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
Life insurer MetLife is waiting to see if it will be designated this year, while its smaller rival
LARGEST ASSET MANAGERS: On July 31, FSOC decided for now to lift the threat of systemic risk designations for the largest asset managers, but said it would focus on the industry’s products and activities.
PRIVATE EQUITY & HEDGE FUNDS: The review of asset managers came after an FSOC-commissioned report on the industry, which also said it was reviewing private equity and hedge funds, prompting predictions that those sectors could be next on the council’s agenda.
DON'T EXPECT SOCIAL SECURITY TO BE THERE TO SAVE YOU!
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
Ten year constant maturity Treasury yields (blue), ten year constant maturity yields minus ten year (median) expected inflation (red +), and ten year constant maturity TIPS (black). NBER defined recession dates shaded gray. Source: Federal Reserve via FRED, Survey of Professional Forecasters, and author’s calculations.
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.
“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.”
"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.
“Whether investors move into government institutional money-market funds or just buy securities themselves, there will be a large demand” for short-dated debt, Jim Lee, head of U.S. derivatives strategy at Royal Bank of Scotland Group Plc’s capital markets unit in Stamford, Connecticut, said in a telephone interview on July 28. “That will lower yields.”
He predicts investors may shift as much as $350 billion to money-market funds that invest only in government debt.
Bank of America, which also has hated Treasurys as an asset class since mid-2013, also chimes in:
Investors using prime funds to manage their idle cash may find floating prices an unnecessary risk when differences in fund rates are so minimal, said Brian Smedley, an interest-rate strategist at Bank of America in New York. He estimates about half the $964 billion held in institutional prime funds will flow into those that only invest in government debt and yield about 0.013 percentage point less, before the new rules become fully effective in 2016.
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
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
“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 RegimeCanada'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."
CAPITAL CONTROLS (CASEY RESEARCH ON COMING CAPITAL CONTROLS)
1: IMF Endorses Capital Controls
Bloomberg reported in December 2012 that the “IMF has endorsed the use of capital controls in certain circumstances.“ This is particularly important because the IMF, arguably an even more prominent institution since the global financial crisis started, has always had an official stance against capital controls. “In a reversal of its historic support for unrestricted flows of money across borders, the IMF saidcontrols can be useful...” Will individual governments jump on this bandwagon? “It will be tacitly endorsed by a lot of central banks,”says Boston University professor Kevin Gallagher. If so, it could be more than just your home government that will clamp down on storing assets elsewhere.
2: There Is Academic Support for Capital Controls
Many mainstream economists support capital controls. For example, famed Harvard Economists Carmen Reinhart and Ken Rogoff wrote the following earlier this year:
Governments should consider taking a more eclectic range of economic measures than have been the norm over the past generation or two. The policies put in place so far, such as budgetary austerity, are little match for the size of the problem, and may make things worse. Instead, governments should take stronger action, much as rich economies did in past crises.
Aside from the dangerously foolish idea that reining in excessive government spending is a bad thing, Reinhart and Rogoff are saying that even more massive government intervention should be pursued. This opens the door to all kinds of dubious actions on the part of politicians, including—to my point today—capital controls.
“Ms. Reinhart and Mr. Rogoff suggest debt write-downs and ‘financial repression’, meaning the use of a combination of moderate inflation and constraints on the flow of capital to reduce debt burdens.” The Reinhart and Rogoff report basically signals to politicians that it’s not only acceptable but desirable to reduce their debts by restricting the flow of capital across borders. Such action would keep funds locked inside countries where said politicians can plunder them as they see fit.
3: Confiscation of Savings on the Rise
“So, what’s the big deal?” Some might think. “I live here, work here, shop here, spend here, and invest here. I don’t really need funds outside my country anyway!” Well, it’s self-evident that putting all of one’s eggs in any single basket, no matter how safe and sound that basket may seem, is risky—extremely risky in today’s financial climate. In addition, when it comes to capital controls, storing a little gold outside one’s home jurisdiction can help avoid one major calamity, a danger that is growing virtually everywhere in the world: the outright confiscation of people’s savings.
