FIDUCIARY FAILURE

The Entitlement Escape through Financial Repression

FULL REPORT
THESIS 2015 - FUDICIARY FALIURE

1/17/2015

1 January 2015 Edition

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FIDUCIARY FAILURE
The Entitlement Escape through Financial Repression

THESIS 2015 ............................................................................................................................................................................... 4

WHERE FIDUCIARY FAILURE FITS .......................................................................................................................................................................4
ABSTRACTION ....................................................................................................................................................................................................4
SPRING BOARDING FROM LAST YEARS GLOBALIZATION TRAP ..............................................................................................................5
PRIOR ROADMAPS - UPDATED ........................................................................................................................................................................7

1- FIDUCIARY FAILURE.............................................................................................................................................................. 8
WHERE FIDUCIARY FAILURE STARTS & WHERE IT ENDS .................................................................................................................................9
THE AUSTERITY FAILURE POST 2008 EU ...................................................................................................................................................... 14
FAILED GLOBAL GOVERANCE ............................................................................................................................................................................. 17
THE CENTRAL PROBLEM FAILURE ..................................................................................................................................................................... 24

2-A FIAT KONDRATIEFF CYCLE .............................................................................................................................................. 26

A GOLD ANCHORED CYCLE ................................................................................................................................................................................. 26
A FIAT FLOATING CYCLE .................................................................................................................................................................................... 27
SOMETHING DIFFERENT IS OCCURRING .......................................................................................................................................................... 32

3-SITUATIONAL ASSESSMENT SURVEY................................................................................................................................ 36

THE PROBLEM FINANCIAL REPRESSION IS ADDRESSING ............................................................................................................................. 36
THE CAUSE ...................................................................................................................................................................................................... 36
THE TRIGGERS ................................................................................................................................................................................................ 36
THE NEED ......................................................................................................................................................................................................... 36
THE RESULTS .................................................................................................................................................................................................. 36
WHAT THEY WILL DO ............................................................................................................................................................................................ 36
POLICY OF FINANCIAL REPRESSION ........................................................................................................................................................... 37
FALSE PERCEPTIONS ........................................................................................................................................................................................... 37
FINANCIAL REPRESSION As defined it at THE FINANCIAL REPRESSION AUTHORITY .............................................................................. 38
DEFINTION ........................................................................................................................................................................................................ 38
GOAL ................................................................................................................................................................................................................. 38
ALTERNATIVES ................................................................................................................................................................................................ 38
LYNCH PINS ..................................................................................................................................................................................................... 38
WINNERS & LOSERS ....................................................................................................................................................................................... 39
METHODS ......................................................................................................................................................................................................... 39
THE UNMISTAKABLE CONCLUSION .................................................................................................................................................................... 40

SURVEY RESULTS - THE ANALYTICAL ANALYSIS ....................................................................................................................... 45

FINANCIAL REPRESSION What People Perceive is Going On ......................................................................................................................... 45
ANDREW SHENG - Former Chairman Hong Kong Securities and Futures Commission ............................................................................... 45
SIMON BLACK - International Investment Intelligence Service ........................................................................................................................ 46
NICK GIAMBRUNO - Senior Editor, InternationalMan.com (Casey Research) ............................................................................................... 46
DANIEL AMERMAN Consultant & Former Banker ........................................................................................................................................ 48
AXEL MERK Founder & CIO Merk Investments ............................................................................................................................................ 49
DOUG CASEY Author & Founder Casey Research ...................................................................................................................................... 50
MICHAEL PENTO Pento Portfolio Strategies ................................................................................................................................................ 52
TIM PRICE - Director of Investment at PFP Wealth Management (UK) ........................................................................................................... 53
THORSTEN POILLEIT Poilleit & Riechert Investment Management ............................................................................................................ 54
CHRIS MARTENSON Peak Prosperity .......................................................................................................................................................... 55
JOHN BUTLER CIO, Amphora Commodities Alpha Fund ............................................................................................................................. 57
NICK BARISHEFF Founder & CEO Bullion Management Group .................................................................................................................. 58
GRANT WILLIAMS - Portfolio and Strategy Advisor for Vulpes Investment Management (Singapore) .......................................................... 59
DOUG FRENCH - Author, Past President of the Ludwig von Mises Institute................................................................................................... 61
MISH SHEDLOCK Sitka Pacific Capital Management................................................................................................................................... 61
RONALD-PETER STOEFERLE Incrementum Liechtenstein ........................................................................................................................ 63
DAVID STOCKMAN Former CBO Director & Congressman ......................................................................................................................... 64
ROBERT WENZEL Economic Policy Journal ................................................................................................................................................ 64
DOMINC FRISBY British Comedian & Author ............................................................................................................................................... 65
EGON von GREYERZ - Founder & Managing Partner, Matterhorn Asset Management AG and GOLDSwitzerland ..................................... 66
MARTIN ARMSTRONG Global Currency Consultant .................................................................................................................................... 68
POST SURVEY NOTES .......................................................................................................................................................................................... 70

