Investments of any kind involve risk.  Please read our complete risk disclaimer and terms of use below by clicking HERE      
SUBSCRIBER ACCESS - THESIS 2014

     

HOME   || A/V Presentations || Trigger$ ||   Commentary   ||  Understanding Abstraction  ||    Meet Gordon   ||  Subscription Services || SUBSCRIBER ACCESS

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

     
 
 

 

CENTRAL PLANNING & CONTROL

Moving towards Control of Pensions through

Control of Insurance Industry

Fed gives preview of future non-bank scrutiny 08-11-14 FT


"

Federal Reserve & Congress Talk

"ENHANCED PRUDENTIAL STANDARDS"

READ MORE

Other non-banks to face 'designation' as "systemic risks to the financial system"

The Fed has insisted that the Dodd-Frank financial reform bill forced it to apply bank capital standards to non-banks. In response, the Senate recently passed a bill that would give the Fed the room to apply capital standards that are tailored for the insurance industry

   
"

   

 

THE SET-UP

STEP 1: EXCESSIVE LIQUIDITY

STEP 2: EXCESSIVE RISK TAKING

STEP 3: BAD MONEY FORCES OUT GOOD MONEY

"

 

THE GOVERNMENT'S GAME OF "ENTRAPMENT"

via FINANCIAL REPRESSION

FINANCIAL REPRESSION

Initially Forced Fund Managers Into

Junk Bond Yields

NOW THE SQUEEZE

STEP 4: THE PANIC

THE FLIGHT TO PERCEIVED SAFETY

STEP 5: ACHIEVE GOAL -> CHEAPER GOVERNMENT FINANCING COSTS


“Wolf Richter's essay posted on Stockman's Contra Corner sees junk bond investors running for the hills, "But there no hills" .. In the latest week, investors yanked $7.1 billion out of junk bond funds, a record amount, according to Lipper - this exodus has been going on since early July, junk bond prices have dropped, yields have jumped from all-time lows, yield spreads have suddenly widened .. "After having been inflated to dizzying proportions, the junk-bond bubble has been pricked. And the hot air is hissing out of it .. Neither glorious economic fundamentals nor corporate financial engineering caused investors to pile helter-skelter, eyes-closed into this high-yield junk. The Fed’s financial repression did .. The Fed has made it impossible for yield investors to earn a noticeable return above the rate of inflation with low-risk paper. So they chased after whatever yield they could get and they held their noses and ventured deeper and deeper into a swamp they normally wouldn’t want to be in. They did that in unison. The demand they created for junk drove up valuations and repressed yields further into low-yield purgatory, where potential losses are huge and potential gains very meager. Exactly as the Fed had wanted them to .. But the Fed has changed its mind" CliffKule.com

   

 

FINANCIAL REPRESSION'S

REGULATORY DETOURS

ARE INCREASINGLY TAKING US AWAY FROM

THE 'SELF CORRECTING" POWER OF

FREE MARKETS

 

"

We have reached the point where

Keynesian Central Planning

manipulations are now stifling

Innovation & Growth


“.. we have moved far away from free markets. The authorities have established endless 'detours' (via policies such as Financial Repression) that restrict free market capitalism. We have reached the point that all the manipulations interfere with the innovations & growth that free markets would produce. We are living through 'Capitulation of all the Manipulation' (the 'Keynesian Endpoint'). The manipulations of the last 5 or 6 decades have stifled the 'invisible hand' that makes free markets superior to centrally planned economies. In other words, Adam Smith has been defeated. Our system is more like Karl Marx's, but not in the way that most people think. A small group of wealthy 'capitalists' ended free markets when they were awarded monopoly control over the creation & distribution of the money. They called their group 'Federal' even though it is no more Federal & just as private as Federal Express. They used the word 'Reserve' even though they create money from no reserves at all. Their government contract to control America's money was the beginning of a long slippery slope away from free market capitalism to a centrally planned economy. Think about it: Free Markets When Money Is Privately Controlled? That is an OXYMORONIC. That is our system & it is OXYMORONIC.” CliffKule.com

   

 

FINANCIAL REPRESSION

STRIPS SAVERS, PENSIONERS,

PRUDENTIAL INVESTING &

REAL DISPOSABLE INCOME

TO FINANCE GOVERNMENT SPENDING

 

 

"

REAL GOVERNMENT BORROWING COSTS

CLOSE TO ZERO

 

 

The Fed will continue herding investors as long as it takes: first out of the money market funds, then out of bond funds, until the only possible investment product remains triple digit P/E stocks, and everyone is all the biggest market ponzi bubble of all time.

