Financial Repression: A Sheep Shearing Instruction Manual

"Financial Repression" is currently a hot buzzword in the global economic community, and its effects are even worse than it sounds. It is much less well known among the general public, and that is unfortunate because governments around the world deliberately and methodically stripping wealth (and therefore security and retirement lifestyle) from hundreds of millions of people is the quite explicit objective of Financial Repression.

As published in a recent working paper on the IMF website, Financial Repression is what the US and the rest of the advanced economies used to pay down enormous government debts the last time around, with a reduction in the government debt to GDP ratio of roughly 70% between 1945 and 1980.  Financial Repression offers a third way out - as it allows governments to pay down huge debt burdens without either 1) default or 2) hyperinflation.  If you are a senior government official of a nation that has a huge "sovereign debt" problem – like the United States and almost all of Europe, and you want to stay in power - this proven method is a topic of keen interest.  

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The 2nd Edge Of Modern Financial Repression:  Manipulating Inflation Indexes To Steal From Retirees & Public Workers

For Financial Repression to have a chance in the current environment, the governments of the world must employ not just the strategies of the past, but even more powerful strategies to deal with a fast oncoming future crisis that is far larger than the post World War II crisis.  From the perspective of a government that is in financial crisis mode, with no end in sight, there is a powerful mathematical advantage to deploying a double-edged strategy which devastates the financial security of millions of retirement investors by slashing both the value of their savings (the first edge) and the value of their pensions and/or Social Security payments (the second edge).  The effects of the implementation of this strategy can already be seen all around us.

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Hiding A $500 Billion Tax On Savings: How The Government Deceives Millions

There is a hidden and deeply unfair "tax" that is costing US savers in excess of $500 billion per year.  Through forcing interest rates far below the rate of inflation, the government has effectively created a tax on savings that not only takes all real interest income, but quite deliberately confiscates wealth from tens of millions of savers every year - for the direct benefit of the government.

As will be demonstrated with step by step, simple illustrations, the government is imposing the economic equivalent of a 90% income tax on savers.  The amount taken annually from savers is equal to more than half of all individual income taxes, and is nearly three times as large as total corporate income taxes.

The tax is not uniformly imposed, but instead targets older middle class savers in particular.  The effects include invalidating decades of financial planning, and potentially impoverishing millions of current and future retirees.

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