03/12/2015 - Financial Repression Creating Distorted Market Prices & Divergence Between Wall Street & Main Street
“All of the massive liquidity—-which took the Fed’s balance sheet from $900 billion to $2.5 trillion in less than a year—–worked it magic in the canyons of Wall Street, not in the household and business sectors of the main street economy .. The 5X gain in the Fed’s balance sheet .. has not been harmless——even though it has not stimulated the main street economy. What is has done, obviously, is reflate a massive financial bubble. The latter will splatter eventually, sending the main street economy into a new tailspin of short-term labor and inventory liquidation and another financial crisis for no reason whatsoever .. Do not these clueless Keynesian apparatchiks recognize that the money market rate and the yield curve are the most important prices in all of capitalism, and that their policy of massive and continuous financial repression generates blatantly false prices in the financial markets and therefore rampant speculation and asset price inflation? .. Needless to say, another quarter of no ‘escape velocity’ on main street and a further round of Kool Aid drinker speculation on Wall Street takes us just that much closer to the brink. Yet the Fed remains oblivious and continues to manufacture excuses and equivocations as to why ZIRP should extend into its 80th month and beyond .. This is mis-governance on a colossal scale. So when the next thundering crash occurs—-it is devoutly to be hoped that ‘audit the Fed’ turns out to be the least of the threats descending on the Eccles Building.”
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
03/10/2015 - Rick Rule Talks Financial Repression
Special Guest: Rick Rule – Chairman and Chief Executive Officers of Sprott US Holdings
FINANCIAL REPRESSION
“Financial controls or ‘trickery’ imposed on the public by the state.”
“There is certainly financial ‘trickery’ imposed on us by large financial institutions but they do that utilizing the state or in conjunction with the state. The practical manifestation of Financial Repression are all around us. I would suggest that a large part of the manadate of the Securites and Exchange Commission as an example is to effect barriers to entry to smaller participants in the securities business.
The most egregious forms of Financial Repression are in the first instance:
Tax (which many regard as slavery – I don’t but regard it as extortion!)
The Manipulation of Interest Rates and
The Manipulation of the Currency.”
“The interest rates payable to savers relative to the real rate of depreciation of the purchasing power of – pick one: the dollar, the euro, the yen – are despicable!”
ALAN GREENSPAN
“As recently as October last year I had the pleasure of listening to Alan Greenspan who ironically (despite the fact he is a vowed libertarian and architect of a lot of this Financial Repression) and he said something very stark too the audience! He said that a sound currency is not consistent with a representative democracy. A sound currency benefits the productive class and savers. In a representative democracy most of the people are spenders. Low interest rates and a depreciating currency aids the spenders and borrowers. It doesn’t aid the savers. In that context Financial Repression is understandable and I’m afraid inevitable.”
INVESTMENT IN LONG TERM PRODUCTIVE ASSETS
Rick Rule feels that the perverse incentives from manipulated data has resulted in a lack of investment within the US in Productive Assets that would allow the employment of technology and the real wages of workers to rise.
The reason is:
1- If you aren’t seeing underlining demand and top line sales growth in your business, why would invest in productive capacity?
2- The US Tax Code is anti-growth. Depreciation schedules are much more investor friendly even in socialist countries today that in the US.
EXTRAORDINARY FAITH &“RETURN FREE RISK”
“We appear to be in a place in history and the economy where there is extraordianary faith in the big thinkers in the world – the Merkels, the Obamas, the Greenspans, the Yellens. It is partly this faith that is allowing them to keep these interest rates this low. It is a belief that the big thinkers of the world “stick handled” societies global financial crisis of 2008 and by managing the levers of the economy, managed to save us from ourselves. I would of course disagree with that diagnosis (but no one cares much what I think). I certainly believe that savers will tire of buying financial instruments that have no real yield. If you think about the value proposition as an example offered up by the bellwether savings instrument world wide (the US 10 Year Treasury) yielding 1.8%. What that means is the Fed absolutely, positively guarantees you 1.8% per year for 10 years. The difficulty I have with that is that even at their ascribed CPI inflation rate, what they are promising you is 20 basis points a year in real yield. Jim Grant famously described that as “Return Free Risk”.
