Playing Along

"A strange game. The only winning move is not to play."
--Joshua (WarGames)

The primary objective of financial repression is to influence investors to take more risk than they otherwise would. By forcing yields on savings accounts, CDs, and other short term savings instruments toward zero, policymakers hope that people will shun savings in favor stocks, bonds, and other risky assets.

It is difficult to argue that financial repression programs have been anything other than wildly successful thus far. Stock and bond prices hover near all time highs. Even real estate prices show renewed strength.

This is so because people have decided to play along. Many if not most sense that financial repression policies are unnatural and likely to have undesirable consequences. Yet they act precisely how policymakers hope they will act anyway--usually because they feel that they have no choice.

But people do have a choice. They can decide that they will not acquiesce to programs of force. That they will not be parties to actions that they think wrong. That they want to be able to look future generations in the eye and say "I refused to be a part of that."

Each of us decides whether we will play along or not.

position in SPX