The IMF, in a report entitled “Taxing Times,” published in October of 2013, on page 49, states: “The sharp deterioration of the public finances in many countries has revived interest in a capital levy—a one-off tax on private wealth—as an exceptional measure to restore debt sustainability.”
The problem is debt. And now countries with higher debt levels are seeking to justify a tax on the wealth of private citizens. So, to skeptics regarding the value of international diversification, I would ask: Does the country you live in have a lot of debt? Is it unsustainable? If debt levels are dangerously high, the IMF says your politicians could repay it by taking some of your wealth.
The following quote sent shivers down my spine…
The appeal is that such a task, if implemented before avoidance is possible and there is a belief that is will never be repeated, does not distort behavior, and may be seen by some as fair. The conditions for success are strong, but also need to be weighed against the risks of the alternatives, which include repudiating public debt or inflating it away.
The IMF has made it clear that invoking a levy on your assets would have to be done before you have time to make other arrangements. There will be no advance notice. It will be fast, cold, and cruel. Notice also that one option is to simply inflate debt away. Given the amount of indebtedness in much of the world, inflation will certainly be part of the “solution,” with or without outright confiscation of your savings. (So make sure you own enough gold, and avoid government bonds like the plague.)
Further, the IMF has already studied how much the tax would have to be: The tax rates needed to bring down public debt to pre-crisis levels are sizable: reducing debt ratios to 2007 levels would require, for a sample of 15 euro area countries, a tax rate of about 10% on households with a positive net worth. Note that the criterion is not billionaire status, nor millionaire, nor even “comfortably well off.” The tax would apply to anyone with a positive net worth. And the 10% wealth-grab would, of course, be on top of regular income taxes, sales taxes, property taxes, etc.
4: We Like Pension Funds
Unfortunately, it’s not just savings. Carmen Reinhart (again) and M. Belén Sbrancia made the following suggestions in a 2011 paper:
Historically, periods of high indebtedness have been associated with a rising incidence of default or restructuring of public and private debts. A subtle type of debt restructuring takes the form of ‘financial repression.’ Financial repression includes directed lending to government by captive domestic audiences (such as pension funds), explicit or implicit caps on interest rates, regulation of cross-border capital movements, and (generally) a tighter connection between government and banks.
Yes, your retirement account is now a “captive domestic audience.” Are you ready to “lend” it to the government? “Directed” means “compulsory” in the above statement, and you may not have a choice if “regulation of cross-border capital movements”—capital controls—are instituted.
5: The Eurozone Sanctions Money-Grabs
Germany’s Bundesbank weighed in on this subject last January:
“Countries about to go bankrupt should draw on the private wealth of their citizens through a one-off capital levy before asking other states for help.”
The context here is that of Germans not wanting to have to pay for the mistakes of Italians, Greeks, Cypriots, or whatnot. Fair enough, but the “capital levy” prescription is still a confiscation of funds from individuals’ banks or brokerage accounts.
Here’s another statement that sent shivers down my spine:
A capital levy corresponds to the principle of national responsibility, according to which tax payers are responsible for their government’s obligations before solidarity of other states is required.
The central bank of the strongest economy in the European Union has explicitly stated that you are responsible for your country’s fiscal obligations—and would be even if you voted against them! No matter how financially reckless politicians have been, it is your duty to meet your country’s financial needs.
This view effectively nullifies all objections. It’s a clear warning.
And it’s not just the Germans. On February 12, 2014, Reuters reported on an EU commission document that states:
The savings of the European Union’s 500 million citizens could be used to fund long-term investments to boost the economy and help plug the gap left by banks since the financial crisis.
Reuters reported that the Commission plans to request a draft law, “to mobilize more personal pension savings for long-term financing.”
EU officials are explicitly telling us that the pensions and savings of its citizens are fair game to meet the union’s financial needs. If you live in Europe, the writing is on the wall.
Actually, it’s already under way… Reuters recently reported that Spain has
…introduced a blanket taxation rate of .03% on all bank account deposits, in a move aimed at… generating revenues for the country’s cash-strapped autonomous communities.
