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
Video: Mish Shedlock Talks Financial Repression
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