GOLD
“I don’t know what is going to happen with gold short term”. “What will move Gold, Silver, Platinum and Palladium are first and foremost is a reduction in confidence in the US dollar and the US 10 Year Treasury. It important to understand that gold doesn’t need to win the war. It just needs to lose the war less badly!”
“Gold has performed admirably outside the US over the last year.”
Gold can be seen to be already in a Bull Market globally – except in the US, as a result of a 25% rise in the US dollar.
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
03/07/2015 - POLICY FOUNDATIONS OF FINANCIAL REPRESSION
For six years, we’ve been told that the US economy is in recovery.
This is a totally bogus narrative that was dreamt up by the Central Planners running the Fed. Remember the “green shoots” craze of 2009. It was BS. The US economy is a disaster and has been since 2009.
The bean counters in Washington fabricate a load of nonsense to “prove” otherwise, but telling someone who is 5’6” tall that they are actually 6” tall doesn’t change their height.
Similarly, telling Americans experiencing a REAL unemployment rate of 10+% and an underemployment rate in the high teens that the economy is “recovering” doesn’t change their real-world experience.
The U.S. is delivering at a staggeringly low rate of 44%, which is the number of full-time jobs as a percent of the adult population, 18 years and older. We need that to be 50% and a bare minimum of 10 million new, good jobs to replenish America’s middle class.
THE DISTORTIONAL TRICK
GIVEN UP – If you, a family member or anyone is unemployed and has subsequently given up on finding a job — if you are so hopelessly out of work that you’ve stopped looking over the past four weeks — the Department of Labor doesn’t count you as unemployed. That’s right. While you are as unemployed as one can possibly be, and tragically may never find work again, you are not counted in the figure we see relentlessly in the news — currently 5.6%. Right now, as many as 30 million Americans are either out of work or severely underemployed.
ANY INCOME – There’s another reason why the official rate is misleading. Say you’re an out-of-work engineer or healthcare worker or construction worker or retail manager: If you perform a minimum of one hour of work in a week and are paid at least $20 — maybe someone pays you to mow their lawn — you’re not officially counted as unemployed in the much-reported 5.6%. Few Americans know this.
UNDER-EMPLOYED – Those working part time but wanting full-time work. If you have a degree in chemistry or math and are working 10 hours part time because it is all you can find — in other words, you are severely underemployed — the government doesn’t count you in the 5.6%.
BIRTH DEATH MODEL – a Plug number that shows dramatic job growth yet the net new enterprises added in America is Negative 70,000 over the last 6 years. Big corporations are still cutting (HP -58,000, America Express -4000) so the number is obviously a statistical “fix”
When the media, talking heads, the White House and Wall Street start reporting the truth — the percent of Americans in good jobs; jobs that are full time and real — then we will quit wondering why Americans aren’t “feeling” something that doesn’t remotely reflect the reality in their lives.And we will also quit wondering what hollowed out the middle class.
Only 15% of those entering working age population are finding jobs
As far as real economic growth goes, if you want a clear picture, you need to look at nominal GDP growth. The reason for this is that because the Fed greatly understates inflation, the official GDP numbers are horribly inaccurate.
By using nominal GDP measures, you remove the Feds’ phony deflator metric and the other accounting gimmicks created by the bean counters to overstate growth. With that in mind, consider the year over year change in nominal GDP that has occurred.
Historically, the level of economic growth post 2010 has been associated with recessions. Small wonder that this “recovery” actually feels like an economy that is not growing: when you take out the accounting gimmicks, GDP is flat lining.
ACCOUNTING GIMMICKS
Speaking of accounting gimmicks consider the massive divergence between corporate revenue growth and EPS growth (hat tip Lance Roberts). You cannot fake revenues: they represent real growth. EPS on the other hand, can be massaged a million different ways.
Notice that the un-massaged growth post-2009 is just 30%. The massaged “growth” is 250%. Bear in mind, executive stock options are linked to EPS… so guess who got rich in the process.
Again, this whole economic “recovery” and stock market boom is based on accounting gimmicks and outright fraud. It’s a giant house of cards that is primed to come crashing down… just as it did in 2000, 2007… and will today.
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
03/07/2015 - The Financial Repression of LIBOR: Causing the Biggest Bubble
Forbes article emphasizes the worst “scandal” of LIBOR, not what happened a couple years ago when the LIBOR rate was found to be controlled by a few banks – but about the effects of a low LIBOR rate (low interest rates) on the global economy .. what is LIBOR? – it stands for “London Interbank Offered Rate,” which is a benchmark interest rate that is derived from the rates that major banks charge each other for loans in the London interbank market – LIBOR is used as a reference rate for hundreds of trillion dollars worth of commercial & consumer loans, derivatives, & other financial products across the globe .. “The vastly worse LIBOR ‘scandal’ that I am referring to is the fact that the LIBOR has stayed at record low levels for the past half-decade [from financial repression], which is helping to fuel a massive economic bubble around the entire world that will end in a devastating financial crisis that will be even worse than the Global Financial Crisis. Instead of causing a few tens of billions of dollars worth of losses like the LIBOR rate-fixing scandal, the ‘LIBOR Bubble’ will gut the global economy by trillions of dollars.”
Extended low LIBOR rates have been “helping to inflate the emerging markets bubble that I am warning about” .. sees 3 scenarios of the end-game .. concludes: “The popping of the ‘LIBOR Bubble’ may not even require Libor rates to rise because the bubbles may endogenously collapse under their own weight after growing even larger in the next few years. Though the popping of the global bubble is likely several years away, the time to worry about this situation is now because the damage (the debt buildup and asset price inflation) is occurring at this very moment.”
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
03/07/2015 - Amin Rajan Talks Investing In A Debt-Fueled World With the FRA
Special Guest: Amin Rajan – CEO, CREATE Research
FINANCIAL REPRESSION
“Financial Repression is a device used by governments to liquidate their debt.”
Financial Repression uses low interest rates (which reduces their financing costs) and inflation (which vaporizes its debt). The Negative Real Interest Rates which the two in combination create, has in the modern era been the way governments reduced their debt burdens.
“Financial Repression brings about an arbitrary redistribution of wealth.”
Today it is the governments only politically realistic option.
The critical problem is holders of fixed income debt get hurt where there is a redistribution of wealth:
From Savers to Borrowers.
From Pension Plans to Government
EXPECTED DURATION
Historically we should expect Financial Repression to last anywhere from 15 to 50 Years. We are now into only the seventh year! In Prof Rajan’s opinion “this show has a long shelf life and likely to run another 5 – 10 years”
PENSION PLANS – Entering “De-Accumulation Stage”
Aging demographics in the debt burdened developed economies is exaggerating the effects of Financial Repression because of the need for Investment Income products by retirees.
Pension Plans are now going into the “De-Accumulation Stage” where there is more money going out of the plan than is going in. Pension plans face problems of both under contribution levels and De-accumulation resulting in serious underfunding positions.
THE RETIREMENT TSUNAMI
The “Baby Boomer’ Generation is in the process of retiring. There will be 78 Million in the US and 84 Million. Europe which accounts for 8% of the global population and 25% of global output accounts for a massive 48% of global welfare budgets.
The shift from Defined Benefits (DB) to Defined Contributions (DC) is about the “Personalization of Risk” so we are told, “so people can be ’empowered’ and will be less dependent on their employers plans”. Instead Prof Rajan argues we have “Personalization of risk has a big downside. It transfers risk from those who couldn’t manage it to those who don’t understand it!”
LIQUIDITY CRISIS – Volcker Rule Has it ‘Preordained‘
When the next market correction occurs “liquidity is going to dry up in no time at all because of the Volcker Rule. The inventories of Bonds which the Investment Banks are caring are now one-eight of what they were pre-2008. Any mass exit and there will be no liquidity and prices will drop like a stone!”
OBSERVATION
Prof. Amin Rajan observes that two paradigm changes have occurred in capitalism:
Capitalism has Lost Social Expression – It is no Longer Improving and Benefiting Society as a Whole
Over Financialization – Financial Engineering and Trading for Profits had taken control of Capitalism versus Investing In Productive Assets for increasing productivity. Markets no longer channel capital from savers to investments in productive assets. There are neither savers nor productive assets involved in the process but rather financialization.
Product alpha is about beating the markets, solutions alpha is however about meeting investors’ predefined needs.
“Solutions Alpha is not about trying to beat the market nor the crowd, because these markets are going to end in tears at some stage. So when thinking about retirement think about exactly what your needs are then think about asset classes that will help you meet these needs. ‘Shoot-The-Lights-Out’ returns are no longer an option without huge amounts of risk!”
Solutions alpha will remain the epicenter of innovation. Solutions Alpha requires looking for asset classes that deliver:
Regular Income,
Inflation Protection,
Low Volatility.
Examples would be Rental Real Estate, Infrastructure, Timber, Farm Land and many traditional “hard assets”.
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
03/06/2015 - Financial Repression – Capital Controls: A Canadian Bank Shuns U.S. Citizens
Article highlights an Alberta bank is now the first in Canada to shun U.S. clients on bank accounts .. Canadian Direct Financial, a subsidiary of Edmonton-based Canadian Western Bank, is refusing to open new accounts for U.S. citizens, even to those living in Canada – “The information and documentation required to open and monitor an account within Canadian Direct Financial for a U.S citizen or resident outside of Canada is prohibitive to providing the level of service our clients expect and deserve.”
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
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
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
03/02/2015 - Mebane Faber Talks Global Value Investing
Special Guest: Mebane Faber – CIO Cambria Investment Management
FINANCIAL REPRESSION
“An environment where interest rates are lower than inflation and you have a low or even negative interest rate environment which helps someone and hurts someone else. It hurts savers but is good for borrowers and people who have a lot of debt. The inflation eats away at that debt. It helps someone like the US government”
“Stocks and bonds like high real interest rates. They typically don’t like low or negative real interest rates”. Other asset classes like gold like negative real rates and have over the last decade, but not so much over the last couple of years.”
VALUE & MOMENTUM
Faber likes both value and momentum and believes they can work together as part of a global portfolio, particularly where they intersect. Cambria uses Shiller’s 10 Year CAPE benchmark to look at equities. It is typically around 17 and is now around 27 in the US. It presently shows a lot of great valuations around the world however momentum has been in US stocks, bonds and real estate. “Right now we see a lot of opportunity, but particularly abroad”.
THE “HOME COUNTRY” BIAS
The US is only about 50% of global market cap but most US investors have a ‘hometown bias” of having 70% of their portfolio in US securities. Faber has found that it consistently ranges from as low as 65 to as high as 85%. Meanwhile, when considered on a GDP basis the US is only about a fifth to 25% and on a valuation basis is the third most expensive. This would suggest the US has a headwind, especially after a six year run. An exposure of at least half to foreign investment seems more reasonable to Meb Faber.
DEVELOPED AND EMERGING COUNTRIES
We start with a universe of about 45 countries with reasonable liquidity. One of Cambria’s funds buys the eleven cheapest countries in the world. Faber’s analysis suggests avoiding countries that create large bubbles can be a critically important when viewed over the longer term because of the size of the inevitable corrections.”
“One of the emotional challenges and why value works is because it is hard to do.”
CLASSIC MISTAKES
“Not Getting Out of Your Own Way!”
Getting Caught Up In Performance,
Not Having a Plan,
Trying to Time Your Investments,
Realistic Expectations.
“Not Paying Attention to Fees”
“Too Wedded to An Investment Style”
Need to be Asset Class Agnostic
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
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
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
02/28/2015 - Obfuscation – one of the Pillars of Financial Repression
BMG Bullion Group’s Nick Barisheff writes a great essay on how the mainstream media omits facts & distorts the truth to suit their agenda – this is particularly true in the negative media barrage against gold .. “Anyone who cares to look outside of the mainstream media propaganda will conclude that the drop in gold prices was clearly an orchestrated event, first in 2011 with a one day drop of 7.2%, and then in April 2013 for an 8.5% drop. In the early morning hours of January 6th, 2014, 12,000 gold contracts representing $1.5 billion of naked short selling was forced onto the paper gold COMEX market. Without speculating about who did it or why, it should be obvious that no trader would sell that much gold into the market at one time, effectively minimizing their sales proceeds.” .. also highlights the connection between paper COMEX markets & the exchange-traded fund GLD, & how this ETF negatively affects gold prices in times of naked short selling (selling gold without physically having it) –LINK HERE to understand more about the GLD ETF & these problems .. Barisheff dismisses the obfuscation by maintaining “when the manipulation of gold prices can no longer be sustained, gold will skyrocket as the public loses confidence in all fiat currencies.” – see the recommended 20 minutes video below on this .. presents the following factual-based chart showing the positive effect of having gold in your portfolio – see left or link below.
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
02/27/2015 - Financial Repression: U.S. Interest Rates are Low Because the U.S. Government is Over-Leveraged
James Turk sees the Federal Reserve as constantly warning that interest rates will rise eventually – but it never seems to happen .. “The obvious strategy the Fed has employed is to delay raising rates as long as possible, but to keep the markets on a knife-edge by saying that rates will rise eventually. They always tie it to something, like the level of unemployment or when the economy improves or inflationary pressures become greater or whatever is the latest benchmark. Former FedChairman Ben Bernanke repeatedly said that the Fed would raise interest rates when unemployment fell to 6.5%. We are below that level — at least by the number reported to the public. But the Fed has done nothing about raising rates except to continue jawboning that it will happen.” .. will it happen & when will it happen? .. Turk emphasizes the Federal Reservenever wants to admit the real reason why interest rates are low – it’s financial repression to keep interest rates low & erode the purchasing power of the currency to lessen the burden of debt .. “Interest rates are low because the U.S. government is over-leveraged and cannot afford to pay a fair interest rate.” .. Turk reasons: therefore if the Federal Reserveraises interest rates, then interest payments on the national debt will escalate money printing even faster to the point of hyperinflation.
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
02/23/2015 - GRAHAM SUMMERS on Financial Repression
“QE was never meant to create jobs or generate economic growth… it was a desperate ploy by Central Banks to put a floor under the bond market so rates wouldn’t rise.
… It’s also why Central Banks have kept interest rates at zero or even negative. They cannot afford to have rates rise.
In the US, every 1% increase in interest rates means between $150-$175 billion more in interest payments on our debt per year.
when you include unfunded liabolities, this problem is endemic throughout the Western world and has been for years.
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
02/23/2015 - MyRA to Become TheirRA?
Speaking at AARP headqusrters in Washington, President Obama will announce ORDERS to the Labor Department to write new rules for financial managers who handle retirement accounts for working Americans.
THE COVER
As USA Today reports, The White House says the goal is to end “hidden fees that hurt consumers and back-door payments that help Wall Street brokers,” deals that costs retirees billions of dollars in savings.
THE AGENDA
White House officials said they want new fiduciary standards that would require financial advisers to put clients’ interests ahead of their own… and “buy our bonds.”
We wonder how long before there will be an official asset allocation by dictat…??
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
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
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
02/21/2015 - Paul Craig Roberts PhD Talks Financial Repression
Special Guest: Paul Craig Roberts PhD – Chairman of the Institute for Political Economy
Dr. Paul Craig Roberts is extremely meticulous in examining the central problems facing America and the developed economies today. You may not like nor agree with what he says but there is little double as a former high level Treasury official, academic professor and Wall Street Journal editor, that he knows what he is talking about.
FINANCIAL REPRESSION
“It is going on on several fronts conducted by different people for their own agendas, though they all seem to be mutually supporting.
1-FINANCIALIZATION OF THE ECONOMY by the Big Banks. – “What that means is that they are converting the entirety of the economic surplus to paying interest on debt. They are draining the economy of all vitality! There is nothing left for the expansion of consumer demand, business investment and old age pensions. It expropriates the economic surplus that is created beyond the maintenance of the current living standard into interest on debt.
2-OFF-SHORING OF MIDDLE CLASS JOBS by Corporations & Wall Street – “What the Corporations and Wall Street have achieved by off-shoring manufacturing jobs and tradable professional job skills such as software engineering & information technology. What they have done by moving these offshore is to recreate the labor market conditions and wage exploitation of the late 19th century.”
3-MANIPULATION OF THE BULLION MARKETS by the Futures Market Bullion Banks – “There is no free market in the futures markets. These are markets that are manipulated.”
COLLUSION BETWEEN PARTICIPANTS
“I think there is a lot of collusion. For example the government colluded with the banking system in financial deregulation. For example they repealed Glass-Steagall. They expressed this absurd claim that financial markets are self regulating.”
“They turned the financial system into a gambling casino where the bets are covered by the tax payer and central bank.”
The cancer which started in the US Financial System has spread globally. The carriers of the cancer has been the International Banks.
WASHINGTON ANSWERS TO WALL STREET
“Some of the Financial Repression is collusion of government serving the financial interests because Wall Street is a huge supplier of political campaign funds which you are highly dependent on to get re-elected. So you answer to the donors. You don’t answer to the public interest. It doesn’t give you any money.”
“You answer to:
Wall Street,
The Military-Security Complex,
The Agri Business like Monsanto,
The extractive Industries (Oil, Timber, Mining)
These are the powerful interest groups that use the government to serve their interests.”
THERE ARE NO LONGER COUNTERVAILING POWERS IN WASHINGTON
With the destruction of the manufacturing jobs in America through off-shoring, it has reduced the power of the unions and destroyed the Democrats independent source of campaign funds.
“You now have two parties with the same head and reporting to the same masters. There is no longer any countervailing power”
You no longer have the Democrats supporting workers against the Republicans supporting business. Both parties represent them.
“This is the reason you can’t do anything about Financial Repression!”
NEO-CONSERVATIVE CONTROL OF FOREIGN POLICY – $6T TRILLION IN WAR DEBT
We have been in 14 years of wars and added $6T of national debt to finance these wars “without adding five cents of investment for the country having taken place.”
“We now have the Neo-Conservatives driving the conflict with Russia (which is insane), with China (which is insane). The United States doesn’t have the power to try and dominate Russia / China. Especially now that the two countries have a strategic alliance”
“You have much of the world turning away from the United States because of Washington’s
Abuse of the Dollar as the World’s Reserve Currency,
Abuse of the dollar based payment system,
Imposing unilateral sanctions which are acts of war,
Threatening people with expulsion from the clearance mechanism and people saying we won’t have any part of this,
The BRIICS establishing their own version of the IMF,
The Impact of the Spy Scandals and people saying they will build their own internet,
All of this is not only going to effect business it is going to effect American power. It is going to start shriveling!”
“If you have these crazed Neo-Conservatives demanding control of the world, faced with declining power, you don’t know what they will do! It is a very, very dangerous situation. I’m surprised it has taken the world so long to realize the threat the US poses to the rest of the world.”
“The US Dollar payment system is essentially a system for looting. This, Globalization and Neo-liberal economics are tools of American economic imperialism. Countries are beginning to realize this. The looting of countries by American imperialism has now reached the point where it is turning on itself – Greece for example.”
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
02/21/2015 - Financial Repression has allowed Governments to get deeper into Debt
“The anti-austerity sentiment appears to be gaining momentum even in the core nations of Europe .. Even the president of the European Commission recently questioned the usefulness of austerity, noting its results so far have only been shrinking growth and social suffering .. Austerity in Europe is on life support, but the insatiable desire to spend is not limited to just Europe .. Seduced by low interest rates, governments all over the globe are yearning to return to their former big spending ways. Using the cover derived from lower deficit to GDP ratios—caused by record-low rates–politicians are emboldened to return to their first love .. deficit spending. For example, the interest payment on the national debt in the U.S. is lower today than it was prior to the financial crisis, despite the fact that the national debt is $9 trillion higher .. When interest rates rise above these currently manipulated low levels, not only will payments for debt service soar, but the asset bubbles created by central banks over the past seven years will burst.”
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
02/21/2015 - The Global “Doomsday” Book – Haydon Perryman Talks GATCA/FATCA
Special Guest: Haydon Perryman, CGMA – FATCA Program Manager
“This a modern day “Doomsday” Book, the same asWilliam the Conqueror implemented in 1066 after conquering England. He needed to know where the wealth was so he could tax it”
“This is Not Really About Tax There are Easier Ways to Solve Tax Tracking – Its about a Common Reporting Standard. Its about the ability to track Capital”
“FATCA is a decoy for the Common Reporting Standard”
“There is an incredibly aggressive urgency of implementation – an unprecedentedly quick agreement between 57 governments”
Why?
Either to Tax it , Expropriation it or Control Its Free Movement
There will also be considerable customer backlash to FATCA and the documentation it requires. In the age of social media this matters, if this sounds like hyperbole please have a look at this URL
At a most basic level FATCA, the IGAs and the CRS are about making tax part of standard KYC/AML procedures and then reporting, for tax purposes, to those jurisdictions, in which the account holder has tax residence or citizenship.
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
02/21/2015 - Kevin Warsh on Financial Repression
“In this environment, policy makers are finding their authority, credibility and firepower being tested. In turn, they are finding it tempting to pursue ‘financial repression’—suppressing market prices that they don’t like. But this is bad policy, not least because it signals diminished faith in the market economy itself. In environments of financial repression, businesses are keener to retrench than recommit their time, energy and capital to new projects. Trillions of dollars of private capital remains on the sidelines. And the private-sector engine that drives prosperity sputters .. Financial repression is sometimes the effect of policy even if it is not the intent. It manifests itself, for example, when policy makers react more forcefully to declines in asset prices than to increases. Price increases tend to be treated with benign indifference. But declines often lead policy makers to respond with force, deploying fiscal stimulus and monetary accommodation. Market participants then conclude that governments have their backs .. The Federal Reserve’s continued purchase of long-term Treasury securities risks camouflaging the country’s true cost of capital .. With financial repression at play, we risk missing early warning signs from markets that our debt burden is intolerable .. Financial repression embeds the wrong incentives—obfuscation begets delay, and a robust recovery becomes unattainable .. Financial repression is a tactic that may help get us through the week or month or year. But it will come at a substantial cost to our long-term prosperity.”
– Kevin Warsh, Former Federal Reserve Governor, a distinguished visiting fellow at Stanford University’s Hoover Institution, on the Steering Committee of the Bilderberg Group
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
Axel Merk emphasizes the advantages of investing in gold to address the investment challenges in the era of financial repression .. points out how the days of low or 0% interest rates is moving into negative interst rates in several countries – this is a form of financial repression where savers earn less than the inflation rate to discourage saving & the purchasing power of your assets loses value over time .. on gold, highlights how the purchasing power of gold has not changed all that much & therefore it presents itself as an investment asset for financial repression .. Merk explains how the interests of government on their massivie debt are driving policies to mechanisms of financial repression to “debase the value of debt” – negative interest rates, inflation loss of purchasing power, & currency debasement .. “Differently said: interests of the government and savers are not aligned. More broadly speaking, investors – be that in the U.S., Japan, Europe, can’t rely on their government to preserve the purchasing power of their savings.”
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
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
Disclaimer: The views or opinions expressed in this blog post may or may not be representative of the views or opinions of the Financial Repression Authority.
03/12/2015 - Financial Repression Creating Distorted Market Prices & Divergence Between Wall Street & Main Street
