Don’t look now but you are living in the financial repression era. Financial Repression is when governments borrow, flood other countries with their money and even buy foreign bonds in an effort to get the boom going again. The U.S. dollar of 1913 (when the Federal Reserve Bank monopoly cartel was formed) is now worth three cents. They ruin the value of their money planning to pay it back with depreciated paper. They never pay it back though. It should be criminal. It does help business trade with other countries in the short term, but the cyclic swings can confuse corporations completely causing recessions in the short run and eventually depressions to correct all the excesses arising from government meddling with the economy.
Stupendous spikes in government debt occurred in the 1930’s depression and in the 1980’s debt crisis. Today, financial repression is dogging China due to their holding of trillions of dollars of U.S. debt. Currently, inflation is keeping their engine running. For how long is the question?
Financial repression rears it’s ugly head when governments borrow from investors, pensions, hedge funds, banks and other countries. In addition, governments use interest rate manipulation caps, the regulation of movement of capital across boarders and increased transparency. More transparency equals increased regulation if you want a short definition. Tight money! Like right now. The world banking meltdown of 2007 and 2008 caused banks to restrict lending.
Anyway, the gist of repression is that government waters down it’s currency to pay for borrowing. Just like a drug dealer who cuts his dope in order to sell more. It is actually government bankruptcy! They have been inflating our money with worth – less paper. Fiat money. Fiat money is money with no gold backing. History has shown that fiat currencies always go bust.
Austrian economics maintains that fiat money created out of thin air along with fractional reserve banking leads to runaway credit inflation which always ends in a credit deflation crash.
Now days, they just create money with a computer entry. The FED sells government bonds and Tbills and credits the government’s account. No need to waste any paper. Ha! Ha! The result is that assets boom and bust. First real estate crashes. Gold and stocks follow a couple of years later. You can plan on a 90% drop in most asset prices by 2016. Robert Prechter says interest rates may spike up as people borrow to stay afloat.
Our federal government ramped up financial repression in the great depression, the 1980’s debt crisis, the 1990’s savings and loan debacle, LTCM (Long Term Capital Management) crisis in 1998 and the recent 2007 sub prime mortgage financial crisis.
Ben Bernanke, head of the FED, like other Keynesian socialist statisticians of the past is trying to pump money into the economy with QE1 and QE2. But, cries for debt reduction and for an end to the insane borrowing that has ballooned the national debt to $14.5 trillion dollars grow.
Government financial repression is a rip off ruin of savers, the elderly on fixed incomes and the whole bottom half of the population that can’t invest to ward inflation off. GAME OVER! The Greater Depression started in 2000 with the dot com mania stock peak. We’ve been in the Greater Depression for 11 years now. The CPI says so. In fact, the chart of the CPI shows it reversing down recently after hitting the 62% (golden number) retracement level.
The Anglo financial power elite banksters have had it with their money losing value. Most of their assets are in the U.S. where it’s safer. The dollar will be strong. They have already sold most of their real estate. Now, they will be dumping stocks, commodities and junk bonds. The same thing happened in the roaring 20’s leading up to the depression. Bankers back then saw high inflation rates threatening to make their loans worth next to nothing when they were finally paid off. 10% inflation times 10 years equals zilch purchasing value. Zero! Nada!
Franklin Roosevelt started us on this path of growing government socialism to the moon. President Barack Hussien Obama, Ben Bernanke, Alan Greenspan and all the Keynesian do-gooders in the past joined in the charade. It’s better to lower taxes and let business do the hiring. The jobs in the New Deal were gone when the project ended. Weren’t they? Free enterprise creates real lasting jobs. Not more socialism! Not more government!
What a myth the New Deal was – along with the myth about WWII getting us out of the depression. Ha! It was coming out anyway. When does wasting tons of resources and killing hundreds of thousands of your workers really help? Government will probably balloon the debt even more trying to stop the pendulum of deflation from swinging in a mistaken Keynesian ploy. It can’t be stopped this time. It’s too big! QE1 & QE2 money will just disappear like one third of real estate values have. Already, banks are getting “transparency” treatments. Banks are getting huge amounts of government oversight and are setting tighter internal lending standards. Banks aren’t lending. In fact, banks are in trouble. Pre-tax profits at six major lenders fell 40.2% in the first quarter of 2011. Deflationary! Greater Depression dead ahead!
Only a private gold backed money will stop government repression reflation from rearing it’s ugly head again. Lobby for it or else we get a hyperinflation deja’ vu all over again.
Forget about inflation. First, we get the Greater Depression three times larger than the one in the 1930’s due to Elliott wave & fibonacci number scale. Can you say Grand Super Cycle scale?. That’s an Elliot wave principle term that you should know about. Have you read “Conquer the Crash” by Robert Prechter? You had better, or else financial repression will head-fake you! Get an 8 chapter download free at my website.
President Obama is ruining the economy with borrowing, socialism like ObamaCare and increased government spending. Now, he wants to raise taxes to pay for his investments? His “investments” are covert communist code comrade for bigger government. When has government made a profit or done anything more efficiently than the free market? Obama is a one-world-government/new-world-order “Big Brother.” He is trampling on the Constitution, ruining America and killing “goose that laid the golden egg” of free enterprise all at the same time. Do not re-elect this tyrant. Your liberty and freedom are at stake.The only cure for inflation is deflation. Sorry. It’s true. The Greater Depression will catch all those thinking they can pay the huge debt with financial repression and a cheaper dollar. They will get caught with their pants down. Hardly anyone will be making money. Tax revenues will collapse even more than they already have.