Special Guest: Daniel Amerman – Financial Consultant, CFA, Duluth MN USA
Special Guest: Daniel Amerman – Financial Consultant, CFA, Duluth MN USA
Special Guest: Axel Merk
“In a nutshell, it is ways governments are trying to deprive you of purchasing power because the government has too much debt and must debase the value of the debt.”
“Through the backdoor the government is trying to take some of your net worth …. It is a wealth TRANSFER from savers to those who have piled up a excess debt” “It is most commonly done through negative real interest rates!“
CENTRAL BANK INFLATION GOALS
“You often don’t have enough inflation in the world when you have too much debt”.
This is why the US, the EU and Japan are trying frantically get inflation up, despite it being bad for the average citizen or saver.
Axel Merk believes that if in 10 years we were to get back to historic bond level,s then there would be an addition $1 trillion in government interest rates. The fed is simply not going to allow that and therefore interest rates are realistically not going up.
NEGATIVE REAL INTEREST RATES
Even a Fed Funds Rate of 1.75 next year would likely still mean we would have negative real interest rates.
SOCIAL UNREST & POLITICAL INSTABILITY
“Policy makes never blame themselves for the problems they have. They always blame a minority, the wealthy or foreigners”
When you have too much debt political stability declines. In parts of the world where food and energy are bigger part of their disposable income you can expect social unrest as these inflation policies take on greater roles.
It is a fact that austerity policies fail at the polls as we have seen in Europe. In the US we are electing increasingly more populist politicians which means entitlement reforms have a slim chance of happening. Therefore “Kicking-the-Can-Down-the-Road” and reliance on the central bank to keep rates low.
We have former super powers on the decline and emerging super powers on the rise. We can only hope that this transition will be peaceful. A central banker told Axel prior to his starting his funds that “We can only hope the adjustment process will be slow and gradual”
JAPAN IS AHEAD OF US IN THIS EVOLUTION
“Liquidity has dried up in the JGB market which means that at some point it is easier to have some sort of crisis”
Regulations in general are about barriers to entry. Therefore it limits risk taking which inevitably leads to less economic growth. By simply keeping interest rates low it doesn’t put sufficient pressures on the system for structural reforms. As low interest rate policies continue to fail the political bias will be to “double down” which means the problems get even worse. Eventually the structural changes required becomes too great to be politically possible without hiding behind a major crisis.
SWISS NATIONAL GOLD REFERENDUM
The Swiss are fiercely independent and don’t like the dependencies which the Euro peg to the Swiss Franc are creating. They don’t like the debt an unelected central bank is piling onto the nation. What is important is that the referendum is trying to force more discipline into monetary policy.
WHAT INVESTORS MUST REALIZE
Cash is no longer safe anymore! The purchasing power of cash is at risk. Once investors realize this the investment world is open! They then need to invest based on the risk spectrum.
Special Guest: Doug Casey – Casey Research
“MODERN CURRENCIES ARE FLOATING ABSTRACTIONS”
Developed economies’ currencies “are turning into toilet paper”.
“JAPAN IS A GIANT ACCIDENT WAITING TO HAPPEN!”
“If you are looking for a one way street, perhaps the best speculation in the world today would to be short Japanese government bonds denominated in Yen”. The demographics in Japan are the worst in the world.
“THE EU WILL CEASE TO EXIST“
Its really a horrible conglomeration of countries which should be simply a free trade area with the government in Brussels making it impossible. It is totally dysfunctional and will breakup.
Best-selling author, world-renowned speculator, and libertarian philosopher Doug Doug Casey speaks out on FINANCIAL REPRESSION
Doug sees the world in the “eye of a gigantic financial hurricane”. It entered the hurricane in 2007-2008 and will likely see the next stage in 2015. Here are just some of Doug’s views and statements from this fascinating and exclusive interview with Gordon T Long.
REALISTICALLY SEES WAR AHEAD
“The US is being provocative with its military bases in 125 countries around the world and is provoking the Russians in the Ukraine.” The US is now a country in a continuous state of war. “The US military is out of control.”
“AMERICA DOESN’T EXIST ANYMORE!”
“America has turned into a police state”. It is the most dangerous entity in the world today and has become hated globally because of its militarism.
“THE REAL RISK TO INVESTORS IS ‘POLITICAL'”
US Investors must urgently diversify their assets abroad while it is still possible. More restrictive regulatory policies lie ahead.
US STANDARD OF LIVING & RESPECT IN THE WORLD HAS FALLEN
Today the US is more taxed and regulated than ever before, which limits its abilities to solve its problems.
Special Guest: Mike Pento – Pento Portfolio Strategies LLC
FREE MARKET SYSTEM HAS BEEN COMPLETELY VANQUISHED
WHERE WE ARE HEADED
Special Guest: Tim Price – PFP Group
Tim recalls the words we last heard in the dark days of 2008:
“When you’re a distressed seller of an illiquid asset in a market panic, it’s not even like being in a crowded theater that’s on fire. It’s like being in a crowded theater that’s on fire and the only way you can get out is by persuading somebody outside to swap places with you .”
