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Friday
November 28th
2014

AUDIO PODCAST

DAN AMERMAN on FINANCIAL REPRESSION

Dan Amerman

 

SPECIAL GUEST: Daniel R. Amerman is a financial futurist, author, speaker, and consultant with over 20 years of financial industry experience. He is a Chartered Financial Analyst (CFA), and holds MBA and BSBA degrees in Finance from the University of Missouri. He has spent seven years developing a large, unique and intertwined body of work, that is devoted to using the foundation principles of economics and finance to try to understand the retirement of the Baby Boom from the perspective of the people who will be paying for it.

OPEN ACCESS

Published 11-28-14

42 Minutes

Is there a "Back Door" method for the government to pay down the federal debt using private savings?

Daniel Amerman says emphatically, YES! It is called FINANCIAL REPRESSION, though as a former banker Amerman likes to think of it in more accounting terms like liabilities and assets.

In practice there are four primary methods which a nation can use to pay down excessive debts incurred to support spendthrift habits and political obligations.

  1. AUSTERITY: Decades of Austerity,
  2. DEFAULT: Defaulting on government debts,
  3. DEBASEMENT: Inflating away the value of the debt though slashing the value of the currency,
  4. POLICY: Process of Financial Repression

Financial Repression is a subtle method of taking vast sums of private wealth with no political consequences. It has strong advantages for the government:

  1. It works in practice and has been used successfully before ( 1945 - 1970),
  2. Almost No Political Damage,

Financial Repression uses a combination of INFLATION and government control of INTEREST RATES in an environment of CAPITAL CONTROLS to CONFISCATE much of the PURCHASING POWER of the nation's private savings.

The government methodically uses regulations over a period of many years to force a negative rate of return onto investors (in inflation adjusted terms) so that the real wealth of savers shrinks by an average of 3-4% per year.

A SHEEP SHEERING STRUCTURE

 

The characteristics of postwar era "Sheep Sheering" are:

  1. Inflation,
  2. Government control of Interest Rates to guarantee Negative Real Rates of Return,
  3. The Funding of government debt by financial institutions,
  4. Capital controls,
  5. Discouragement of Precious Metals investment.

If you real want to understand FINANCIAL REPRESSION, this is where you start.

 

 

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Tuesday
November 25th
2014

WHAT ARE THE RICH DOING WITH THEIR MONEY?

 

John Rubino

 

SPECIAL GUEST HOST: JOHN RUBINO, Author & Publisher of DollarCollapse.com

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WHAT ARE THE RICH DOING WITH THEIR MONEY?

Published 11-25-14

30 Minutes

John feels the global economy is slowing down dramatically.

THE PREDICAMENT

The rich see this and fully expect sovereign nations to attempt to "print their way out" by debasement and policies of Financial Repression.

As a consequence the "Rich" are taking knowing actions to protect their wealth.

 

“The rich have way more money than they know what to do with even in a deflationary world and are buying shiny baubles at any price just to get out of their financial assets.”

They are getting out of paper and moving to hard assets that have an intrinsic store of wealth.

A world with both inflation and deflation at the same time, seems to violate most economic theories and probably can't be sustained.

How does it resolve? 

Join John and Gord in this 30 minute discussion on what this means going forward.

 

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Monday
November 24th
2014

AXEL MERK on FINANCIAL REPRESSION

Axel Merk

 

SPECIAL GUEST: AXEL MERK , is the President and Chief Investment Officer of Merk Investments, manager of the Merk Funds. He is a recognized expert on the global economy, monetary policy and international investing.

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Axel Merk is a recognized authority on currencies and is a pioneer in the use of strategic currency investing to seek diversification. He has been named a “Currency Guru” by Morningstar. Axel Merk is a regular guest on CNBC, FoxBusiness and Bloomberg. His columns and interviews frequently appear in the Financial Times, Wall Street Journal, Barron’s and other financial media around the world. Merk is a sought after expert speaker at industry conferences, including the annual conferences of the CFA, FPA and AAII, as well as at universities, government organizations and think tanks. Merk's expertise encompasses topics ranging from the global economy, gold and currencies to sustainable wealth and personal finance. Axel Merk’s Book “Sustainable Wealth” was published by Wiley in 2009 and his newsletter Merk Insights reaches a wide audience of investors, analysts and media following global macroeconomic issues and implications to investing.