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4-MONETARY TECTONICS ...................................................................................................................................................... 73

MONETARY MALPRACTICE .................................................................................................................................................................................. 73
TECTONIC FORCES ............................................................................................................................................................................................... 75
INFLATION, DEFLATION OR BOTH? .............................................................................................................................................................. 75
DEFLATION ............................................................................................................................................................................................................. 80
INFLATION ............................................................................................................................................................................................................... 86
REAL DEFLATION DR UNDERWAY IN EARLY 2015 .......................................................................................................................................... 88
AN ALTERNATIVE WAY OF THINKING ABOUT THIS.................................................................................................................................... 90

5-BROKEN SOCIAL CONTRACT .............................................................................................................................................. 92

CAPITALISM ............................................................................................................................................................................................................ 92
CREDITISM ....................................................................................................................................................................................................... 93
GLOBAL FINANCIALISM .................................................................................................................................................................................. 93
CAPITAL RISK INVESTMENT STOPS .......................................................................................................................................................... 94
RICARDOS FREE TRADE & THEORY OF COMPARATIVE ADVANTAGE .................................................................................................. 95
STATISM .................................................................................................................................................................................................................. 98
INEQUALITY ............................................................................................................................................................................................................ 99
SUB-PRIME ECONOMIES .................................................................................................................................................................................... 118
WHAT IS A SUB-PRIME ECONOMY.............................................................................................................................................................. 119
ABSTRACTION REPRESENTATIVE RESEARCH WE FOLLOWED ......................................................................................................... 119
LACK OF A LIVING WAGE ............................................................................................................................................................................. 121
RISING COSTS ............................................................................................................................................................................................... 121
REDUCED INDEPENDENCE, INCREASED DEPENDENCY VERSUS IMPROVING STANDARD OF LIVING ....................................... 123

6-ENTITLEMENT ESCAPE ...................................................................................................................................................... 127

THE UNFUNDED PENSIONS & ENTITLEMENT BOMB ..................................................................................................................................... 127
THE DEVELOPED WORLDS SOVEREIGN ENTITLEMENT CRISIS .................................................................................................................. 129
THE PRIVATE / PUBLIC PENSION CRISIS ......................................................................................................................................................... 132
THE BABY BOOMER BUBBLE .................................................................................................................................................................... 145
DEMOGRAPHICS OF BABY BOOM & SHRINKING BIRTH RATES ............................................................................................................ 146
Global Demographics and Debt ................................................................................................................................................................... 147
Jobs Private vs. Government .................................................................................................................................................................... 154
JAPANESE ESCAPE MODEL ............................................................................................................................................................................ 156
ARGENTNA, HUNGARY, POLAND, PORTUGAL, .................................................................................................................................... 156
JAPANS GFIP ................................................................................................................................................................................................. 160
PENSION NATIONALIZATION ACT ............................................................................................................................................................... 162
MyRA ............................................................................................................................................................................................................ 162
ESCAPING ENTITLEMENTS ................................................................................................................................................................................ 165

7- THE FINAL SOLUTION .................................................................................................................................................... 166

THE ONLY POLITICAL OPTION ........................................................................................................................................................................... 166
FALSE INVESTOR PERCEPTIONS ..................................................................................................................................................................... 168
A MANAGED MINSKY MELTUP......................................................................................................................................................................... 170
ROADMAP TO A MINSKY MELTUP .................................................................................................................................................................. 172

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