FINANCIAL REPRESSION IS AGGRESSIVELY BEING IMPLEMENTED TO STOP FALLING REAL US GROWTH RATES
BEFORE DEBT IMPLODES FROM BEING
UNPAYABLE & INEXTINGUISHABLE
Blog
07/16/2014 - FINANCIAL REPRESSION IS AGGRESSIVELY BEING IMPLEMENTED TO STOP FALLING REAL US GROWTH RATES
07/15/2014 - FINANCIAL REPRESSION HELPS IBM HIDE THIS
“In 2004 IBM had $13 billion of net debt. Today the figure stands at just under $37 billion. And why not. IBM’s average weighted cost of debt last year was just shy of 1%.Thank you, monetary politburo!”David Stockman – Former Director OMB
“Under a honest free market in the financial sector, America’s once greatest technology company would not be functioning as a slush fund for Wall Street gamblers“ David Stockman – Former Director OMB
The Fed’s Financial Repression At Work: How Big Blue Was Turned Into A Wall Street Slush Fund 07-18-14 David Stockman
IBM is a poster child for the ill-effects of the Fed’s financial repression. In effect, the Fed’s zero interest rate policies are telling big companies to issue truckloads of debt and use the proceeds to buyback shares hand-over-fist. That way fast money speculators on Wall Street are appeased by the resulting share price lift, and top executives collect bigger winnings on their stock options.
In its recently completed quarter, IBM again repurchased nearly $4 billion of stock—which amounted to about 93% of its net income for Q2. Likewise, IBM also reported lower sales versus prior year for the ninth quarter in a row READ MORE
07/13/2014 - Causing Inequality through Increasing Property Taxation
The Coming US “Tax Overhaul” Has a Different Goal In Mind than the Public Thinks!
RESEARCH STUDY: THE EFFECT OF RISING INCOME INEQUALITY ON TAXATION AND PUBLIC EXPENDITURES: EVIDENCE FROM U.S. MUNICIPALITIES AND SCHOOL DISTRICTS, 1970–2000
INCREASED LOCAL PROPERTY TAXATION IS COMING AS FINANCIAL REPRESSION TRANSFERS DEBT TO RESIDENTIAL OWNERS
Municipal spending is rising alongside Inequality
Because most cities don’t have the power to tax income, they usually use property and sales taxes, which tend to hit all residents or fall more heavily on those who are middle class or lower income. As in Scandinavia, people are paying for their own increased services.
The increase in income inequality experienced by the typical city is associated with an $88 increase in expenditures per resident on top of the $900 per resident on local services spent by the typical city each year. The additional $88 of funds are allocated across the board to cover police services, fire protection, road maintenance, education, and more.
READ MORE: Inequality Is Forcing US Towns To Try Scandinavia-Style Taxation — And It’s Working 07-13-14 BI
07/11/2014 - Modern Financial Repression Grounded
Circulation credit means that banks lend money, and thereby expand money supply, without backing them by real savings (or reduction of consumption). This circulation credit is creation of money “ex nihilo”. Booms as well as busts are damaging because they slow down long-term investments with the consequence that resources in fluctuating economies are lacking.
According to Mises, the problem is not low consumption but low saving.
Why Fiat Money Is “A Large-Scale Fraud System” 07-11-14 Ryan McMaken of Mises Economic blog,via ZH
The Center for Financial Studies in Frankfurt reports on a recent talk given by Thorsten Polleit:
READ MORE: Thorsten Polleit on the “planned chaos” of money
A Core Tenet is the De-Incentive & Discouragement of SAVINGS
We had CAPITALISM:
SAVINGS was reinvested as CAPITAL INVESTMENT
We now have CREDITISM:
CREDIT is created and spent on CONSUMPTION
According to Mises, the problem is not low consumption but low savings
07/02/2014 - Expropriation is Back on the Policy Table as Global Economic Woes Worsen
Expropriation Is Back on the Policy Table as Global Economic Woes Worsen – Martin Armstrong of Armstrong Economics,
I have gone on record that the most dangerous organization is the now French led IMF with Christine Lagarde at the helm, which has presented a concept report that debt cuts for over-indebted states are uncompromising and are to be performed more effectively in the future by defaulting on retirement accounts held in life insurance, mutual funds and other types of pension schemes, or arbitrarily extending debt perpetually so you cannot redeem. Yes you read correctly, The new IMF paper is described in great detail exactly how to now allow the private sector, which has invested in government bonds, to be expropriated to pay for the national debts of the socialist governments.
I have been warning that there is an idea that has been running around behind the curtain that the national debt of the USA could be settled by usurping all pension funds in the country. Here is a remarkable blueprint that throws all previous considerations concerning the purchase of government bonds over the cliff. The IMF working paper from December 2013 states boldly:
Is Christine Lagarde The Most Dangerous Woman In The World?
