by Nick Giambruno, International Man:
Editor’s Note: Financial repression is a devious tactic, and at some point, every heavily indebted government uses it. It’s inevitable. And no entity on the planet is more indebted than the US government.
The Financial Times defines financial repression like this:
A term used to describe measures sometimes used by governments to boost their coffers and/or reduce debt. These measures include the deliberate attempt to hold down interest rates to below inflation, representing a tax on savers and a transfer of benefits from lenders to borrowers.
Financial repression is also used to describe measures to facilitate a domestic market for government debt and the imposition of capital controls. The combined effect of all these measures means funds are channeled to the government that would otherwise flow elsewhere.