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The Financial Repression AuthorityTM

A Joint Initiative of Gordon T Long.com and CliffKule.com

Investments of any kind involve risk.  Please read our complete risk disclaimer and terms of use below by clicking HERE

     
 
   

 

Campaign poster showing William McKinley holding U.S. flag and standing on gold coin “sound money”, held up by group of men, in front of ships “commerce” and factories “civilization”. (Photo credit: Wikipedia)

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Why the Fed Has Declared War on Your Money

 

America's Roots WERE In

Sound (Honest) Money


Daily Reckoning essay explores the roots of sound (also referred to as 'honest') money in the U.S

READ MORE

Alexander Hamilton, America's first Secretary of the U.S. Treasury under U.S. President George Washington faced the challenge of restoring the U.S. economy that had been devastated by the U.S. Revolutionary War

.. "When money serves as a stable measure of value, it most clearly expresses the value of everything in terms of everything else."

.. Hamilton boosted the U.S. economy with legislation for the U.S. federal government to assume & pay off all the debts of the states, establishing the foundation for U.S. creditworthiness

.. the essay describes the historical success with the gold standard: 

"Fixing a nation’s currency to gold assures that the currency maintains a stable long term value, without inflation, or deflation. That enables a nation’s money to serve as a measure of value, like a ruler measures inches, or a clock measures time. Such a stable measure of value, in turn, means money can best perform its most essential function in facilitating transactions .. The termination of any link between the dollar and gold immediately inaugurated worsening boom and bust cycles of inflation and recession in the 1970s, with inflation soaring into double digits for several years. Inflation peaked at 25% over just two years in 1979 and 1980."

 

 

 

   

 

Stagflation Is A Keynesian Phenomenon

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The Amphora Report

Investing In Financial Repression

 

READ: Amphora Report

   

 

 

 

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U.S. & China 

Financial Repression Is Preventing  Their Economic Recovery

China's Risky Play in the U.S. Debt Market

READ: China's Risky Play in the U.S. Deb t Market Caixin Online 07-31-14

   

 

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More Financial Repression

To Pay Down Debt

READ: Asset Forfeiture – How Cops Continue to Steal Americans’ Hard Earned Cash with Zero Repercussions libertyblitzkrieg.com 07-28-14

   

Mr. Fisher is president of the Federal Reserve Bank of Dallas. This article is excerpted from his speech on July 16 at the University of Southern California's Annenberg School for Communication & Journalism.

 

Low interest rates and abundant availability of credit in the nondepository market, the bond markets and other trading markets have spawned an abundance of speculative activity

 

“The Fed has been running a hyper-accommodative monetary policy to lift the economy out of the doldrums and counteract a possible deflationary spiral. Much of what we have paid out to purchase Treasurys and mortgage-backed securities has been put back to the Fed in the form of excess reserves deposited at the Federal Reserve banks. As of July 9, $2.517 trillion of excess reserves were parked on the 12 Fed banks' balance sheets, while depository institutions wait to find eager and worthy borrowers to lend to. But with low interest rates and abundant availability of credit in the nondepository market, the bond markets and other trading markets have spawned an abundance of speculative activity. ” -- Fabian T. Pfeffer, the University of Michigan professor who is lead author of the Russell Sage Foundation study.

 

 

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"Relying upon Macroprudential Supervision to prevent financial instability provides an artificial sense of confidence!?"

READ: The Danger of Too Loose, Too Long With an improving labor market and an uptick in inflation, the danger now is to wait too long to tighten Richard W Fisher 07-27-14 WSJ

"I have grown increasingly co. ncerned about the risks posed by current monetary policy. First, we are experiencing financial excess that is of our own making. There is a lot of talk about "macroprudential supervision" as a way to prevent financial excess from creating financial instability. But macroprudential supervision is something of a Maginot Line: It can be circumvented. Relying upon it to prevent financial instability provides an artificial sense of confidence".

"There are some who believe that "macroprudential supervision" will safeguard us from financial instability. I am more skeptical. Such supervision entails the vigilant monitoring of capital and liquidity ratios, tighter restrictions on bank practices and subjecting banks to stress tests. All to the good. But whereas the Federal Reserve and banking supervisory authorities used to oversee the majority of the credit system by regulating depository institutions, depository institutions now account for no more than 20% of the credit markets".

   

 


Grant Williams Does An Admirable Job Of Bringing Both Together

Get a load of the first one that shows European banks are not lending to people anymore. On the second one, understand that above 0 means the math of it all is getting worse, even with austerity.

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Which Is Better For Getting People  To Understand The Economy's Problems?