Published 11-24-14

PODCAST - 25 Minutes

FINANCIAL REPRESSION

"In a nutshell, it is ways governments are trying to deprive you of purchasing power because the government has too much debt and must debase the value of the debt."

"Through the backdoor the government is trying to take some of your net worth .... It is a wealth TRANSFER from savers to those who have piled up a excess debt" "It is most commonly done through negative real interest rates!"

CENTRAL BANK INFLATION GOALS

"You often don't have enough inflation in the world when you have too much debt".

This is why the US, the EU and Japan are trying frantically get inflation up, despite it being bad for the average citizen or saver.

Axel Merk believes that if in 10 years we were to get back to historic bond level,s then there would be an addition $1 trillion in government interest rates. The fed is simply not going to allow that and therefore interest rates are realistically not going up.

NEGATIVE REAL INTEREST RATES

Even a Fed Funds Rate of 1.75 next year would likely still mean we would have negative real interest rates.

SOCIAL UNREST & POLITICAL INSTABILITY

"Policy makes never blame themselves for the problems they have. They always blame a minority, the wealthy or foreigners"

When you have too much debt political stability declines. In parts of the world where food and energy are bigger part of their disposable income you can expect social unrest as these inflation policies take on greater roles.

It is a fact that austerity policies fail at the polls as we have seen in Europe. In the US we are electing increasingly more populist politicians which means entitlement reforms have a slim chance of happening. Therefore "Kicking-the-Can-Down-the-Road" and reliance on the central bank to keep rates low.

We have former super powers on the decline and emerging super powers on the rise. We can only hope that this transition will be peaceful. A central banker told Axel prior to his starting his funds that "We can only hope the adjustment process will be slow and gradual"

JAPAN IS AHEAD OF US IN THIS EVOLUTION

"Liquidity has dried up in the JGB market which means that at some point it is easier to have some sort of crisis"

REGULATION

Regulations in general are about barriers to entry. Therefore it limits risk taking which inevitably leads to less economic growth. By simply keeping interest rates low it doesn't put sufficient pressures on the system for structural reforms. As low interest rate policies continue to fail the political bias will be to "double down" which means the problems get even worse. Eventually the structural changes required becomes too great to be politically possible without hiding behind a major crisis.

SWISS NATIONAL GOLD REFERENDUM

The Swiss are fiercely independent and don't like the dependencies which the Euro peg to the Swiss Franc are creating. They don't like the debt an unelected central bank is piling onto the nation. What is important is that the referendum is trying to force more discipline into monetary policy.

WHAT INVESTORS MUST REALIZE

Cash is no longer safe anymore! The purchasing power of cash is at risk. Once investors realize this the investment world is open! They then need to invest based on the risk spectrum.

  • EQUITIES - Prices are elevated because of the actions of central banks ,
  • BONDS - "I wouldn't touch with a ten foot pole in the current environment.
  • DIVERSIFICATION suggests adding Currencies and Precious Metals.
  • BE ALERT - Have your own opinion after building your own framework

 

 

 

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Saturday
November 22nd
2014

FINANCIAL REPRESSION for DUMMIES

 

Gordon T Long

 

SPECIAL GUEST: Financial Survival Network Radio

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FINANCIAL REPRESSION FOR DUMMIES

with Kerry Lutz & Gordon T Long

AUDO ONLY: 24 Minutes

From the Financial Survival Network:

Gordon T. Long has been sounding the alarm on Financial Repression for quite some time. Unfortunately most people have been unaware that their wealth is being stripped away before their very eyes. But Gordon and his associates have devised a number of strategies that can be exercised to avoid this fate. Before you can solve a problem, you’ve got to admit that it exits.

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Wednesday
November 19th
2014

AUDIO PODCAST

DOUG CASEY on FINANCIAL REPRESSION

Doug Casey

 

SPECIAL GUEST: Doug Casey is the founder and chairman of Casey Research. He has been a featured guest on hundreds of radio and TV shows, including David Letterman, Merv Griffin, Charlie Rose, Phil Donahue, Regis Philbin, Maury Povich, NBC News, and CNN; has been the topic of numerous features in periodicals such as Time, Forbes, People, and the Washington Post; and is a regular keynote speaker at FreedomFest, the world's largest gathering of free minds.

