Posts Tagged ‘solvency’

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.


Notes From Underground: Sarkozy and Merkel Place Europe On Double Secret Probation

October 10, 2011

It is now official: EUROPE UNDER THE GUIDANCE OF THE TWO DEANS OF PSY-OPS HAVE A PLAN FOR RECAPITALIZING THE BANKS AND BOLSTERING THE EUROPEAN FINANCIAL SYSTEM. The world heaved a sigh of relief that the Sunday meeting in Berlin resulted in a PLAN. The intricacies of what the plan entails are a secret, but for today the markets reacted positively, grasping for any sense of hope. The world’s equity markets reacted as if EURO’s were being air dropped all over the continent. The BUNDS were sold as the reallocation trade sent money exiting the havens in search of risk and the possibility of higher returns … at least for a day.