t counterfeit into obscurity.”
FINANCIAL REPRESSION in Jeff Berwicks words:
“Financial Repression all started in 1913 with the foundation of the third central bank of the US, the Federal Reserve. Income tax came into existance with the same act which people should find interesting! …. The Repression as you call it (Oppresssion as I call it) of the Central Banking, Communist System has been hidden from people because of a tremendous amount of productivity…. the government and bankers tell people things are good because of them – in actuality things are worse because of them – a lot worse. Hardly anyone sees this…. they have taken away from the true human potential.”
The answer is that “we need an awakening where people begin to realize what is going on and move beyond this really horrible system of statist, communists, central bankers, fiat currencies and go to a solid money (like precious metals and bitcoin) and allow the markets to make decisions”.
“People need to wake up, turn off their TV (it is literally ‘programming’) and start listening to real information. People need to break free from these chains. If they don’t, unfortunately they will get hurt in this coming “Great Transition”. As in life someone always has to pay for mistakes and some people are ging to pay more than others. We are unfortunately all going to have to pay. It is going to be a dramatic period and incredibly stressfull…. America is going to be ground zero for this transition “
“There is going to be a great evolution in everything we know today in the next decade. It is going to be biblical in proportion. The sooner you start to look into these things (whether gold, silver, real estatre, bitcoin) the better”
08/28/2014 - WHAT WEALTH CONFISCATION MAY LOOK LIKE FOR AMERICANS
“Would the U.S. government really turn to a 1933-style gold grab again? .. I would argue that they wouldn’t, but that doesn’t mean the threat to your gold has diminished .. If the government is looking to confiscate wealth, they’ll likely go for the low-hanging fruit like financial accounts, which can be plundered with a few mouse clicks. Or they’ll continue to ramp up the inflationary money printing, which is a way to confiscate from savers .. If and when an executive order is issued to convert a portion of your retirement savings into unwanted Treasury securities, it will likely apply only to the most susceptible retirement assets — those being accounts with the large, traditional IRA custodians. These assets are soft targets for the government. They could be frozen, confiscated, or nationalized at the flip of a switch.”
– Nick Giambruno, Senior Editor InternationalMan
LINK HERE to the article
08/27/2014 - FINANCIAL REPRESSION REQUIRED TO PAY GOVERNMENT DEBTS & UNFUNDED OBLIGATIONS
MONEYWEEK.COM article points out the worse things get on the European financial/economic crisis, the more pressure there is on the European Central Bank (ECB) to print money
– stocks will likely go up as this happens on the anticipation that the ECB will given in & start money printing
.. “TheECB would print money and use it to buy eurozone government bonds, in order to prop up the region’s banking sector, and to encourage more risk-taking by lenders and investors. Of course, any hint of more money-printing always cheers the market, and European stocks reacted well to the news.”
.. the article points to how U.S. & UK stocks have similarly reacted positively on all the money printing
.. whether all this money is good for the economy or whether it even benefits the economy in any positive way is another question
.. in terms of investing, the article suggests sticking with countries that are looking to do more money printing & that have relatively inexpensive stock markets, such as Europe or Japan
.. the article emphasizes the approach of financial repression taken by the U.S. & UK in keeping interest rates down & allowing inflation to rise in order to pay off some government debt via inflation, rather than by defaulting or cutting back spending
.. most western world governments are in this bind, so that “we could see interest rates staying lower than markets expect for some time. And in the longer run, we could see a lot more inflation than we’ve been used to as well”
08/26/2014 - Emerging Pattern of Wealth Confiscation – Russia Confiscates Private Retirement Savings Businessweek reports that earlier this month, the Russian government seized its citizens’ pension contributions – 6% of Russians’ salaries is invested in financial markets, earmarked for their retirement, but this year that $8 billion in contributions will finance Russian spending instead .. “Russia is not the first country to confiscate pension assets to pay its bills, and it probably won’t be the last .. For governments facing financial pressure, billions of dollars of pension assets proved too tempting to resist.” .. Argentina recently “nationalized” $30 billion of pension assets & Hungary, Poland, Portugal, & Bulgaria have done the same ..