This is precisely what occurs when the regulatory pressures and un-natural forces of FINANCIAL REPRESSION finally ends
“Financial Repression is government stealing from savers and the future!”
“The single biggest problem of our times economically, is that for the last 40 years there has been an unsustainable buildup of credit expansion throughout the developed world … and we have reached the end of the road new. Every policy by governments and their agents (the central banks) is too a) Kick the Can Down the Road and B) to steal from savers to keep this bandwagon rolling!”
THREE ALTERNATIVE APPROACHES TO ATTEMPT A RESOLUTION:
Approach #1 and #2 or no longer realistically viable, leaving governments with only option #3. The last options has historically always been the option governments of fiat based systems have resorted to throughout the ages because of a lack of “political will and discipline”.
Tim believes Japan is presently the ‘dress rehearsal’ and the rest of the world will be the main event.
Special Guest: John Butler – Amphora
“The whole point of financial repression is to make it difficult or impossible for an investor to protect themselves”
John feels Financial Repression “is now extremely broad based (globally) and in fact you have to look very closely to find countries not actively pursuing some mix of Financial Repression policies.”
A NEGATIVE SUM GAME
Butler has argued in his Amphora Report that competitive currency debasement is “is not a zero sum game but rather a negative sum game because policy makers don’t realize that by trying to devalue against each other, unseen they are undermining the very credibility of unbacked fiat currencies generally.”
Increasing the BRICS are “becoming increasingly wary of where all this is going and as a consequence are diversifying not only their fiat currency reserves but are diversifying into gold, oil fields and real assets generally.”
HOW INVESTORS PROTECT THEMSELVES
“The only free lunch in economics is DIVERSIFICATION. The problem is that in a world of Financial Repression, the way you diversify yourself is very different than a world where financial represion is not an issue.”
“There is no way out but Currency Debasement”
Special Guest: Chris Martenson PhD – PeakProsperity
“When governments get into too much debt there are only so many ways to get themelves out from under the debt.” There is:
In reality, the third is the only politically viable solution. Financial Repression ” the cornerstone involves taking a little from everybody and giving it to a couple of favored parties”. To do this involves three basic elements:
THE COMING CRISIS
True wealth NEVER gets destoyed, it only gets transferred!”
Chris points out that wealth is never destroyed. but rather it is the claims on wealth which are destroyed during a crisis. “A profound currency accident is coming” according to Chris where he “would not be surprised to see the Yen be completel obliterated just like the the Zimbabwe dollar.” His strong recommendations are:
Wealth can no longer be stored in paper currency or “paper” claims in a Fiat Currency System.
Special Guest: Grant Williams
Grant suggests that the dictionary defines repression as essentially about trying to repress true feelings. Financial Repression is the government’s attempt to steer behavior away from true investments and into those that assist the government to pay down its debts.
“The result is essentially outright theft by borrowers from savers. The pool of savings on earth is the last really untapped pool of capital that government has to go after”.
According to Grant the explosion in credit through removal from the Gold Standard, financial engineering and keeping interest rates low has left a differential between Credit Growth and GDP that has forced governments with no choice but to adopt Financial Repression policies. By debasing their currency and through inflation government create the most insidious type of wealth transfer that most people just don’t understand.
Special Guest: Nick Barisheff – President & CEP, Bullion Management Group Inc.
Nick Barisheff suggests that to protect yourself from government Financial Repression policies, a diversified portfolio with a strategic allocation of 20% in precious metals is presently merited. The Precious Metals allocation should be diversified in physical holdings between gold, silver and platinum.
Nick argues that China is closer to 5000 tons of gold than the 1000-1700 currently reported by official sources. When this all becomes properly understood it will send shock waves through the system!
Barisheff believes China is acquiring physical Gold in its Sovereign Wealth Fund which doesn’t have to report it to anyone. The last time they did the Chinese Central Bank Gold Reserves went from 800 to 1600 tonnes. They haven’t reported in five years. During this 5 years Nick argues the gold is coming from Leased Gold. There has been approximately 1500 tonnes per year in net leasing over the last 10 years.
Special Guest: Mike (Mish) Shedlock – MISH’S Global Economic Trend Analysis
Special Guest: Douglas E. French – Author, Past President of the Ludwig von Mises Institute and noted Casey Research Contributor
“The biggest bubble we have is US Treasuries. The believe you can’t get hurt is a quality you always see in a bubble. The idea that lending an entity, that is $17T and going to $18T and beyond in debt, and will never be able to pay that back and the idea that you will get 2.5% for 10 years and it is ‘return free risk’ is certainly bubble territory!“
“You have PhD’s at the Fed trying to create economic growth with inflation and low rates. The repression is that people like you and I won’t ever be able to retire because we won’t be able to get any return on our money so we can prop up the government and keep it in business.”
This is the overall Macro Strategy of the government but central planning has never worked! ….. They are essentially trying to print their way out of a jam! ……. Because of Financial Repression almost ¾ Trillion dollars has gone to the government that should be in private hands!!!”
FRENCH WARNS INVESTORS
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)”.
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!”