Sentences with phrase «financial repression which»

But the roots are global as well and at least one of the roots is financial repression which is the major central bank's policies over the last nine years of recovery to drop interest rates to zero to buy risk assets, to push investors into risk assets and generate a lot of liquidity and credit.

Not exact matches

Their sample included a lot of small OPEC countries, who necessarily had high growth and low interest rates when oil prices were high, as well as a lot of Asian countries that followed the Japanese development model and themselves practiced financial repression, which of course made them pretty useless as points of comparison.

The more appropriate measure of financial repression is not the deflator, whichever one we choose to use, but rather very roughly the gap between the nominal lending rate and the nominal GDP growth rate, the latter of which broadly represents the return on investment within the economy.

Financial repression helped foster tremendous growth in economic activity as privileged borrowers took advantage to borrow and invest in almost any project for which they could get approval.

This is why understanding financial repression is so important to understanding the way in which China will adjust.

China's debt problems, in other words, can not be resolved administratively, by fixing the shadow banking system, by imposing discipline on borrowers, or indeed by eliminating financial repression (much of which, by the way, has already been squeezed out of the system by lower nominal GDP growth).

China's huge portfolio of NPLs at the end of the 1990s (perhaps as much as 40 % of total loans) was resolved by a decade of severe financial repression, so that lending rates of around 7 % — in an economy in which GDP grew nominally by 18 - 20 % and the GDP deflator usually exceed 8 % — implied substantial debt forgiveness.

Years of central bank policies of easy money have caused short - term interest rates to remain below inflation — aptly called financial repression — which has penalized savers.

So when you go to financial repression rather than us pulling our money out of the system and hoarding it, they would force us to use an electronic currency which they can control.

Asia's sovereign bonds will likely be less endangered by rising interest rates and less vulnerable to Western policies of financial repression, which erode the purchasing power of their citizens» savings.

All these people really wanted was 10 % annual returns, which was achievable strictly with fixed income in the high - inflation 1970s but has become impossible in this modern era of financial repression.

Years of central bank policies of easy money have caused short - term interest rates to remain below inflation — aptly called financial repression — which has penalized savers.

And we all know that the phenomenon of «financial repression» practiced by the world's central banks has conspired to keep interest rates low for the foreseeable future, which makes counting on highly taxed interest income from fixed - income investments equally dodgy.

The paper goes into depth on the effects of financial repression on investments, which grow the longer the repression lasts, up to twenty years.

Also, financial repression has been called a «stealth tax» that «rewards debtors and punishes savers — especially retirees» because their investments will no longer generate the expected return, which is income for retirees.

If financial repression continues, you want to own the least bad thing out there, which is equities.

The Zero Interest Rate Policy (ZIRP) of the Fed and other central banks is a phenomenon known as «Financial Repression,» which can be particularly frustrating for near - retirees and savers in general, who get little or no real return on their savings.

For the folks at home, this is the James Montier piece to which Jim refers: «The 13th Labour of Hercules: Capital Preservation in the Age of Financial Repression» on the GMO research page here.