US Regulators Mandate Next Stage Of Textbook Financial Repression
By Daniel R. Amerman, CFA
GoldSeek.com
Thursday, 29 October 2015
With comparatively little fanfare, Fidelity Investments has announced that 100% of their $115 billion Cash Reserves fund, the world’s largest money fund, will be invested in US government debt by December 1st of 2015. It is expected that many other money fund companies will also change their policies and invest only in US government and agency securities, because of a change in regulations that will occur in 2016.
Since 2010 the US government has been implementing a textbook example of Financial Repression, when it comes to using private savings to control and even effectively pay down the size of the national debt. Far from slowing down or ending this process, these new policies will expand by many millions the number of people who will effectively be forced to fund the purchase of government debt at artificially low interest rates.
Tightening The Controls On Savers While Lowering Their Returns
As explored in the tutorial “Is There A ‘Back Door’ Method For The Government To Pay Down The Federal Debt Using Private Savings?” (link here), Financial Repression is an economic process that has been used by many nations around the world to quite successfully reduce the effective size of their national debts relative to their economies, in a manner which the average saver/voter never has understood and likely never will.
The Rest…HERE