07/02/2014 - Regulators Ready Money-Fund Rules
Regulators Ready Money-Fund Rules 07-10-14 WSJ
FINANCIAL REPRESSION REGULATIONS WILL PREVENT YOU FROM EXITING YOUR MONEY MARKETS (CASH) AT TIME OF TURMOIL
SEC Vote Could Come as Early as This Month
Money funds are cash-like instruments used by millions of individuals, businesses and municipalities to safely park cash.
The plan would allow money funds to temporarily block investors from withdrawing their money in times of stress, or require a fee to redeem shares.
Other regulators, including members of the Financial Stability Oversight Council, have said such redemption restrictions could spur, rather than curb, investor stampedes.
Yellen called for what she termed:
“A more robust macroprudential approach.”
In fact she used that word macroprudential no fewer than29 times. For those not fluent in Fedspeak, what she meant is that we can deal with financial instability through increased regulation procedures
Monetary Policy and Financial Stability – Remarks by Janet L. Yellen Chair Board of Governors of the Federal Reserve System
The 2014 Michel Camdessus Central Banking Lecture International Monetary Fund Washington, D.C.
July 2nd, 2014
In closing, the policy approach to promoting financial stability has changed dramatically in the wake of the global financial crisis. We have made 
considerable progress in implementing a macroprudential approach in the United States, and these changes have also had a significant effect on our monetary policy discussions. An important contributor to the progress made in the United States has been the lessons we learned from the experience gained by central banks and regulatory authorities all around the world. The IMF plays an important role in this evolving process as a forum for representatives from the world’s economies and as an institution charged with promoting financial and economic stability globally. I expect to both contribute to and learn from ongoing discussions on these issues.
-
*YELLEN: `WE HAVE MUCH TO LEARN’ IN MACROPRUDENTIAL OVERSIGHT
-
*YELLEN: MACROPRUDENTIAL RULES SHOULD BE MAIN STABILITY DEFENSE
-
*YELLEN: STABILITY BEST PROMOTED BY MACROPRUDENTIAL OVERSIGHT
The Yellen “Resilience” Doctrine Is Dangerous Keynesian Blather 07-04-14 David Stockman of Contra Corner blog,
07/01/2014 - Jim Rickards – Financial Repression on Retirees & Savers
Excerpt from Jim Rickards’ submitted testimony as a witness in the Senate Banking Committee’s Subcommittee
LINK HERE to download the testimony
“The principal victims of the Fed’s policies are those at or near retirement who face a Hobson’s Choice of gambling in the stock market or getting nothing at all. A summary of these deleterious effects on retirement income security, explained in more detail below, includes the following:
1. Increasing income inequality. Zero rate policy represents a wealth transfer from prudent retirees and savers to banks and leveraged investors. It penalizes everyday Americans and rewards bankers, hedge funds and high-net worth investors.
2. Lost purchasing power. Zero rate policy deprives retirees and those nearing retirement of income and depletes their net worth through inflation. This lost purchasing power exceeds $400 billion per year and cumulatively exceeds $1 trillion since 2007.
3. Sending the wrong signal. Zero rate policy is designed to inject inflation into the U.S. economy. However, it signals the opposite – Fed fear of deflation. Americans understand this signal and hoard savings even at painfully low rates.
4. A hidden tax. The Fed’s zero rate policy is designed to keep nominal interest rates below inflation, a condition called “negative real rates”. This is intended to cause lending and spending as the real cost of borrowing is negative. For savers the opposite is true. When real returns are negative the value of savings erodes – a non-legislated tax on savers.
5. Creating new bubbles. The Fed’s policy says to savers, in effect, “if you want a positive return invest in stocks.” This gun to the head of savers ignores the relative riskiness of stocks versus bank accounts. Stocks are volatile, subject to crashes, and not right for many retirees. To the extent many are forced to invest in stocks, a new stock bubble is being created which will eventually burst leaving many retirees not just short on income but possibly destitute.
6. Eroding trust and credibility. Economics has been infused in recent decades with the findings of behavioralists and social scientists. While this social science research is valid, the uses to which it is put are often manipulative and intended to affect behavior in ways deemed suitable by Fed policy makers. This approach ignores feedback loops. As retirees realize the extent of market manipulation by the Fed they lose trust in government more generally.
The Fed has resorted to repetitive bouts of cheap money for extended periods. This monetary ease has found its way into inflated asset values that in turn provided collateral for debt-driven consumption. These binges drove the economy until the inevitable asset bubble collapses caused a contraction in consumption and launched another cycle. At no time were savers rewarded for prudence.”
07/01/2014 - The Global Hunt for Taxes
The Global Hunt for Taxes IceCap
IMF’s Recommendation for a Global Wealth Tax
“A sharp deterioration of the public finances in many countries has revived interest in a “capital levy” – a one-off tax on private wealth – as an exceptional measure to restore debt sustainability”
04/29/2014 - John Rubino on Financial Repression
04/23/2014 - Gordon T Long on Financial Repression
