It's mostly those guys at
PIMCO, