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SPECIAL GUEST:MIKE ("Mish") SHEDLOCK , Publisher of the Global Economic Analysis Blog.
An espoused self educated Austrian Economist, Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Read more at http://globaleconomicanalysis.blogspot.com
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MISH SHEDLOCK TALKS FINANCIAL REPRESSION
Published 09-30-14
Mish Shedlock talks Financial Repression with Gordon T Long.
FINANCIAL REPRESSION
“Financial Repression is a set of fiscal & monetary policies for the express benefit of the ruling class – the politicians, the banks, and the already wealthy at the expense of everyone else”
THE GOAL
“It is about coercing the government into doing things that are in the express interest of the ruling class. The already wealthy are the ones who gain the most”
MISH CITES THE FOLLOWING EXAMPLES:
Quantitative Easing,
Interest Rate Suppression,
Bank Bailouts
China – They don’t let the Yuan float,
China- State Owned Enterprises for the benefit of the ruling class,
Europe – ECB with negative deposit rates,
Europe – LTRO and the T-LTRO,
JAPAN – Abe-nomics
Greece Bailout
Cyprus Bailout – Wealth got their money out but everyone else had their money confiscated to pay back the predominately German bond holders,
Public Unions,
Inflation is the Key Financial Repression Idea – It benefits the banks, politicians and wealthy
MISH ON "WAR"
“War is another example of Financial Repression. Who benefits? The war mongers – the banks, politicians and wealthy. You can’t even get elected if you don’t support war because the whole Military-Industrial Complex is behind it and you will be labeled ‘weak on defense’”
FINANCIAL BUBBLES
“Financial Bubbles are a direct result of all these policies for the benefits of the banks and wealthy …. That is what the Fed does. That is what central banks do. They blow bubbles over time for the benefits of banks and wealthy”
MISH ON KEYNESIAN ECONOMICS
“No one has gone back and proven how idiotic it all is. This idea that you can pay to dig a ditch and then have someone else fill it back up and this will add economic benefit is lunacy! Yet the average Keynesian believes that. A sixth grader would find in inherently ridiculous!”
MISH’S VIEW ON HOW INVESTORS CAN PROTECT THEMSELVES
“Don’t participate in bubbles!! Get out of the financial markets. Buy some Gold and wait."
THE COMING CURRENCY CRISIS
Mish believes a currency crisis is coming which is most likely to start outside the US in likely Europe or Japan.
“This environment fosters banks and the wealthy to speculate. When it ends badly and we have to bail them out the average guy on the street is going to pay for it – again”
KEY MESSAGE
If you don’t have money in Gold - Get some!
If you are still speculating in financial bubbles – Stop.
Look outside the box – Look outside the US
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SPECIAL GUEST HOST:JOHN RUBINO, Author & Publisher of DollarCollapse.com
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CARTELS, MONOPOLIES & CRONY CAPITALISM
Today's new dominating business model.
Published 09-23-14
John Rubino is quite blunt when he states:
"Crony Capitalism is now the dominate business model operating in the US! Most big corporations employ legions of lobbyists and throw millions of dollars at manipulating the political and regulatory process!"
Political office to his trained eye "has become nothing more than an extended job interview" for the high paying lobbyist jobs expected after leaving political office, financed by new corporate competitive strategies.
Rubino places the blame for this unintended consequence primarily on the policy of "Unsound Money" and a consumption based economy. John sees the banks and major corporations becoming more and more powerful to the extent that we no longer have separation. "We now have one big organization, where the big organization becomes dedicated to self perservation. Size and power is now the goal, not serving customers and not necessarily a honest process. They are doing this by taking advantage of the regulatory process."
He spells out why he believes a return to 'Sound Money" is the only way the process can be halted or reversed. The rate of expansion of government and the financialization of the economy suggests the situation is now so serious in the US that the only likely outcome will be a major financial and economic crisis. "It isn't a free market anymore!"
The clear goal of the current expanding monolithic government is nothing more than to "dole out more and more goodies to the people who are able to pay for those goodies!". Though he sincerely hopes the expected crisis will "right the ship", he is highly skeptical. History suggests otherwise to him.
The influence of corporations on government regulations to gain competitive advantage, risk avoidance and financial growth are being driven by the size of the government in the economy and increasing centralized control. Crony Capitalism as a consequence was therefore inevitable and expected by many - though highly undesirable by most.
"Money today is more and more made by people who place bets on the market and use regulations to move the markets in that direction, book a profit and move on. No real wealth is generated, only transferred."
Unfortunately, there are no counter-forces except public awareness and their organized attempts to stop it!
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GordonTLong on WallStrforMainStr.com FINANCIAL REPRESSION
SPECIAL APPEARANCE:GordonTLong on WallStrforMainStr.com
Gordon T Long: Financial Repression Killing Middle Class & Capitalism Itself
WallStrForMainStr Interviews Gordon T Long:
"We have over 250 interviews with top guests in discussion. The Gordon T Long discussion is over an hour long and one of the best ones we've done all year."
SPECIAL GUEST:RONALD-PETER STOEFERLE , Partner Incrementum Liechtenstein
Prior he worked for Raiffeisen Zentralbank (RZB) in the field of Fixed Income/Credit Investments and then later on joined Erste Group Bank, covering International Equities, especially Asia. In 2006 he began writing reports on gold and gained media attention when he expected the price of gold to rise to USD 2,300/ounce when the current price was only at USD 500.His six benchmark reports called "In GOLD we TRUST" drew international coverage on CNBC, Bloomberg, the Wall Street Journal, Economist and the Financial Times. He was awarded "2nd most accurate gold analyst" by Bloomberg in 2011. He also writes reports on crude oil. Mr. Stoeferle is managing two gold mining-baskets and one basket for silver mining-equities. He studied business administration and finance at the Vienna University of Economics and the University of Illinois at Urbana-Champaign. Mr. Stoeferle is also a Chartered Market Technician (CMT) and a Certified Financial Technician (CFTe).
OPEN ACCESS
Published 09-12-14
35 Minutes with Slides
Ronald-Peter Stoeferle is a noted Austrian economist and money manager who believes strongly that “we should expect that financial repression as well as wealth taxes in various facets which will increasingly gain in importance in coming years". He believes "this to be a disastrous strategy, as the redistribution will merely buy time, while the structural problems remain unsolved.”
FINANCIAL REPRESSION
“Financial repression always consists of a combination of different measures, which lead to a significant narrowing of the universe of investable assets for investors. Money which in a more liberal investment environment would have flowed into other asset classes, is channeled in a different direction. The goal of financial repression is an indirect reduction of government debt by means of the targeted manipulation of the cost of government debt, most of the time accompanied by steady inflation.”
"Financial repression is ultimately a government imposed transfer of wealth.”
Developed country governments because of their previous policy stances now have only two monetary options. Financial Repression is the course that has been chosen. This is because it is preferably to have “quiet debt reduction” achieved by :
- Direct or indirect capping of interest rates (especially on government bonds),
- Measures such as forcing domestic investors to invest in domestic capital markets, such as capital controls and regulations forcing institutional investors to hold portfolios with a “home bias”,
- Taxes that make alternative investments more expensive (e.g. transaction taxes),
- Measures that imply a direct or indirect influence of government on financial institutions (macro-prudential regulation),
- Negative deposit interest rates, which increase the incentive for banks to invest in relatively risk-free assets. Banks are thus encouraged to monetize government debt – something that can rightly be called an inflation policy.
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Regular Co-Host:CHARLES HUGH SMITH , Author & Publisher of OfTwoMinds.com
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with Charles Hugh Smith & Gordon T Long
24 Minutes, 17 Slides
Why has classical capitalism devolved to crony-capitalism/crony-kleptocracies?
In this 24 minute video Gordon T Long and Charles Hugh Smith discuss through the aid of 17 slides the rapid advancement of Crony Capitalism in America. The facts are undeniable, but why is it becoming so obvious and undeniable? Why is it accelerating without any apparent 'checks and balances'? Where have the safeguards against this happening gone?
Understanding Why This Is Happening
1. Those who control most of the wealth are willing to risk systemic collapse to retain their privileges and wealth. Due to humanity’s virtuosity with rationalization, those at the top always find ways to justify policies that maintain their dominance and downplay the distortions the policies generate. This as true in China as it is in the U.S.
2. Short-term thinking: if we fudge the numbers, lower interest rates, etc. today, we (politicians, policy-makers, money managers, etc.) will avoid being sacked tomorrow. The longer term consequences of these politically expedient policies are ignored.
3. Legitimate capital accumulation has become more difficult and risky than buying political favors. Global competition and the exhaustion of developed-world consumers has made it difficult to reap outsized profits from legitimate enterprise. In terms of return-on-investment (ROI), buying political favors is far lower risk and generates much higher returns than expanding production or risking investment in R&D.
4. The centralization of state/central bank power has increased the leverage of political contributions/lobbying. The greater the concentration of power, the more attractive it is to sociopaths and those seeking to buy state subsidies, sweetheart contracts, protection from competition, etc.
5. Any legitimate reform will require dismantling crony-capitalist/state-cartel arrangements. Since that would hurt those at the top of the wealth/power pyramid, reform is politically impossible.
6. Understood in this light, it’s clear that central bank monetary policy—zero-interest rates, asset purchases, cheap credit to banks and financiers, QE, etc.—is designed to paper over the structural problems that require real reform.
Japan is a case in point: the Powers That Be in Japan have put off real reforms of the Japanese economy and political system for 25 years, and they’ve enabled this avoidance by pursuing extremes of fiscal and monetary policy that have eroded the real economy and created long-term structural imbalances.
