11/19/2015 - FRA’s Gordon T Long Is Interviewed By Dan Popescu On Financial Repression
Discussion between Dan Popescu & Gordon T Long .. Financial repression & interest rates .. Deflation, inflation or hyperinflation .. The currency wars and the dollar: up or down? .. Gold & Silver: an insurance policy .. Banning cash & the cashless society .. China gold, yuan & the SDR .. 25 minutes
LINK HERE to the French version of this
11/01/2015 - Financial Repression – The Unintended Consequences
“Financial repression is not a conspiracy theory, it is rather a collective set of macroprudential policies focused on controlling and reducing excessive government debt through 4 pillars – negative interest rates, inflation, ring-fencing regulations and obfuscation – to effectively transfer purchasing power from private savings.” – The Financial Repression Authority
11/01/2015 - The Era of Financial Repression: Norway’s Sovereign Wealth Fund says Monetary Policy is a Risk to Watch
“Monetary policy does affect pricing in today’s market to such an extent that monetary policy itself has been a risk you have to watch .. Investors are focused more on monetary policy changes than has been generally the case, than at any time, as far as I can remember .. As anything that moves prices is a risk that has to be monitored, here the effects of monetary policy affect prices dramatically .. It’s of course always been the case with long rates, and now more significantly with the currency. That’s just a fact of the current market.”
– Yngve Slyngstad, chief executive officer of Norway’s $890 billion sovereign-wealth fund
“Financial repression is not a conspiracy theory, it is rather a collective set of macroprudential policies focused on controlling and reducing excessive government debt through 4 pillars – negative interest rates, inflation, ring-fencing regulations and obfuscation – to effectively transfer purchasing power from private savings.” – The Financial Repression Authority
06/27/2015 - Entire Discussion Now Available for FREE – Real Vision TV – THE RESET Watch Raoul Pal & Grant Williams Talk Financial Repression Global Macro Investor’s Raoul Pal and Vulpes Investment Management’s Grant Williams discuss essentially what we have classified as the 4 pillars of financial repression: repressed interest rates, forced inflation, obfuscation and ring-fencing regulations. The terms they use are a bit different, but the basic concepts are the same.
They discuss the systemic risks to the financial system including the loss of faith in money itself. They explain how massive money printing has distorted financial markets and prices worldwide, especially through the suppression of bond yields by central bank policies.
They also discuss their suggested solutions to investing in this environment – physical gold held outside of the financial system, cryptocurrencies, assets held outside of the concentration of risk in the financial system, investments in the monsoon regions of the world.
This is a fascinating must-watch discussion which will help you understand what is currently happening in the financial markets, the banking system, the investment world and the global economy.
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06/21/2015 - Paul Brodsky Talks Financial Repression
Special Guest: Paul Brodsky – Investment Strategist, Wall Street Veteran
Paul Brodsky introduced himself as a presenter at the Park Plaza Hotel (NYC, NY) to 200 of the world’s largest Institutional Investors from large Sovereign Wealth Funds, Pensions Funds, Endowments and Foundations …. “I’m Paul Brodsky, I’m a Gold Bug!” This not only took guts but serious credibility in front of an audience that doesn’t consider gold in their portfolio allocation decisions. So why would he do this?
Paul had been asked to present the “Case for Gold”. It was 2010 and Gold had just had a run. Though Gold had been the elephant in the room for previous 9 years , Paul surmised the organizers simply felt gold needed some sort of obligatory representation. His presentation focused on the Global Monetary System and sheepishly admits he actually never mentioned the world Gold again! This summarizes the thinking within the community of Global Managers of serious money.
Paul says he felt he got the invitation because of the thrust and struggle of QB Asset Management, the hedge fund he co-founded. It showed in Paul’s writings to QB’s clients while seeking the truth. He sought an understanding of Price and Value (which are often quite different) in addition to Alpha generation for clients.
FINANCIAL REPRESSION
“Its easy to think there is a grand conspiracy out there is terms of the banking system, the policy makers and politicians in the political dimension. It is very easy to draw lines between all these groups connecting them. I think what we have is a natural set of incentives that are drawn together by how the system works. For example, Politicians usually like to spend money they don’t have and the banking system can let them do that! So it is a very symbiotic relationship – one feeds the other – there is little need that a word be said! There is no back room, smoke filled discussions going on.”
