What is Financial Repression, and why should you care?

IT MAY BE THE WAY OUT FOR THE FED

In a 2011 NBER working paper, Carmen Reinhart and Belen Sbrancia speculate on a possible return by governments to this form of debt reduction in order to deal with their high levels of debt following the 2008 economic crisis.^[3] Reinhart and Sbrancia characterise financial repression as consisting of the following key elements:

1. Explicit or indirect capping or control over interest rates, such as on government debt and deposit rates (e.g., Regulation Q).
2. Government ownership or control of domestic banks and financial institutions while placing barriers to entry before other institutions seeking to enter the market.
3. Creation or maintenance of a captive domestic market for government debt achieved by requiring domestic banks to hold government debt via reserve requirements, or by prohibiting or disincentivising alternative options that institutions might otherwise prefer.
4. Government restrictions on the transfer of assets abroad through the imposition of capital controls.

Jim Rickards explains how it will work, if you own metals you must learn how this works. Here is the KWN LINK