A Classic Comedic Metaphor?

from

Or Graphic Statistical Analysis?

In his latest Hmmm, Grant Williams* makes the analogy of an episode from Monty Python’s Flying Circus, to the 'line' we are being fed by the Fed & other central banks .. highlights the example of Europe where the central bank has encouraged the buying of bond of bankrupt countries - "we'll make sure you don't lose money" - financial repression European-style .. "European banks loaded themselves to the gills with peripheral European debt as part of the quid pro quo with Draghi, but making free carry off the desperate central bank is hardly what used to pass for banking. Remember when banking used to be about things like making loans?" This is a thoughtful piece with graphs to substantiate the commentary. Don't miss it.

Click on "Hmmm July 28" to download the report (may have to provide your email address), or hit "View Fullscreen" far below next to the 'S' icon to enlarge the viewing .. John Mauldin, Best-Selling author and recognized financial expert, is also editor of the free Thoughts From the Frontline that goes to over 1 million readers each week. For more information on John or his FREE weekly economic letter go to: http://www.frontlinethoughts.com/learnmore .. permission granted by Grant Williams to us to post the below, courtesy of www.vulpesinvest.com funds.

   

DECLINING FINANCIAL WEALTH FOR MOST AMERICANS SINCE 2001

“The housing bubble basically hid a trend of declining financial wealth at the median that began in 2001” -- Fabian T. Pfeffer, the University of Michigan professor who is lead author of the Russell Sage Foundation study.

"For households at the median level of net worth, much of the damage has occurred since the start of the last recession in 2007. Until then, net worth had been rising for the typical household, although at a slower pace than for households in higher wealth brackets. But much of the gain for many typical households came from the rising value of their homes. Exclude that housing wealth and the picture is worse: Median net worth began to decline even earlier."

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The Typical Household During Era of FINANCIAL REPRESSION Now Worth a Third Less

New money is being re-directed to pay increasing debt loads as corporate profits come primarily at the expense of reduced income growth while inflation crushes real disposable income.

 A study financed by the Russell Sage Foundation.

READ MORE

   

THE CURRENCY CARTEL

Controls +90% of the $5T in currencies traded daily.

 

FINANCIAL REPRESSION HAS BEEN AGGRESSIVELY PURSUED SINCE THE DOTCOM BUBBLE IMPLOSION

FIAT CURRENCIES ARE BEING DEVALUED IN A COORDINATED MANNER AS PART OF THIS MACROPRUDENTIAL POLICY

This is only evident by measuring a basket of Fiat Currencies in Hard Assets

   

HIDDEN TAX INCENTIVES

In conjunction with Wednesday's release, the U.S. Treasury department is expected to relax certain accounting burdens on the reporting of gains and losses "to ease the transition to a floating share price".

CREDIT RATINGS REMOVED

Separately, the SEC voted unanimously to re-propose a plan, originally floated in 2011, to purge references to credit-rating firms embedded in the SEC's money-fund rule. The change is a requirement of the 2010 Dodd-Frank financial law that requires federal agencies to scrub their rule books of references to credit ratings, forcing them to find new measures to help investors assess creditworthiness.

 

Fund managers now have the Legal Right to 'suspend redemptions' by the you on your Money Market Funds

SEC Approves Tighter Money Fund Rules - Plan Allows Money Funds to Temporarily Block Investors from Withdrawing Money in Times of Stress WSJ

SEC Votes Through Money Market Exit Gates Zero Hedge

READ MORE

   

 

 

 

 

 

 

 

 

Bank Of Japan Prepares To Buy Nikkei-400 ETF To Boost Stocks 07-09-14 Zero Hedge

   

 

 

 

 

 

Japan's Plan By Its Central Planners

For Financial 'Repression' Of The People:

Central Bank To Buy Bonds,

Pension Funds To Buy Stocks

Japan is moving to get its pension funds to sell Japanese government bonds (JGB) to its central bank, then use corporate governance & regulatory changes to force the pension funds to buy stocks

.. "A return to more normal JGB interest rates of above 3% – which will prove loss-making for present holders such as the BoJ – is not likely for at least two years. Part of the Bank of Japan (BoJ)/Ministry of Finance (MoF) strategy of encouraging Japanese private sector portfolio shifts away from JGBs into equity-type assets is that the BoJ can bear such losses far more easily than other investing institutions. One of the most important moves concerns redeployment of assets held by the $1.2tn government pension investment fund (GPIF), where decisions are imminent on investing more in domestic equities rather than government bonds."

