Posts Tagged ‘negative deposit rate’

Notes From Underground: All My Words Come Back To Me

November 29, 2015

Sometimes world leaders and CEOs ramble and say things that reverberate for longer than intended. Two things in particular are echoing in the canyons of poorly thought-out ideas: President Barak Obama’s comparing the military potential of ISISĀ to A HIGH SCHOOL JV BASKETBALL TEAM. Then, there’s theĀ CEOs OF AMERICA’S HEALTH INSURANCE AND HOSPITAL INDUSTRY, ALONG WITH THE BIG PHARMACEUTICAL COMPANIES, APPEARING REGULARLY AT WHITE HOUSE CONCLAVES TO ACTIVELY SUPPORT THE AFFORDABLE CARE ACT, PROCLAIMING AS THEIR RATIONAL: IF YOU ARE NOT AT THE TABLE THEN YOU ARE ON THE MENU.

(more…)

Notes From Underground: Financial Repression, European Style

June 9, 2014

Readers of the Notes From Underground have long been aware of Carmen Reinhart’s work on financial repression. Professor Reinhart has done copious research on government’s ability to force “citizens” to pay for all types of policy mistakes by inflating the financial system to reduce the wealth of savers for you can’t repress those with no savings or wealth stored in financial assets. The Romans would clip the edge of coins so as to repress its citizens by stealth depreciation. The United States after World War II, froze interest rates so as to reduce rate expenditures on a vast amount of accumulated debt. The Bernanke Fed has repressed savers by forcing interest rates down to negative real yields in an effort to revive a stagnant economy and relieve the massive debt overhang that was preventing a resurrection of consumer demand.

(more…)