Global wealth manager UBS has released a report that says the government may make its growing debt more manageable by turning to additional financial repression measures that would artificially lower the yield on government bonds. The way that this works, is the government wouls be deliberately keep interest rates low and allow inflation to rise to devalue the government’s debt by paying the debt with inflated dollars.
This strategy lowers the interest rate on the debt, and makes it easier to pay the debt by making the interest rate on government debt lower than the rate of inflation, which allows the government to pay yesterday’s debt with today’s lower valued currency. This is yet another hidden tax, as savings and other assets denominated in dollars lose value to inflation faster than they gain value from returns.
“For a country as large and wealthy as the US, widespread financial repression seems feasible and could enable the government to continue financing a growing debt burden without materially increasing its risk of default.
Financial repression policies could be deployed temporarily to provide fiscal breathing room, allowing for budget consolidation and improvement, followed by a phase-out and a return to more conventional policy settings. In such a scenario, economic distortions should remain temporary and manageable.”
Yeah, right. When has the government, any government, instituted a temporary emergency measure that allowed them to spend more money? Once this begins, you will know that the fiscal ship is sinking. Physical assets that you control are the key to navigating this particular issue.
Hard times are a comin’
13 Comments
@HomeInSC · June 4, 2025 at 7:49 am
It is an old operating principle. Nothing new here, they’re just preannouncing a major new deployment.
I agree on the physical assets – if you can hold on to them😬
Divemedic · June 4, 2025 at 9:29 am
Investing in gold and silver is great, if its in your physical possession.
Making sure your house is paid off is good, but remember that government officials can take it.
Stocks, bonds, and savings accounts are bad ideas.
Don Curton · June 4, 2025 at 8:52 am
So much for my working the past 40 years and saving up for retirement in the next year or two. I understand taking one for the team and all that, we gotta get the house in order, but honestly I’ve yet to see the govt ever make any meaningful spending cut. I’d say 99% of Congress plus all attached aides and bureaucrats need to be behind bars or swinging from the gallows. That would be a good warning to the remaining 1%.
@HomeInSC · June 4, 2025 at 1:46 pm
The big beautiful bill should have been at $1T less than last year and then recisions should have been queued up for another $1T. Not looking good.
I think the political class is afraid of the economic dislocation that would be caused by removing so much funding from the economy. But considering that the people being funded, all those NGOs and phony kickback projects are doing absolutely nothing that benefits this nation, I vote for the cold turkey approach. Excise the rot.
Divemedic · June 4, 2025 at 2:24 pm
Too much graft and corruption. They are all, both parties, on the take.
lynn · June 4, 2025 at 3:32 pm
Ah, that is the Uniparty.
Danny · June 4, 2025 at 3:56 pm
There’s been a lot of discussion around the inter webs about “civil war” and that we may be heading that way. The unsteady economy is where the battle is already in full swing.
Divemedic · June 5, 2025 at 6:50 am
I think that CW2 is already underway. If I were to place a date for the beginning of hostilities, I would say September 17, 2018. The war has been continuing at various levels of intensity since.
free rainbow stew · June 4, 2025 at 9:02 pm
How will the fourth world turd fund the proxy war in Ukraine and free EBT cards for the replacements?
You can’t coast on the fumes of 80 years ago forever.
Chuck · June 4, 2025 at 9:29 pm
Reads like exactly what they have been doing since at least the 90’s if not earlier.
EN2 SS · June 5, 2025 at 6:43 am
I don’t really like being disagreeable this early in the morning, but the Hard Times started quite some time ago, it’s just getting totally out of hand, now.
Divemedic · June 5, 2025 at 6:53 am
Slowly at first, then all at once.
Unclezip · June 5, 2025 at 10:15 pm
I’ve had them come to the door, and when asked about the signs, tell me they didn’t think it applied to them. That’s when I open the door a little wider and let the 120 pound Berner slip by. Berners are friendly as hell, but they’re huge, and tend to just wrap themselves around strangers. Problem solved.
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