READ MORE: Japanese QE to continue as inflation rise slows Abe’s impatience spurs reform drive

   

 

 

 

 

 

THE JAPANESE PEOPLE HAVEN'T FULLY WOKEN UP TO THE FACT THEY HAVE BEEN 'CONNED'

 

Click To Enlarge

 

 

 

 

WHAT FINANCIAL REPRESSION

LOOKS LIKE IN JAPAN

GREAT FOR GOVERNMENT AS DEBT FINANCING GETS CHEAPER

A DISASTER FOR THE PEOPLE HAS REAL WAGES PLUMMET

 

   

LATEST MACRO ANALYTICS ON FINANCIAL REPRESSION

 

LATEST UnderTheLens UPDATE ANALYSIS ON FINANCIAL REPRESSION

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CURRENT FINANCIAL REPRESSION INITIATIVES

MONEY MARKET FUND GATES (SEC REGULATIONS)
  • “Redemption Gates” for Money Market Funds Acting Man -- ""The adoption of 'redemption gates' effectively means that money market fund boards will be able to suspend the property rights of their customers. Once again, this creates a big disadvantage for the money market fund industry in favor of banks, since demand deposits will continue to lack such 'redemption gates', in spite of the fact that banks are de facto unable to actually pay out all demand deposits, or even a large portion of them, 'on demand'. It is an interesting detail that retail customers are to be exempt from this regulation based on the idea that they are basically too addled to react to crisis conditions. Why are such regulations held to be required at all? Are regulators implying that the system has not been 'made safe' by adopting several telephone book-sized tomes of additional regulations?""
  • SEC Votes Through Money Market Exit Gates Zero Hedge -- the SEC has adopted the news rules designed to curb the risk of money market investor runs .. "Among the changes, funds will have to switch to a floating share price instead of the current $1/share (hence the term breaking the buck). But the key part: 'The SEC's rule will require prime money market funds to move from a stable $1 per share net asset value, to a floating NAV. It also will let fund boards lower redemption 'gates' and fees in times of market stress." .. suggests this may send money market investor rushing out & into other asset classes - the SEC, the Federal Reserve & the U.S. Treasury hope that asset class is stocks to keep the stock market rising .. "Clearly, everyone understand that the only purpose behind implementing 'gates' is to redirect the herd. And with some $2.6 trillion in assets, money markets can serve as a convenient source of 'forced buying' now that QE is tapering if only for the time being. The only question is whether the herd will agree to this latest massive behavioral experiment by the Fed, and allocate their funds to a stock market which is now trading at a higher P/E multiple than during the last market peak."
  • U.S. SEC poised to adopt reforms for money market funds Reuters
  • Fund managers on alert over money market shake-up FT -The SEC is looking to drive money market funds to only government securities, especially institutional money market funds - this means money market funds will be helping to pay for the government debt ..  The SEC is also planning to allow fees and restrictions on redemptions in times of stress, but it is not clear how widely these will be applied across the money markets - FT: "Any restrictions on redemptions may not be severe at first, but the regulations will only become more restrictive over time. Don't waste time thinking you are going to monitor the situation and get out later. Get out now, when the getting is easy."

BAIL-IN (GLOBAL - G20 LEGISLATION)

 

FINANCIAL REPRESSION TIMELINE

Coming

 

POLICY CONTROLS (Monetary, Fiscal, Public & Tax Policy)

REGULATORY CONTROLS & ENFORCEMENT

PUBLIC & PRIVATE PRESSURES & PENALTIES

Placing the Government Det on the back off Savers & Pensioners

(ie the 75M Baby Boomers About to Retire)

REPORTING DISTORTIONS (Economic & Gov't Statistics)

CAPITAL & FOREIGN EXCHANGE CONTROLS

POLITICAL SUASION (Political Pressures & Quid Pro Quo)

EXPROPRIATION

 

OUR THESIS PAPER

ABSTRACT

Through the Process of Abstraction the 2012 Thesis outlines how the Global Macro is presently on a well defined path towards a global Fiat Currency Failure and the emergence of a New World Order.

2012 will be highlighted by social unrest during a period of heightened conflict and tension. As economic growth declines and chronic unemployment becomes even more broad based on the world stage, Macro Prudential Policies of Financial Repression will accelerate.

Increasing centralized planning and control by sovereign government will further push advanced societies towards collectism and statism.

ABSTRACTION

TABLE OF CONTENT - (To Assist in your Sectional Download Choices Below the Table)

LATEST LONG Wave TECHNICAL ANALYSIS ON FINANCIAL REPRESSION

Coming in July

STRATEGIC MACRO INVESTMENT INSIGHTS

Jim's recommended "Death of Money" portfolio is:
 
20% Gold
20% Land
10% Fine Art
20% Alternative Funds
30% Cash

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TERMS OF USE

Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. Of course, he recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments.