The regulation, which could bring around 400 million euros ($546 million) to the state coffers based on total deposits worth 1.4 trillion euros, had been tipped as a possible sweetener for the regions days after tough deficit limits for this year and next were set by the central government.
Some may counter that since Spain has relatively low tax rates and the bail-in rate is small, this development is no big deal. I disagree: it establishes the principle, sets the precedent, and opens the door for other countries to pursue similar policies.
6: Canada Jumps on the Confiscation Bandwagon
You may recall this text from last year’s budget in Canada:
“The Government proposes to implement a bail-in regime for systemically important banks.”
A bail-in is what they call it when a government takes depositors’ money to plug a bank’s financial holes—just as was done in Cyprus last year.
This regime will be designed to ensure that, in the unlikely event a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital.
What’s a “bank liability”? Your deposits. How quickly could they do such a thing? They just told us: fast enough that you won’t have time to react.
By the way, the Canadian bail-in was approved on a national level just one week after the final decision was made for the Cyprus bail-in.
7: FATCA
Have you considered why the Foreign Account Tax Compliance Act was passed into law? It was supposed to crack down on tax evaders and collect unpaid tax revenue. However, it’s estimated that it will only generate $8.7 billion over 10 years, which equates to 0.18% of the current budget deficit. And that’s based on rosy government projections.
FATCA was snuck into the HIRE Act of 2010, with little notice or discussion. Since the law will raise negligible revenue, I think something else must be going on here. If you ask me, it’s about control.
In my opinion, the goal of FATCA is to keep US savers trapped in US banks and in the US dollar, in case the US wants to implement a Cyprus-like bail-in. Given the debt load in the US and given statements made by government officials, this seems like a reasonable conclusion to draw.
This is why I think that the institution of capital controls is a “when” question, not an “if” one. The momentum is clearly gaining steam for some form of capital controls being instituted in the near future. If you don’t internationalize, you must accept the risk that your assets will be confiscated, taxed, regulated, and/or inflated away.
What to Expect Going Forward
First, any announcement will probably not use the words “capital controls.” It will be couched positively, for the “greater good,” and words like “patriotic duty” will likely feature prominently in mainstream press and government press releases. If you try to transfer assets outside your country, you could be branded as a traitor or an enemy of the state, even among some in your own social circles.
Controls will likely occur suddenly and with no warning. When did Cyprus implement their bail-in scheme? On a Friday night after banks were closed. By the way, prior to the bail-in, citizens were told the Cypriot banks had “government guarantees” and were “well-regulated.” Those assurances were nothing but a cruel joke when lightning-fast confiscation was enacted.
Restrictions could last a long time. While many capital controls have been lifted in Cyprus, money transfers outside the country still require approval from the Central Bank—over a year after the bail-in.
They’ll probably be retroactive. Actually, remove the word “probably.” Plenty of laws in response to prior financial crises have been enacted retroactively. Any new fiscal or monetary emergency would provide easy justification to do so again. If capital controls or savings confiscations were instituted later this year, for example, they would likely be retroactive to January 1. For those who have not yet taken action, it could already be too late.
Social environment will be chaotic. If capital controls are instituted, it will be because we’re in some kind of economic crisis, which implies the social atmosphere will be rocky and perhaps even dangerous. We shouldn’t be surprised to see riots, as there would be great uncertainty and fear. That’s dangerous in its own right, but it’s also not the kind of environment in which to begin making arrangements.
Ban vs. levy. Imposing capital controls is a risky move for a government to make; even the most reckless politicians understand this. That won’t stop them, but it could make them act more subtly. For instance, they might not impose actual bans on moving money across borders, but instead place a levy on doing so. Say, a 50% levy? That would “encourage” funds to remain inside a given country. Why not 100%? You could be permitted to transfer $10,000 outside the country—but if the fee for doing so is $10,000, few will do it. Such verbal games allow politicians to claim they have not enacted capital controls and yet achieve the same effect. There are plenty of historical examples of countries doing this very thin
Keep in mind: Who will you complain to? If the government takes a portion of your assets, legally, who will you sue? You will have no recourse. And don’t expect anyone below your tax bracket to feel sorry for you.
