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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: ggersh who wrote (109926)	7/16/2012 10:46:17 PM
From: John Vosilla	Read Replies (1) of 110194

Negative Real Interest Rates, 1945-1980 and Post-2008: One of the main goals of financial repression is to keep nominal interest rates lower than would otherwise prevail. This effect, other things being equal, reduces governments’ interest expenses for a given stock of debt and contributes to deficit reduction. However, when financial repression produces negative real interest rates and reduces or liquidates existing debts, it is a transfer from creditors (savers) to borrowers and, in some cases, governments. Many differences in comparison between how the great depression played out and today are such as gold prices not fixed, federal reserve is way more hands on, our record trade deficit and hollowed out manufacturing base today, technology and globalization change the playing field at a rapid clip, plus record wealth disparity hasn't reversed this time only gotten even worse due to several factors. All resulting in imbalances with too high inflation for some basic goods, continued cost cutting and deflation in others while unemployment kept low enough that J6P doesn't riot in the streets quite yet

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