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A WORLD TOUR OF FINANCIAL REPRESSION

with

 

Best-selling author, world-renowned speculator, and libertarian philosopher. Doug is widely respected as one of the preeminent authorities on “rational speculation,” especially in the high-potential natural resource sector. Doug literally wrote the book on profiting from periods of economic turmoil: his book Crisis Investing spent multiple weeks as #1 on the New York Times bestseller list and became the best-selling financial book of 1980 with 438,640 copies sold; surpassing big-caliber names, like Free to Choose by Milton Friedman, The Real War by Richard Nixon, and Cosmos by Carl Sagan. Then Doug broke the record with his next book, Strategic Investing, by receiving the largest advance ever paid for a financial book at the time. Interestingly enough, Doug’s book The International Man was the most sold book in the history of Rhodesia. and his most recent releases Totally Incorrect (2012) and Right on the Money (2013) continue the tradition of challenging statism and advocating liberty and free markets.

Published 11-19-14

PODCAST - AUDIO ONLY - 31 Minutes

Doug Casey has garnered a well-earned reputation for his erudite (and often controversial) insights into politics, economics, and investment markets. He doesn't hold back as he speaks from his ranch in the back provinces of Argentina.

Doug sees the world in the "eye of a gigantic financial hurricane". It entered the hurricane in 2007-2008 and will likely see the next stage in 2015. Here are just some of Doug's views and statements from this fascinating and exclusive interview with Gordon T Long.

REALISTICALLY SEES WAR AHEAD

"The US is being provocative with its military bases in 125 countries around the world and is provoking the Russians in the Ukraine." The US is now a country in a continuous state of war. "The US military is out of control."

"AMERICA DOESN'T EXIST ANYMORE!"

"America has turned into a police state". It is the most dangerous entity in the world today and has become hated globally because of its militarism.

"THE REAL RISK TO INVESTORS IS 'POLITICAL'"

US Investors must urgently diversify their assets abroad while it is still possible. More restrictive regulatory policies lie ahead.

US STANDARD OF LIVING & RESPECT IN THE WORLD HAS FALLEN

Today the US is more taxed and regulated than ever before, which limits its abilities to solve its problems.

"MODERN CURRENCIES ARE FLOATING ABSTRACTIONS"

Developed economies' currencies "are turning into toilet paper".

"JAPAN IS A GIANT ACCIDENT WAITING TO HAPPEN!"

"If you are looking for a one way street, perhaps the best speculation in the world today would to be short Japanese government bonds denominated in Yen". The demographics in Japan are the worst in the world.

"THE EU WILL CEASE TO EXIST"

Its really a horrible conglomeration of countries which should be simply a free trade area with the government in Brussels making it impossible. It is totally dysfunctional and will breakup.

RECOMMENDATIONS

  • "Hold onto your hat" - Things are going to get real interesting starting in 2015,
  • Doug sees turmoil coming which we haven't seen since the start of the Industrial Revolution or the French Revolution,
  • Hold gold and silver. Some should be in coins in your possession.

 

 

 

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Monday
November 10th
2014

AUDIO PODCAST

MICHAEL PENTO on FINANCIAL REPRESSION

Michael Pento

 

SPECIAL GUEST: MICHAEL PENTO is the President of Pento Portfolio Strategies and serves as Senior Market Analyst for Baltimore-based research firm Agora Financial. Pento Portfolio Strategies provides strategic advice and research for institutional clients. Agora Financial publishes award-winning newsletters, critically acclaimed feature documentaries and international best-selling books.

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Mr. Pento is a well-established specialist in the Austrian School of economics and a regular guest on CNBC, Bloomberg, FOX Business News and other national media outlets. His market analysis can also be read in most major financial publications, including the Wall Street Journal. He also acts as a Financial Columnist for Forbes, Contributor to thestreet.com and is a blogger at the Huffington Post. Prior to starting Pento Portfolio Strategies and joining Agora Financial, Mr. Pento served as a senior economist and vice president of the managed products division of another financial firm. There, he also led an external sales division that marketed their managed products to outside broker-dealers and registered investment advisors. Additionally, Mr. Pento has worked for an investment advisory firm where he helped create ETFs and UITs that were sold throughout Wall Street. Earlier in his career Mr. Pento spent two years on the floor of the New York Stock Exchange. He has carried series 7, 63, 65, 55 and Life and Health Insurance Licenses. Mr. Pento graduated from Rowan University in 1991.