POLICY CONTROLS (Monetary, Fiscal, Public & Tax Policy)
.
This Is Going To Destabilize The Entire World Financial System Ronald-Peter Stoferle, Incrementum AG "Bond prices in practically all industrialized nations are near all-time highs. Never before have interest rates been this low on a global basis. If one examines these events more closely, it becomes clear that the underlying problems cannot be solved by global zero interest rate policy, but that the natural selection process of the market is instead being undermined .. Interest rates are the heart, soul and life of the free enterprise system .. This truth is however veiled and distorted at the moment. Governments, financial institutions, entrepreneurs and consumers that are acting in an uneconomic manner are thus kept artificially afloat. As a result, instead of them being punished for their errors, these errors are perpetuated. Protraction of this process of selection leads to a structural weakening of the economy, and a concomitant increase in the system's fragility .. Declining interest rate levels make a gradual increase in public indebtedness possible, while the interest burden (as a share of government spending) does not grow .. Without negative real interest rates, the steadily growing mountains of debt would long ago have ceased to be sustainable. Central banks are increasingly prisoners of the policy of over-indebtedness .. Central banks and governments are currently trying to create an increase in prosperity out of nothing. Such a monetary perpetuum mobile would be quite desirable for humankind, however, historically such attempts have at best led to a brief sugar high followed by a major hangover.
Alasdair Macleod On The Markets: Keep Calm & Carry On"Investment is now all about the trend and little else. You never have to value anything properly any more: just measure confidence. This approach to investing resonates with post-Keynesian economics and government planning. The expectations of the crowd, or its animal spirits, are now there to be managed. No longer is there the seemingly irrational behaviour of unfettered markets dominated by independent thinkers. Forward guidance is just the latest manifestation of this policy. It represents the triumph of economic management over the markets .. Doubtless there is a growing band of central bankers who believe that with this control they have finally discovered Keynes’s Holy Grail: the euthanasia of the rentier and his replacement by the state as the primary source of business capital. This being the case, last month’s dip in the markets will turn out to be just that, because intervention will simply continue and if necessary be ramped up .. But in the process, all market risk is being transferred from bonds, equities and all other financial assets into currencies themselves; and it is the outcome of their purchasing power that will prove to be the final judgement in the debate of markets versus economic planning."
The Fed's Financial Repression At Work: How Big Blue Was Turned Into A Wall Street Slush Fund David Stockman -- "IBM is a poster child for the ill-effects of the Fed’s financial repression. In effect, the Fed’s zero interest rate policies are telling big companies to issue truckloads of debt and use the proceeds to buyback shares hand-over-fist. That way fast money speculators on Wall Street are appeased by the resulting share price lift, and top executives collect bigger winnings on their stock options."
BoJ To Engage In 'Financial Repression'; We Stay Long USD/JPY - BNPP 07-11-14 eFX News "Japan now has one of the highest inflation rates in the G10. Our economists expect the BoJ to engage in ‘financial repression’ to restrain the rise in JGB yields that results from Japan’s fiscal dynamics," BNPP says as a rationale behind this view. "A larger overshoot in Japan’s inflation rate would also see the yen weaken. If inflation gets out of hand, we could, our economists suggest, see an ‘operation twist’ policy in Japan – similar to that witnessed in the US. This would entail aggressive purchases of JGBs coupled with interest rate hikes to stave off inflation. The resultant inversion in the yield curve, along with the upside shock to inflation, is a risk scenario for Japan and the ensuing adverse growth-inflation paradigm would necessarily entail a weaker yen," BNPP argues. "In addition, a re-allocation in the government pension investment fund (GPIF) and a likely pick-up in Japanese outflows will mean JPY weakens," BNPP adds.
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:
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
The Indirect Exchange - The Expert in the Indirect Exchange is Ty Andros, Tedbits
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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.
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.
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.
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
**FRA POST
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. 
