09/18/2014 - Financial Repression Through Currency Devaluation and Inflation

In his latest commentary, John Rubino* explains how inflation & currency devaluation are forms of “default” of a country on its debt .. on the effects of currency devaluation: “Savers now accepting 0.5% interest on bank CDs will be shocked to find out that the government is explicitly trying to devalue the currency by 5% a year, giving those CDs a -4.5% annual return and making saving for retirement — or even preserving capital — impossible.” .. highlights the secondary & tertiary effects of currency devaluation or inflation to address a big debt problem – there is actually more debt taken on .. worries about the potential for what Austrian economics calls a “crack-up boom” – when a critical mass of people figure out the government is going to make the currency worth less each year for a really long time: “Individuals and businesses lose interest in holding the currency, instead spending it on real stuff as fast as it comes in, thus setting off an asset bubble/hyperinflation.”

LINK HERE to the article

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