“After the 1971 Nixon Shock, for the first time ever we had a global monetary system where there wasn’t one currency that was ‘hard’ – that is, backed by anything scarce. What that did was make everything relative. It made currencies relative and it made financial assets relative. Ultimately it made performance relative!”
“When everything becomes relative it makes thing very easy for authorities to manage the system because there is no governor on them to bring things back into balance!”
“What was once “the role of the Fed to take away the punch bowl when the party got going”, it was now the Fed that was ‘spiking’ the punch bowl.”
FRACTIONAL RESERVE BANKING
“The system as it is constructed using fractional reserve lending and fractional reserve banking is the real ‘bugaboo’!” Paul is quick to point out there are two sides to this argument. “Yes, the hard money crowd is correct – it has allowed us to spend money beyond what may be considered sound, but also this “funny money” for example helped defeat communism and helped fund the dotcom frenzy which left a technology footprint that may not have occurred as quickly without it.”
“It has been a terrible flowering of baseless credit, debt that has never been extinguished. It may all come down in a Minsky like debt deflation that is ugly – or it may force the Fed and other central banks around the world to create much more base money through QE and other lines of credit that diminishes the value of not only our currency but all others – that gets us back again to relative value and performance!”
“The central banks are devaluing their currencies and devaluing against themselves in a ‘tag team’ manner. They are also devaluing against Production. There used to be only four ways you could get a dollar. You could produce something, you could borrow it, you could reinvest what you had already earned or you could steal it. Now banks can make money out of thin air without any discipline. There is nothing on the other side. Debt is created through the loan process and it never has to be extinquished if the monetary authority doesn’t demand that.”
“We have gone through this great leveraging over the last 35 years. It has been encouraged by Monetary Authorities in the US and elsewhere. Now we are at zero interest rates we can’t refinance ourselves to another round of leveraging. We have to find a new outlet for credit or there is going to be some sort of reconciliation. When you ask about Financial Repression, I think it has been forced on Monetary Authorities (though its their own doing). It had to happen. It is a consequence of the past 35 years.”
“I think they are boxed, as is everyone else (like the IMF) that is involved”
WHO IS GOING TO STAND UP TO THIS?
“It is also in China and Russia’s interest to have a baseless currency and even fractional reserve banks. What it does is centralize power to decide what wealth looks like in their nations and economies.”
“My sense is we have to accept that this is the reality. That for the first time ever …. I think there is going to be increasing coordination amongst all sorts of Monetary Authorities and the net loser is going to be the saver or pensioner in real terms. It is not necessarily a negative on equities, real estate or anything that relies on credit. It may be bullish on nominal pricing but bearish on real pricing and value. That is what Financial Repression is bring us.”
…. there is much, much more in this broad ranging 46 minute interview with a very thoughtful and experienced Wall Street insider telling it the way it really is:
06/20/2015 - How Financial Repression is Making it Difficult to Retire
Charles Hugh Smith & Gordon T Long discuss the unsustainability of pension funds for U.S. public employees, the challenges of ordinary retirees to be able to retire given the financial repression on interest rates & low yields .. while everyone is beginning to agree that most people will not be able to retire, but must keep working, many do not realize that there are already “means-testing” in place for the U.S. social security benefits because if you & your spouse keep working & make at least $44,000 per year, your U.S. social security retirement benefits will be reduced by 85%! .. 26 minutes
06/19/2015 - Financial Repression Obfuscation: Measuring Inflation
Wall St For Main St interviews financial expert Ed Butowsky created the Chapwood Inflation Index to better accurately measure inflation in the U.S. compared to the Bureau of Labor Statistics’ Consumer Price Index (CPI) .. discussion on the problems with the CPI and why it no longer measures inflation accurately .. an example of obfuscation – one of the pillars of financial repression .. 29 minutes
06/15/2015 - Swiss Re Meeting: “Sounding the Alarm on Financial Repression”Swiss Re video highlights the recent meeting they held with experts voicing concerns about the ongoing use of unconventional policies .. financial repression is causing financial market distortions & poses a serious risk to financial stability .. These unconventional policies have pushed institutional investors into holding government debt. As a result they have less money available for productive investment, such as infrastructure projects .. “It means that there’s a global search for yield. That possibly leads to a misallocation of resources,” says Douglas Flint, Group Chairman of HSBC .. Jean-Claude Trichet, Chairman of the Group of Thirty affirms the risks.