LINK HERE to the article
“In most countries, it’s extremely unlikely that the government will outright seize pensions. In America, it’s nearly impossible to change Social Security or Medicare benefits, and the idea of the U.S. government confiscating everyone’s 401(k) is unimaginable to all but the most ardent conspiracy theorists.
However, it’s not unrealistic to think that the American government could take a bigger bite out of individuals’ 401(k) assets with higher tax rates: Income taxes are at historic lows, and if the American government needs to raise revenue in the future, taxes on 401(k) withdrawals may be higher (along with taxes on everything else).
08/25/2014 - Emerging Pattern of Wealth Confiscation – Is Portugal Next?
Casey Research’s Nick Giambruno sees an emerging pattern of wealth confiscation globally, identifies Portugal as a likely next country candidate in this regard .. “It starts out with government officials telling you everything is all right—when clearly everything is not all right.” .. here is a summary of the pattern:
1. COUNTRY GETS INTO SERIOUS FINANCIAL TROUBLE
2. OFFICIAL GOVERNMENT DENIALS
3. SURPRISE BANK HOLIDAY/CAPITAL CONTROLS
4. CONFISCATION
Portugal is clearly at the first stage in the pattern—serious financial trouble .. recommends taking your money out of Portuguese banks while you can .. “When it comes to protecting yourself from confiscations, capital controls, bank holidays, and other desperate measures of an out-of-control government, it’s absolutely essential to take action before it’s too late .. While the window is still open for those in the U.S. to protect themselves, the warning signs are clearly there. And the writing is on the wall.” .. another example of financial repression.
08/24/2014 - A New Confiscation To Worry About? “‘Since the financial crisis, the world’s central banks have collectively put more than $10 trillion into the financial system. This kind of money printing is literally unheard of in modern history. And it has set the stage for a roaring wave of inflation.’ — Graham Summers, analyst .. With the world in a deflationary recession, I now doubt we’ll see new highs in the D-J Averages. But with enough QE, it might be possible .. With deflation enveloping the world, investors have been racing to buy Treasury bonds, whose yields have sunk to record lows. My survival choice in investments continues to be silver and gold .. Today it finally happened: I received an advertisement from a firm featuring a scare I’ve been waiting for. There are two ways for the government to handle its outrageous debts. The first is reneging, as per Argentina, but this is unthinkable. The second way is via inflation — inflate enough and your debts appear to shrink. Ah, but there’s a third way, and it’s confiscation of wealth. Don’t think this is impossible, because governments will do whatever they have to to remain in power. How about confiscating all individual wealth above $200,000, for which the government will give you stubs which will say IOU. This will be a switch on the 1933 confiscation of gold. This time it may be confiscation of cash. Finally, something new to worry about.” .. it’s default or financial repression, take your pick.
– Richard Russell*
08/21/2014 - FINANCIAL REPRESSION INCENTS BANKS INTO.. NOT THE RETAILING OPERATIONS OF MAKING (EXPENSIVE) SMALL BUSINESS LOANS!
Small Business has historically been the life blood of America.
It no longer is for a consolidated banking industry.
THE BANKING INDUSTRY
IS NO LONGER EFFECTIVELY
SERVING AMERICA!
08/20/2014 - PRIOR TO FINANCIAL REPRESSION IN AMERICA
Government Policy was about:
“positively incenting & directing actions”
Government Policy is now about:
“negatively forcing & impeading actions”
READ: Treasury Officials Prepare Options to Address Inversions 08-19-14 WSJ
Treasury Department officials are assembling a list of administrative options for Secretary Jacob Lew to consider for ways to deter or prevent U.S. companies from reorganizing overseas primarily to avoid paying federal taxes
Some Democrats in Congress believe lawmakers should pass a stopgap measure to deter companies from pursuing the deals, while some Republicans have said the only way to stop inversions is through an overhaul of the tax code.
others believe the White House has ample flexibility to step in and have raised different ideas for administrative actions, including
FINANCIAL REPRESSION IS ABOUTREGULATIONS
FORCING BEHAVIOUR
versus
REWARDING BEHAVIOUR
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