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SPECIAL GUEST: JEFF BERWICK is a Canadian entrepreneur, libertarian and anarcho-capitalist activist who founded StockHouse Media Corporation in 1994, one of the most active financial website in Canada. He remained CEO until 2002. In 2013, Berwick announced plans to co-found the world's first Bitcoin automated teller machine (ATM). He presently resides in Acapulco, Mexico and is Chief Editor of THE DOLLAR VIGILANTE
OPEN ACCESS
Published 09-05-14
A 32 Minute PODCAST
The founder of the well recognized Canadian web site Stockhouse Media Corporation and CEO until 2002, Jeff Berwick says “around 2003 I woke up and started studying and learning (and I am still doing that to this day) and the more you learn the deeper this 'rabbit hole' gets! We are living under a financial system that is completely not real! People are going to find this out pretty soon!”
Berwick defines Capitalism as "the free voluntary transactions of human beings where every transaction improves the lives of eveyone. They (government) have been portraying capitalism as evil."
Because of this the future suggests to Berwick that " whoever loses the least over the next decade, will win the most! It is going to be a game of not losing everything."
"We are going to go through the 'Great Transition' in the not to distant future which the internet will facilitate and could potentially be the saviour of humanity. The real issue over the next few years is trying to get enough people to understand what is wrong about this world and what could be right about it. Then let the people decide"
His recommendation for Americans who he believes 'are the most asleep people in the world (from his perspective living outside America), is to "put your assets into hard assets that Janet Yellen can't counterfeit into obscurity."
FINANCIAL REPRESSION in Jeff Berwicks words:
“Financial Repression all started in 1913 with the foundation of the third central bank of the US, the Federal Reserve. Income tax came into existance with the same act which people should find interesting! .... The Repression as you call it (Oppresssion as I call it) of the Central Banking, Communist System has been hidden from people because of a tremendous amount of productivity.... the government and bankers tell people things are good because of them - in actuality things are worse because of them - a lot worse. Hardly anyone sees this.... they have taken away from the true human potential.”
The answer is that "we need an awakening where people begin to realize what is going on and move beyond this really horrible system of statist, communists, central bankers, fiat currencies and go to a solid money (like precious metals and bitcoin) and allow the markets to make decisions".
"People need to wake up, turn off their TV (it is literally 'programming') and start listening to real information. People need to break free from these chains. If they don't, unfortunately they will get hurt in this coming "Great Transition". As in life someone always has to pay for mistakes and some people are ging to pay more than others. We are unfortunately all going to have to pay. It is going to be a dramatic period and incredibly stressfull.... America is going to be ground zero for this transition "
"There is going to be a great evolution in everything
we know today in the next decade. It is going to be biblical in proportion. The sooner you start to look into these things (whether gold, silver, real estate, bitcoin) the better"
THIS IS A PODCAST ONLY
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SPECIAL GUEST:EGON von GREYERZ , Founder & Managing Partner, Matterhorn Asset Management AG and GOLDSwitzerland.
OPEN ACCESS
Published 09-03-14
33 Minutes with 35 Slides
A former banker, Corporate Vice Chairman of a FTSE 100 corporation and founder of Matterhorn Asset Management AG, Egon von Greyez “strongly believes there will be massive wealth destruction in the next few years”.
Von Greyerz personally defines Financial Repression in practical terms as the “manipulation and interference by government in the running of the economy and the lives of normal people”. What this will inevitably lead to he feels will be the “total control of the people and a police state – that is the way we are going in some countries!”
He has been worried about what is presently unfolding since the 1980’s and is very troubled about what he has witnessed and what he clearly saw was coming. “All this was inevitable. It is ridiculous for the central bankers to say they didn’t see this coming. Anyone with just a little bit of intelligence could have seen this coming (of course you can’t be a politician who never see things coming and central bankers are politicians)”.
“Anything that goes up exponentially will come down very fast - at some point! …. there will be massive fall in inflation, implosion of the monetary system and implosion of assets – and that is to come!”
“The Federal Reserve was created in 1913 by the Bankers for the benefit of the bankers and since then we have had inflation for their benefit. Once the US became the world’s reserve currency the bankers controlled the whole world”.
The reason there is no way out is because “the only policy has been to ‘kick the can down the road’ and only thing central bankers have done is to pass it on to others, hoping they would survive their term and someone else would take over the problems. They can see the problems, they can see the risk. They can’t talk about it. They only have one solution. They have held interest rates at zero which is obviously ridiculous and one example of Financial Repression, and they have printed unlimited amounts of money and has now reached a point where it no longer has an effect.”
There is a lot of things investors can do to protect themselves from Financial Repression which Egon von Greyerz discusses for the listeners.
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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.
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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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SCHEDULE
2. Short-term thinking: if we fudge the numbers, lower interest rates, etc. today, we (politicians, policy-makers, money managers, etc.) will avoid being sacked tomorrow. The longer term consequences of these politically expedient policies are ignored.