06/14/2015 - Financial Repression: The War on Cash will Accelerate in the next 6 Months
Greg Hunter interviews Gordon T Long .. “We have run out of runway, but never underestimate the ingenuity of a trapped politician and central bankers to come out with new policies and new ways to extend this. We are going to see some pretty violent volatility and corrections. We are going to be in there guaranteeing collateral because our issue is . . . there is a shortage of collateral. The Fed sucked all of the bonds out of the market. There is a shortage of them. So, we have a major liquidity problem. That’s the runway we are running out of, and flows are starting to slow dramatically. Now, that says it’s getting unstable, but that doesn’t mean the world is coming to an end. It does mean we are going to do something else, and one of those things is negative nominal rates and cashless society. That’s the reason why we are going to have a cashless society. You are going to see this (cashless society idea) accelerate in the next six months.” .. 30 minutes
05/17/2015 - One of the 4 Pillars of Financial Repression: Data Obfuscation
Dr Pippa Malmgren, a former U.S. Plunge Protection Team member, explains how governments fudge price inflation numbers .. It’s one of the pillars of financial repression – obfuscation.
05/01/2015 - Obfuscation – One of the 4 Pillars of Financial Repression
Alasdair Macleod points out the obfuscation going on between government economic data & price distortions in the financial markets .. highlights theChapwood Index as a true cost-of-living inflation measure in America – it reports on the actual cost & price fluctuation of the top 500 items on which Americans spend their money on .. as you can see in the above chart, it is much higher than the government reported numbers .. “Understated price inflation fundamentally distorts everything that is macroeconomic, from monetary policy to economic commentary. It misleads central bankers into thinking they are missing their inflation targets when they are in fact exceeding them by a dangerously wide margin. It misleads analysts into thinking we are on the brink of a deflationary slump with prices maybe about to collapse. And most worryingly of all, bond markets have become more mispriced than even hardened bears realise, something that’s very likely to be corrected through a financial shock .. Just think of all those bonds that the banks have acquired as zero risk investments under Basel III rules .. If bond markets discounted, as the Chapwood Index suggests they should, a U.S. inflation rate consistently around 10%, the 10-year U.S. Treasury bond should yield at least that, possibly more. The price would halve to meet those redemption yields, and lesser credit-worthy bonds would fall even more, a development for which all financial markets are wholly unprepared, not to mention the knock-on effects on stocks, derivatives and of course, mortgage rates.”
04/18/2015 - Financial Repression Explained: It’s about Macro Prudential Policies to Control and Reduce Government Debt
WSJ article highlights how as interest rate benchmarks go negative, banks may be paying borrowers .. “Negative interest rates in Europe have created a previously inconceivable problem for some banks: They may soon have to pay interest to customers who borrow from them .. The novel problem is just one of many challenges caused by negative interest rates. All over Europe, banks are being forced to rebuild computer programs, update legal documents and redo spreadsheets to account for negative rates . Banks, hoping to avoid the expense of having to pay their borrowers, are turning to central banks for guidance. But what they are hearing is less than comforting.” .. it’s financial repression.