 

Click to Enlarge

"

Central-Planners Herd

Money Market Funds Into

Government Financing


“We’re definitely worried about breaking the buck,” Verett Mims, assistant treasurer at Chicago-based Boeing, said in a telephone interview on July 30. “That’s our biggest problem, the notion of principal preservation.”

READ MORE

As Bloomberg reports,

"one of the biggest winners in the push to make money-market funds safer for investors is turning out to be none other than the U.S. Government." (no surprise to the Financial Repression Authority!!!)

Rules adopted by regulators last month will require money funds that invest in riskier assets to abandon their traditional $1 share-price floor and disclose daily changes in value. For companies that use the funds like bank accounts, the prospect of prices falling below $1 may prompt them to shift their cash into the shortest-term Treasuries, creating as much as $500 billion of demand in two years, according to Bank of America Corp.

   

 

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)

"

 

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."

   

LATEST MACRO ANALYTICS ON FINANCIAL REPRESSION

 

LATEST UnderTheLens UPDATE ANALYSIS ON FINANCIAL REPRESSION

.

FINANCIAL REPRESSION TIMELINE

2014

2015

Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
-----
-----
-----
-----
-----
-----
-----
-----
^
^
^
^
^
     
BAIL-INS-EU
YELLEN / FISHER ON RECORD
MMF GATES
BAIL-INS-US
CAPITAL CONTROLS
     
   
^
 
^
     
   
BAIL-INS-US
 
PENSION CONTROLS
     

** Current Details Below

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."

 

Do you know the difference between a money market fund and a money market account? CNBC Personal Finance Reporter Sharon Epperson explains the big difference

BAIL-IN (GLOBAL - G20 LEGISLATION)

  • Canada: Department Of Finance Releases Proposal For Canadian Bail-In Regime Canada's government is looking to implement a bail-in regime to limit exposure to a government bailout - the idea is for troubled banks to shaft bank depositors of their bank deposits first .. "The G-20, including Canada, endorsed the Financial Stability Board's Key Attributes of Effective Resolution Regimes for Financial Institutions in 2011, a set of best practices for the resolution of financial institutions which contemplates the establishment of a bail-in regime."

PENSION CONTROLS

CAPITAL CONTROLS (CASEY RESEARCH ON COMING CAPITAL CONTROLS)

 

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

REGULATORY CONTROLS & ENFORCEMENT

  • U.S. Pushing Banks On Dodd-Frank Act To Make It Easier For Government To FREEZE YOUR MONEY - Financial Repression Via Regulations "The U.S. wants big banks to simplify their Dodd-Frank Act resolution plans so it's easier for government to freeze your money." .. Bloomberg reports on the progress made by Wall Street banks developing their "living wills" as part of the Dodd-Frank Act legislation attempting to minimize "too big to fail" banks .. Bloomberg: "The Federal Reserve and Federal Deposit Insurance Corp. told 11 of the largest U.S. and foreign banks, including JP Morgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS), that they botched their so-called living wills. The agencies ordered the banks to simplify their legal structures and revise some practices to make sure they can collapse without damaging the wider financial system." Jim Rickards:
  • Fischer worries about macroprudential policy- 07-10-14 FT Mr Fischer’s most interesting remarks relate to his experience with macroprudential policy in Israel. Israel’s bank supervisor used a range of tools to restrict mortgage lending and try to avert a housing bubble. Mr Fischer draws three lessons:
  • Basel Accord II and III - 05-16-14 Cliff Küle

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

.

.

.

.

.

Today's Tipping Points  || Audio/Video   ||  Presentations  ||  Commentary   ||   Understanding Abstraction   ||  Meet Gordon  ||   Subscriptions 

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.

 

FAIR USE NOTICE  This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.

 

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.

 

.

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.
ARCHIVES 

JULY - WEEK ENDING

S M T W T F S
20            
27            

AUGUST - WEEK ENDING

S M T W T F S
03            
10            
17            
24            
31            


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