"Financial repression" is one of those heavily loaded political terms that annoys me, because of the implication that the investment class are
owed a positive risk-free rate of return even if that's at the cost of the rest of society.
However, when I started reading this article I thought it might be a rant about ZIRP, but it's actually much more sensible. It's extremely level-headed, refers to pragmatic evidence, and isn't interested in name calling.
On the other hand, he still doesn't articulate what he means by "financial repression" very clearly.
>> The cornerstones of the last period of financial repression after World War II were capital controls and the forcing of domestic savings institutions to buy domestic government bonds. Do you expect both of these measures to be introduced again?
> Yes. Domestic savings institutions like pension funds can easily be forced to buy domestic government bonds at low interest rates.
This is kind of already happening .. voluntarily? Treasury rates hover around zero.
I think the time may have come to re-evaluate capital controls while we're re-evaluating globalisation and its positive and negative effects. Is transferring hundreds of billions of dollars to opaque structures on tiny islands really good for the general public?
> If we’re taking the next 10 years, I see inflation between 4 and 8%, somewhere around that
That's .. worse than what we're used to, but not a disaster? What really matters is the link between price and wage inflation. Remember that most members of the general public in the west aren't worried about inflation eroding their cash assets because they have none or are negative (mortgaged). But we are worried about our salaries being eroded.
UK bond yields: the coalition government spent the lives of disabled people propping up "austerity" nominally to protect the credit rating, which it promptly threw out the window to in the course of Brexit. It seems likely that the UK situation will get worse.
Another thing to think about: state control directing credit to businesses to increase employment was a big part of how China has achieved spectacular growth rates over the decades since consolidating power at Tianamen.