Jean Marie Eveillard Talks Financial Repression

By: Gordon Long | Wed, Jun 10, 2015
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Jean Marie Eveillard

Special Guest: Jean Marie Eveillard is a legendary French international investor who currently serves as the senior investment adviser to First Eagle Funds. Eveillard, who served more than a quarter century as a portfolio manager, was co-honored in 2001 by Morningstar, Inc. as "Stock Manager of the Year" and was a finalist for their 2009 "fund manager of the decade award for non-U.S. stocks". In 2003, the group gave him a "Fund Manager Lifetime Achievement" award.

27 Minute Podcast Interview


Financial Repression

"One characteristic of Financial Repression is extremely low interest rates. That is what the Federal Reserve, ECB and Bank of Japan have done over the past few years in reaction to the financial crisis of 2008. They have in a sense manipulated interest rates by doing what they call Quantitative Easing, which is the purchasing by the central banks of a number of fixed income securities - in the process taking short term interest rates and long term yields down as much as possible. In doing so they are trying to encourage investors but it is of course detrimental to savers!!"

"In a way they are being pushed into equities ... the authorities have created what I think is a bubble in stocks, bonds, high end real estate and art"


Regulatory Ring Fencing

"By forcing the banks to inflate their capital, the banks are being forced into buying sovereign securities!"

This type of regulatory policy chicanery helps finance the growing government debt at the expense of savers, retirees and small business. Eventually sovereign economic growth is affected.

Taxes, Regulations and Small Business


Negative Unintended Consequences

There are many unintended consequences and moral hazards of such policies. They lead to mal-investment, lack of price discovery and the mispricing of risk. Jean Marie Eveillard cites "economists have warned about potential mal-investment and today we are right there with the problem .... there is no ambiguity when they say they will do whatever it takes!"

The Mortgage Market


"Save & Investment" versus "Lend & Spend"

"Today the emphasis of economists is to consume, versus save and invest!"

"Sustained cheap money increases supply much more than it does demand. We presently have over investment resulting in global over supply. This is not being matched by only moderate global demand based primarily on consumerism. This mismatch leads to a lack of pricing power, which eventually defeats policies of Quantitative Easing and ZIRP which were never intended by their academic architects to be sustained policies." ~ Gordon T Long

 


 

Gordon Long

Author: Gordon Long

Gordon T. Long
Publisher - LONGWave

Gordon T. Long

Gordon T. Long has been publically offering his financial and economic writing since 2010, following a career internationally in technology, senior management & investment finance. He brings a unique perspective to macroeconomic analysis because of his broad background, which is not typically found or available to the public.

Mr. Long was a senior group executive with IBM and Motorola for over 20 years. Earlier in his career he was involved in Sales, Marketing & Service of computing and network communications solutions across an extensive array of industries. He subsequently held senior positions, which included: VP & General Manager, Four Phase (Canada); Vice President Operations, Motorola (MISL - Canada); Vice President Engineering & Officer, Motorola (Codex - USA).

After a career with Fortune 500 corporations, he became a senior officer of Cambex, a highly successful high tech start-up and public company (Nasdaq: CBEX), where he spearheaded global expansion as Executive VP & General Manager.

In 1995, he founded the LCM Groupe in Paris, France to specialize in the rapidly emerging Internet Venture Capital and Private Equity industry. A focus in the technology research field of Chaos Theory and Mandelbrot Generators lead in the early 2000's to the development of advanced Technical Analysis and Market Analytics platforms. The LCM Groupe is a recognized source for the most advanced technical analysis techniques employed in market trading pattern recognition.

Mr. Long presently resides in Boston, Massachusetts, continuing the expansion of the LCM Groupe's International Private Equity opportunities in addition to their core financial market trading platforms expertise. GordonTLong.com is a wholly owned operating unit of the LCM Groupe.

Gordon T. Long is a graduate Engineer, University of Waterloo (Canada) in Thermodynamics-Fluid Mechanics (Aerodynamics). On graduation from an intensive 5 year specialized Co-operative Engineering program he pursued graduate business studies at the prestigious Ivy Business School, University of Western Ontario (Canada) on a Northern & Central Gas Corporation Scholarship. He was subsequently selected to attend advanced one year training with the IBM Corporation in New York prior to starting his career with IBM.

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