03/04/2015 - Bank Bailin for Austrian Bank Heta Bank in Austria has perhaps reached the end of the road. The bank, which was bailed out by the Austrian Government a few years ago & is now in need of another bailout but none will be forthcoming .. Rather, bondholders & creditors will be paying for the bailout & this will have the effect of triggering the CDSs (Credit Default Swaps). Will this lead to a series of cascading collapses among banks across the world? That’s the fear among many alternative economists across the globe, only time will tell .. 24 minutes
03/02/2015 - Financial Repression on Interest Rates is Destroying Business Models, Capitalism, Pension/Insurance Funds
Janus Capital’s Bill Gross* on the outlook for Federal Reserve policy, the U.S. economy & his objectives at Janus Capital .. “The interest rate can’t be raised substantially even over the next two to three years .. Low interest rates keeps zombie corporations alive because they can borrow at 3 and 4%, as opposed to the 8 or 9%. It destroys business models. It’s destroying the pension industry and in the insurance industry .. Ultimately, low interest rates destroy the capitalistic model at the margin. Instead of investing in the real economy, corporations can now simply borrow at close to 0% and buy their own stocks, which yield 2 or 3% on a dividend basis and provide a return of 6 or 7% on an earnings to price ratio basis.” .. 12 minutes
02/23/2015 - Dr. Pippa Malmgren: Governments are Imposing Prices on the Market
Matterhorn GoldSwitzerland interviews former financial market adviser in the U.S. White House .. discussion on how there is no price discovery anymore by the market, & governments are imposing prices on the market .. also a discussion on the closer ties between Russia & China, Germany’s gold reserves, the phenomenon of financial repression .. 38 minutes
02/19/2015 - Insurance Companies Will Be Raising Insurance Premiums Because of Financial Repression
Dr. Marc Faber* says central bankers are professors who never worked a day in their lives & whose easy-money policies will ultimately be disastrous for markets .. That’s why he says he thinks gold could be the “trade of the century” & why he recommends additional exposure to gold through junior miners. He explains his investing strategy today on Commodities .. says insurance companies will be raising insurance premiums to much higher levels due to the financial repression of very low interest rate & low yields .. thinks sovereign wealth funds will begin investing in gold .. 7 minutes
02/18/2015 - Paul Brodsky on Financial Repression
Boom Bu$t .. discussion with Paul Brodsky on how financial repression seems to be the order of the day on monetary policy, with negative interest rates rife throughout government bond markets in Europe – explains where financial repression is leading central banks & explains what kinds of strategies you can devise to get around it .. 1/2 hour total program
02/14/2015 - Financial Repression – Capital Controls
INET video interview with Boston University’s Professor Kevin Gallagher on his new book .. discussion of international capital flows, how it is causing destabilizing effects in developing countries .. Gallagher points out that today a number of emerging economies, including Brazil, Taiwan, & South Korea, have been successfully experimenting with new capital account regulations (CARs) to manage volatile capital flows .. Gallagher develops a theory of countervailing monetary power that shows how emerging markets can & should counter domestic & international opposition to the regulation of cross-border flows, even as he acknowledges powerful attacks from a multiplicity of interests, seeking to undermine those very regulations .. 20 minutes
02/12/2015 - Sprott’s Rick Rule on Financial Repression 
Interview transcript with Rick Rule on the economy, global counterparty risks & the natural resource sector .. on the issue of capitulation in the finacial markets for natural resources: “We came close last October. There were some moments of absolute panic .. but we didn’t follow through with a capitulation… Capitulation usually follows a protracted period of diminished volume… I have never seen a bear market in the juniors end without one .. just because I haven’t seen it doesn’t mean it has to be that way.” .. identifies financial repression: “The fiscal regime that has been in place since the financial crisis is one where the political class has decreased the interest rate artificially, allowing the very large money center banks to borrow at extraordinarily low costs both from their retail deposit banks but also from their central banks and lend the money back to sovereigns. In effect what happens is that the central governments loan the banks money at .75% or 1% and borrow the money back from the banks at 2.5% or 3%, giving them a 1% or 1.5% interest rate carry at very, very, very low risk. That’s the way the Japanese subsidized their banks and made their banks solvent again after their currency crises.” .. 28 minutes accompanying video
02/08/2015 - Axel Merk: “We have Financial Repression Everywhere.”
Is deflation or inflation on the financial horizon? .. here is what Axel Merk thinks: “For me, it’s a slam dunk. We are going to get inflation. There are negative real interest rates in the developed world as far as the eye can see. Just about every country has negative real interest rates, and we have financial repression everywhere. I think we cannot afford positive real interest rates over an extended period. Just think about the U.S. with the entitlement wave coming against us. We got strong incentives in place to have negative real rates when the government has too much debt and when consumers have too much debt. The reason why we have this battle with inflation and deflation is we are clearly facing a deflationary bust, and central banks are fighting against it. If we didn’t have central banks, I’d be fully onboard with deflation, but because we cannot have bankruptcies, we will inflate our way around it .. Ultimately, inflation is going to first come up in the U.S., and that inflation is going to be exported to other countries.” .. 18 minutes
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