Published 11-17-14

PODCAST - 19 Minutes

Michael Pento speaks out strongly by saying: "We cannot allow the whims of a small group of unelected people to depreciate the value of currencies without any accountability whatsoever. Who gave Mr Bernanke and Ms Yellen the authority to do all these QEs? Who voted them into power? Why do we believe deflation is a bane on the American populous? Why do we want real incomes to fall and prices to go up? We cannot allow these people to to destroy the American middle class and American consumer!"

FINANCIAL REPRESSION

"Any attempt by government to make sure debt service payments remain serviceable."

That is the key. "Whether it is to force people into the bond market, whether it is to keep interest rates artificially low - whatever they need to do to make sure they don't have to use the tax base to pay their debt and deficits. They utilize artificial methods to make sure they can make debt service payments."

JAPAN IS MICHAEL PENTO'S FAVORITE EXAMPLE

"In Japan they have been able to take the entire JGB market and monopolize the whole entire thing! There is nothing that occurs there unless the government is a buyer. There are days on end where there is no trading because their 10 year note is .005%."

"Japan is an insolvent nation that has taken its interest rates down to levels where there is no private market for their debt - it is a ticking time bomb ..... The danger here is the Yen can unravel here and become intractable."

"If interest rates go up just 1% the nation is completely insolvent. The Yen could unravel very quickly and cause the economy of Japan to collapse, which would be massively disruptive to all economies and markets across the globe."

FREE MARKET SYSTEM HAS BEEN COMPLETELY VANQUISHED

"No one knows what the prices are of anything any longer! Capitalism has been annulled, cancelled and abrogated by government and central banks (which are one and same thing)".

WHERE WE ARE HEADED

  1. A complete breakdown in central bank credibility lies ahead,
  2. A complete collapse of the financial system will occur when interest raters normalize. The Fed won't initiate this normalization but rather the free market will,
  3. A resulting global economic collapse will wipe out tax bases and therefore debts and deficits will skyrocket
  4. Because of this threat, more QE, more financial repression and further market intrusions lie ahead.
 

 

 

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Friday
November 14th
2014

AUDIO PODCAST

TIM PRICE on FINANCIAL REPRESSION

Tim Price

 

SPECIAL GUEST: Tim Price is Director of Investment at PFP Wealth Management in the UK, an independent asset management and financial planning practice. He was formerly Chief Investment Officer – Global Strategies at Union Bancaire Privée in London, and previously Chief Investment Officer at private bank Ansbacher & Co.

OPEN ACCESS

Tim has 18 years’ experience of both institutional and private client wealth management. A graduate of Oxford University, his focus is absolute return investing using multiple asset classes, including so-called alternative investments. Working with his prior employers he has been shortlisted for five successive years in the Private Asset Managers Awards program and is a previous winner in the category of Defensive Investment Performance. He was also shortlisted in the inaugural Spear’s Wealth Management Awards 2007 in the category of Asset Manager of the Year. An outspoken and sometimes irreverent commentator on financial markets and the asset management industry, Tim is also a regular columnist for Money Week magazine and maintains a weblog, The Price of Everything (http://thepriceofeverything.typepad.com/) and edits Price Value International.

Published 11-14-14

PODCAST - 26 Minutes

FINANCIAL REPRESSION

"Financial Repression is government stealing from savers and the future!"

"The single biggest problem of our times economically, is that for the last 40 years there has been an unsustainable buildup of credit expansion throughout the developed world ... and we have reached the end of the road new. Every policy by governments and their agents (the central banks) is too a) Kick the Can Down the Road and B) to steal from savers to keep this bandwagon rolling!"

THREE ALTERNATIVE APPROACHES TO ATTEMPT A RESOLUTION:

  1. Generate Sufficient Economic Growth to Keep Servicing the Debt,
  2. Repudiation or Debt Default,
  3. An Explicit Policy of State Sanctioned Inflationism.

Approach #1 and #2 or no longer realistically viable, leaving governments with only option #3. The last options has historically always been the option governments of fiat based systems have resorted to throughout the ages because of a lack of "political will and discipline".

Tim believes Japan is presently the 'dress rehearsal' and the rest of the world will be the main event.

A "FOUR LEGGED" INVESTMENT APPROACH

The pragmatic response - Ignore indices and concentrate on value.