THE CONTENT OF ALL MATERIALS:  SLIDE PRESENTATION AND THEIR ACCOMPANYING RECORDED AUDIO DISCUSSIONS, VIDEO PRESENTATIONS, NARRATED SLIDE PRESENTATIONS AND WEBZINES (hereinafter "The Media") ARE INTENDED FOR EDUCATIONAL PURPOSES ONLY.

The Media is not a solicitation to trade or invest, and any analysis is the opinion of the author and is not to be used or relied upon as investment advice. Trading and investing  can involve substantial risk of loss. Past performance is no guarantee of future returns/results. Commentary is only the opinions of the authors and should not to be used for investment decisions. You must carefully examine the risks associated with investing of any sort and whether investment programs are suitable for you. You should never invest or consider investments without a complete set of disclosure documents, and should consider the risks prior to investing. The Media is not in any way a substitution for disclosure. Suitability of investing decisions rests solely with the investor. Your acknowledgement of this Disclosure and Terms of Use Statement is a condition of access to it.  Furthermore, any investments you may make are your sole responsibility. 

THERE IS RISK OF LOSS IN TRADING AND INVESTING OF ANY KIND. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

Gordon emperically recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, he  encourages you confirm the facts on your own before making important investment commitments.
  

DISCLOSURE STATEMENT

Information herein was obtained from sources which Mr. Long believes reliable, but he does not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities.

Please note that Mr. Long may already have invested or may from time to time invest in securities that are discussed or otherwise covered on this website. Mr. Long does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or recommendation you receive from him.

 

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If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.   

COPYRIGHT  © Copyright 2010-2011 Gordon T Long. The information herein was obtained from sources which Mr. Long believes reliable, but he does not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. Please note that Mr. Long may already have invested or may from time to time invest in securities that are recommended or otherwise covered on this website. Mr. Long does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or recommendation you receive from him.

 

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Financial Repression describes an economic policy in which capital controls and regulations are implemented by governments and central banks, the aim of which is to reduce public debt burdens through the distortion of financial market pricing.
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Complete Archives

HOW IT HAPPENS
1- Negative Real Rates
2- Disruption of Price Discovery
3- Mispricing of Risk
4- Sustained Financial Distortions
5- Restrictive Financial Choices
6-Confiscation of Wealth Through Inflation
Financial Repression always means a combination of measures that lead to a notable narrowing of the investment universe for investors. Money is thus channeled into specific directions to create a ‘home bias.
TOOLS USED
1- Monetary Policy
2- Distortions - Statistics, Reporting
3- Fiscal Policy - Budget Deficits
4- Moral Suasion - Political Pressures
5- Taxation - ROE, ROI
6-Regulators - Financial Requirements & Enforcement
7- Stealth Credit Spreads
8- Capital Account & Financial Excahnge Controls
PILLARS OF FINANCIAL REPRESSION
1- Strict investment regulations (Solvency II, Basel III)
2- Negative real interest rates g
3- Interest rate ceilings s
4- Open credit dirigisme
5- Nationalizations
6-Regulation of cross-border capital movementst
7- Prohibition of unwanted trading practices such as naked short selling
8- Compulsory loans
9- Prohibition of certain investment assets (e.g. gold)
10- Special taxes (e.g. securities taxes, financial transaction taxes, wealth taxes, higher value added tax on silver, import duties on gold etc.)
11- Direct interventions, such as government intervention in pension funds (Portugal, Ireland, France, Hungary) and subsequent redeployment of investments in favor of government bonds.
12-Growing discrepancy between financing costs of private sector participants versus governments.

13- Haircuts on deposits (e.g. Cyprus)

OUR COMMENTARY

THE BUYBACK TAX RUSE Its a Free Tax Ride for Corporations - 07 July 2021

Financial Repression Goes Global - 05 June 2021

INTERVIEWS

 

PRESENTATIONS

 

GRAPHICS

Click Graphics to Enlarge

VIDEO LIBRARY

 

 

 

PODCASTS
EDUCATIONAL AIDS

The term ‘Financial Repression’ was first employed by McKinnon and Shaw in 1973 and has been rediscovered in the course of the current crisis by Reinhart and Sbrancia in their paper “The Liquidation of Government Debt.”

Federal Reserve Must Print Money To Keep Interest Rates Low - Cliff Küle 05 June 2021

Financial Repression To Accelerate With Increased Desperation - KWN 24 March 2021

Monetary Policy Under Financial Repression: China's Long-Term Outlook Financial Sense 20 Dec 2021