Sentences with phrase «in financial repression»

When governments engage in financial repression, they tempt ppl to cut corners on safety 4 income $ $ Oct 31, 2012

it's all about investing in financial repression - regulations, capital controls, loss of purchasing power..

Not exact matches

I would argue that all of these should really count as investment, and certainly the latter two will drop dramatically as investment, especially in real estate, drops (and the former will probably drop as the financial repression tax is eliminated).

In this case the «cost» of financial repression to households was the gap between nominal GDP growth and nominal lending rates, plus an additional 1 - 1.5 % to account for the larger than normal gap between the lending rate and the deposit rate.

Financial repression has been the main explanation for the enormous misallocation of capital spending we have seen in China during the past decade.

This was why financial repression, although useful in the early stages of China's growth period because it turbocharged investment, ultimately became one of the county's biggest problems once investment no longer needed turbocharging.

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.

Because low - risk investments return roughly 20 % on average in a country with 20 % nominal GDP growth, financial repression means that the benefits of growth are unfairly distributed between savers (who get just the deposit rate, say 3 %), banks, who get the spread between the lending and the deposit rate (say 3.5 %) and the borrower, who gets everything else (13.5 % in this case, assuming he takes little risk — even more if he takes risk).

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

«Investors are still living in a world of financial repression,» Patrick Legland, the global head of research at Societe Generale, said in a research note on Tuesday morning.

It can be reduced in the form of implicit debt forgiveness through monetization or financial repression.

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.

In China's case these taxes have mostly been indirect and include low wage growth relative to productivity growth, an undervalued currency, environmental degradation, the rights of eminent domain, moral hazard and, most importantly, financial repression.

Although it's true that financial repression has traditionally been practiced using the stick of high mandatory reserve requirements, whereas the Fed has instead been employing carrots in the shape of ON - RRP and IOER interest incentives, the ultimate result — more credit for the government, and less for everyone else — is the same.

Leland describes the Chinese reform as a reversal of financial repression and this repression in the context of the Chinese economy is the oppression of consumers and households by state organizations through its economic systems.

The financial repression process begins at the monetary policy level as a response to some shock In the economy.

Danielle emphasizes how she understands financial repression «in her bones» because she worked in «The Financial Repression Factory», referring to the Federalfinancial repression «in her bones» because she worked in «The Financial Repression Factory», referring to the Federarepression «in her bones» because she worked in «The Financial Repression Factory», referring to the FederalFinancial Repression Factory», referring to the FederaRepression Factory», referring to the Federal Reserve.

FRA Co-Founder Gordon T. Long interviews Leland miller, the president of the china beige book international and discusses financial repression in the context of the Chinese economy.

Financial repression has continued much longer than we thought possible, and this has, in our opinion, encouraged investors to overpay for income in every security type.

Here's an interesting Bloomberg piece on what bond guru Bill Gross is calling «financial repression», but what you can just call «low interest rates» The big story is that the world is still crawling out of a near - depression, and there is not a central banker in the developed world who would dare dream of pushing interest rates to anything above a number you could count out on the fingers of one hand (and seriously, in most countries you could leave out the thumb and index finger as well).

James views financial repression in light of what Ben Bernake said in his November 12 op - ed in the Washington post:

In other words, financial repression is the inevitable result of a world with low growth and stubbornly high debt.»

Tags: BOC, Fed, financial repression, Janet Yellen, Loonie, pension funds, RBA, yield curve Posted in BCB, Currency, Debt Market, Fed, RBA 10 Comments»

While many Senators challenged the negative effects of the Fed's policy for savers — financial repression in the words of Carmen Reinhart — Yellen noted that people were not just savers but also consumers.

We already knew that the Chinese financial system was completely distorted from years of regulatory repression and crony capitalism, as a whole new report on finance in China by The Economist demonstrates (see the editorial here, and the report starting here).

You recently had a discussion with our co-founder, Gordon T. Long, and I'm just wondering if you can relate that in terms of how financial repression has caused the trade wars.

And so in terms of financial repression, perhaps the one key sector that we need to look at is student loan debt because so many millennials are carrying student loan debt, and you know a small student loan debt is like $ 25,000 - $ 30,000 if someone can escape with a bachelor's diploma and only have $ 30,000 in debt they're considered to have done quite well, but when you think about it that's a pretty large debt for somebody who doesn't even have a full - time job yet.

And I know your listeners you know in the realm of the Financial Repression Authority understand this.

So again, this is as you and I talked from a financial repression perspective, this is a very empowering concept because it's putting control back in the hands of individuals and really away from governments and big companies because they're not needed as the middleman.

Richard: Great insight as always, and last time we talked about the commercial real estate bubble and we thought today we'd do a special focus on the millennial generation and how financial repression through repressed interest rates and quantitative easing has resulted in asset bubbles that ultimately have affected the millennial generation in terms of their values, how they look at the economy and life and the way they're conducting themselves in the economy: what they're facing in terms of the housing market and the job situation.

Last time we talked about the commercial real estate bubble and we thought today we'd do a special focus on the millennial generation and how financial repression through repressed interest rates and quantitative easing has resulted in asset bubbles that ultimately have affected the millennial generation in terms of their values, how they look at the economy and life and the way they're conducting themselves in the economy: what they're facing in terms of the housing market and the job situation.

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.

GMO's James Montier has a new paper, The 13th Labour of Hercules: Capital Preservation in the Age of Financial Repression

China steals from its consumers (financial repression) to aid its producers, who in turn give money to the Party, with whom the producers are in league.

In real terms, financial repression means interest rates are unlikely to move much higher over the medium term.

Financial repression was discussed in the early»70s by Stanford economists.

Savers and investors face high risks and low rewards in a world of financial repression.

See his piece, «The 13th Labour of Hercules: Capital Preservation in the Age of Financial Repression» on the GMO research page here.

So, at the margin, an investor would probably be wise to give equities a little more benefit of the doubt, and hence a little more weight in their portfolio than they would do, if the Fed weren't pursuing policies of financial repression.

[5] Thus, financial repression is most successful in liquidating debts when accompanied by inflation and can be considered a form of taxation, [6] or alternatively a form of debasement.

Financial repression comprises «policies that result in savers earning returns below the rate of inflation» in order to allow banks to «provide cheap loans to companies and governments, reducing the burden of repayments».

[10][12] «One of the main goals of financial repression is to keep nominal interest rates lower than they would be in more competitive markets.

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.

Negative interest rate policy, or NIRP, is the most recently deployed weapon of central bankers in their long campaign of financial repression — a deliberate policy of depressing interest rates in order to transfer wealth from savers (private citizens) to debtors (largely governments).

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.

The phenomenon of «financial repression» has conspired to keep real (after inflation) interest rates close to zero, unless you're prepared to take on extra credit risk or lock in to longer terms.

In the article James shows why we have financial repression (a policy that results in consistent negative real interest rates) and what you can do about iIn the article James shows why we have financial repression (a policy that results in consistent negative real interest rates) and what you can do about iin consistent negative real interest rates) and what you can do about it.

On 29 November 2012 GMO published an article by James called The 13th Labour of Hercules: Capital Preservation in the Age of Financial Repression

The natives are increasingly restless and pontificators in Washington who fantasize about job creation via government fiat will do well to temper their appetites in expectation that today's financial repression will be a decade - long proposition against the backdrop of less than inspiring demographic trends.