“Investors do not make mistakes, or bad mistakes, in buying good stocks at fair prices. They make their serious mistakes by buying poor stocks, particularly the ones that are pushed for various reasons. And sometimes – in fact very frequently – they make mistakes by buying good stocks in the upper reaches of bull markets.”

  -Benjamin Graham

  1. High Quality Debt,
  2. Deep Value Listed Equity,
  3. Uncorrelated Assets and Systematic Trend Following (CTA),
  4. Diversified Real Assets

Tim recalls the words we last heard in the dark days of 2008:

"When you’re a distressed seller of an illiquid asset in a market panic, it’s not even like being in a crowded theater that’s on fire. It’s like being in a crowded theater that’s on fire and the only way you can get out is by persuading somebody outside to swap places with you .”

This is precisely what occurs when the regulatory pressures and un-natural forces of FINANCIAL REPRESSION finally ends

 

 

 

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Monday
November 10th
2014

Dr. THORSTEN POLLEIT on FINANCIAL REPRESSION

Dr Thorsten Polleit

 

SPECIAL GUEST: Thorsten Polleit, PhD is chief economist of the precious-metals firm Degussa and co-founder of the investment boutique Polleit & Riechert Investment Management LLP. He is honorary professor at the Frankfurt School of Finance & Management and associated scholar of the Mises Institute.

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Thorsten Polleit, 47, is Chief Economist of Degussa Goldhandel GmbH (www.degussa-goldhandel.de). From 1998 to 2012, he worked as an economist for ANB AMRO and Barclays Capital in Amsterdam, London and Frankfurt. Thorsten holds a diploma in economics and was awarded a doctorate in economics from the University of Münster in 1996. In September 2014 he was appointed Honorary Professor for economics at the University of Bayreuth (uni-bayreuth.de). Thorsten Polleit is an Adjunct Scholar of the Ludwig von Mises Institute, Auburn, US Alabama (www.mises.org), President of the Ludwig von Mises Institut Deutschland (www.misesde.org) and a founding member of the research network on The Role of Money in the Economy (ROME). Together with Matthias Riechert he founded the investment firm Polleit & Riechert Investment Management LLP (www.polleit-riechert.com). Thorsten Polleit writes frequently for various newspapers magazines and journals. His publication list can be found here.

Published 11-10-14

21 Minutes

When you are as well grounded in the Austrian School of Economics as Prof Dr. Thorsten Polleit, then understanding inflation is only a matter of understanding the countries changing "money stock" and the "quantity of money". As Ludwig von Mises taught - inflation always comes to an end! At some point you cannot inflate any further.

"We live in a world where the quantity of money can be increased at any point in time, in any amount politically desired. It is only a matter of political willingness to increase the stock of money ... the real risk in an unbacked money system is therefore inflation"

Prof Polleit believes there is a "lot of trickery"still to be done to avoid the ultimate catastrophe which he sees coming because of the lack of politically will to address the present economic problems and the government's fear of deflation. As a result, "it can be anticipated that future government policies will take away a large amount of private wealth".

"COLLECTIVE CORRUPTION"

"Presently there is great support to keep alive a failing unbacked "paper money" system ... Many people have become dependent on the unbacked "paper money" system, for example people holding bonds. They have a great interest that the whole monetary architecture does not collapse. So, if the choice is to bring to a halt the printing press and accept the consequences; or to be in favor of the policies to create new money, the majority of the people would opt for the former. This is why you can (and will) impose all these drastic Financial Repression measures."

FINANCIAL REPRESSION

"Financial Repression are policies that try to erode outstanding wealth. For instance governments have bonds outstanding. Through Financial Repression they try to reduce the amount of real debt of these instruments. ... They do this by controlling the interest rate and ramping up inflation so the real return on investor assets declines and inflation 'eats away' investor wealth"

NEGATIVE REAL RATES

"Negative Real Interest Rates is an instrument of the government for eroding real wealth of savers to the benefit of the government and other highly indebted interest rate groups - like the banking industry because their outstanding liabilities are getting reduced in real terms. This is the redistribution of income and wealth on the grandest scale imaginable!"

"The losers are the innocent savers with expectations of inflation being lower than it actually is or will become."

"It must be understood that wealth is being transferred!".

 

 

 

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Monday
Nov 10th,
2014

FOLLOWING JAPAN'S FAILED ECONOMIC MODEL

 

Charles Hugh Smith

 

 

Regular Co-Host: CHARLES HUGH SMITH , Author & Publisher of OfTwoMinds.com

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with Charles Hugh Smith & Gordon T Long

25 Minutes

Charles Hugh Smith and Gordon T Long discuss the failed Japanese Economic Model and what it means for those nations following the Japanese path of QE and then QQE.

It’s not just about Japan as a nation failing— but that it’s critically important to understand that the model Japan followed in the postwar era is failing.  

Japan reached preeminence via an Asian-specific form of Capitalism with these four characteristics:

FOUR FAILED PILLARS – Lessons Learned

1.    Integration of government ministries and private-sector cartels,

2.    Heavy reliance on export sectors for growth and profits,

3.    Domestic savers provide the capital for export expansion,

4.    Defaults and write-offs of bad debt cause loss of face and are thus hidden from public view

 Charles Hugh Smith spells out why all four have failed.

This model will fail in every nation that relies on it.

Japan’s response to the failure of its growth model is not a solution but an additional problem:

-- Expanding fiscal deficits to enable more government spending,

-- Monetizing government debt (Bank of Japan creates money and uses it to buy government bonds)

Is Japan’s economy unique in the world? Yes and No.

YES: It is an island state with a homogeneous populace that is culturally attuned to producing high quality goods, saving money and sacrificing individual interests in favor of the greater good.  That is unique.

NO: But the mercantilism, state-capitalist, debt-dependent model is not unique—it has been copied by other developing nations as the gold standard for rapid development.”

Japan marched down the road that all the other developed economies are presently marching down.

 

 

 

 

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Saturday
November 8th
2014

Dr. CHRIS MARTENSON on FINANCIAL REPRESSION

 

Dr Chris Martenson

 

SPECIAL GUEST: Chris Martenson, PhD (Duke), MBA (Cornell) is an economic researcher and futurist specializing in energy and resource depletion, and co-founder of PeakProsperity.com

OPEN ACCESS

As one of the early econobloggers who forecasted the housing market collapse and stock market correction years in advance, Chris rose to prominence with the launch of his seminal video seminar: The Crash Course which has also been published in book form (Wiley, March 2011). It's a popular and extremely well-regarded distillation of the interconnected forces in the Economy, Energy and the Environment (the "Three Es" as Chris calls them) that are shaping the future, one that will be defined by increasing challenges to growth as we have known it. In addition to the analysis and commentary he writes for his site PeakProsperity.com, Chris' insights are in high demand by the media as well as academic, civic and private organizations around the world, including institutions such as the UN, the UK House of Commons and US State Legislatures.

Published 11-08-14

31 Minutes

Dr. Chris Martenson Talks FINANCIAL REPRESSION in clear and simple language that we can all follow. A professional educator, he makes the complex easy to grasp. Elements of Financial Repression require this skill to make clear the stealth game governments are taking against its citizens in the name of preserving the financial stability of the state.

FINANCIAL REPRESSION

"When governments get into too much debt there are only so many ways to get themselves out from under the debt." There is:

  1. Austerity,
  2. Default on the Debt or
  3. Financial Repression

In reality, the third is the only politically viable solution. Financial Repression " the cornerstone involves taking a little from everybody and giving it to a couple of favored parties". To do this involves three basic elements:

  1. Negative Real Interest Rates,
  2. Ring Fencing via Regulatory Controls,
  3. Elimination of warning signals such as gold appreciation.

JAPAN AS AS AN EXAMPLE

Let's consider Japan as an example. The Yen is down 33% over the last year as a stated policy direction of the government's Financial Repression implementation. As a direct consequence, imports are higher therefore making consumption items like energy more expensive for the average person in Japan.

Real wages and savings for the middle class in Japan are falling. However, if you are a corporation like Toyota it is better for business. Chris argues that Financial Repression is nothing more than a transfer from the people to companies such as Toyota . The government effectively believes it knows better through central control and planning where the public's money will be most effectively utilized.

Central planning never worked in Russia and after more than 20 years the proof can once again be confirmed in Japan. This is the stealth game being played against the public, not only in Japan but by countries practicing policies of Financial Repression around the world.

THE COMING CRISIS

True wealth NEVER gets destroyed, it only gets transferred!"

Chris points out that wealth is never destroyed. but rather it is the claims on wealth which are destroyed during a crisis. "A profound currency accident is coming" according to Chris where he "would not be surprised to see the Yen be completely obliterated just like the the Zimbabwe dollar." His strong recommendations are:

  1. Understand the problem,
  2. To importantly, take action,
  3. Be in Productive Assets,
  4. Make sure your money is managed by those who understand the new reality and today's true risks.

Wealth can no longer be stored in paper currency or "paper" claims in a Fiat Currency System.

Price and Value are separating and people forget that price is what you pay, but value is what you get. We soon will see an event where it will be perceived that great wealth is again destroyed. However, what investors MUST fully comprehend is that wealth is not destroyed but rather only transferred.

True wealth is the land, the property, plant & equipment, productive enterprises, raw resources and the people who fashion it all. That is the real wealth. Everything else is nothing more than paper claims on the true wealth. These claims can be made worthless overnight but wealth never is.

 

 

 

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Friday
November 7th
2014

JOHN BUTLER on FINANCIAL REPRESSION

 

John Butler

 

SPECIAL GUEST: JOHN BUTLER , is the publisher of the "Amphora Report", Author of "The Golden Revolution" and is Chief Investment Officer at Amphora; Atom Capital

OPEN ACCESS

John Butler has 18 years experience in the global financial industry, having worked for European and US investment banks in London, New York and Germany. Prior to launching the Amphora Commodities Alpha Fund he was Managing Director and Head of the Index Strategies Group at Deutsche Bank in London, where he was responsible for the development and marketing of proprietary, systematic quantitative strategies for global interest rate markets. Prior to joining DB in 2007, John was Managing Director and Head of European Interest Rate Strategy at Lehman Brothers in London, where he and his team were voted #1 in the Institutional Investor research survey. In addition to other research, he publishes the Amphora Report newsletter which appears on several major financial websites. A cum laude graduate of Occidental College in California, John holds a Masters Degree in International Finance and Economics from the Fletcher School of Law and Diplomacy, associated with Harvard and Tufts Universities.

Published 11-07-14

25 Minutes

John Butler saw first hand during his years with Deutsche Bank and Lehman Bros (prior to its collapse), mounting evidence of Wall Street's "natural self discipline and internal self regulation of risk taking activity being pushed aside and a huge industry bias towards excessive leverage and risk taking control". He knew it could not end well which led him to become independent of this growing institutional mindset and to search for alternative approaches.

"... valuations versus real assets is the key element of the end game"

He recognized that FINANCIAL REPRESSION was fundamentally about limiting investor choice and to further this institutional direction of increasing risk taking to finance government debt. He has therefore came to define Financial Repression from the standpoint of both a narrow and broad definition:

FINANCIAL REPRESSION

BROAD DEFINITION: "Any Policy that constrains the ability of the financial markets and investor particpants in these markets to take rational actions to invest, diversify and manage the risk of their investment as they would personally prefer to do."

NARROW DEFINITION: "A specific tool kit of policies implemented by government which indirectly confiscate the wealth of the private sector and move it to a combination of the public sector and/or "too large to fail" institutions."

FINANCIAL REPRESSION IS ABOUT LIMITING INVESTMENT CHOICE

"The whole point of financial repression is to make it difficult or impossible for an investor to protect themselves"

John feels Financial Repression "is now extremely broad based (globally) and in fact you have to look very closely to find countries not actively pursuing some mix of Financial Repression policies."

A NEGATIVE SUM GAME

Butler has argued in his Amphora Report that competitive currency debasement is "is not a zero sum game but rather a negative sum game because policy makers don't realize that by trying to devalue against each other, unseen they are undermining the very credibility of unbacked fiat currencies generally."

Increasing the BRICS are "becoming increasingly wary of where all this is going and as a consequence are diversifying not only their fiat currency reserves but are diversifying into gold, oil fields and real assets generally."

HOW INVESTORS PROTECT THEMSELVES

"The only free lunch in economics is DIVERSIFICATION. The problem is that in a world of Financial Repression, the way you diversify yourself is very different than a world where financial represion is not an issue."

"There is no way out but Currency Debasement"

John outlines in this video specifically what the "new diversification" must consist of.

He believes the Fed "will blink" as the US dollar continues to rise as a consequence "of the deflationary pressures which are spreading across the world." He sees evidence of a major trend reversal coming in 2015 and possibly before the end of 2014.

 

 

 

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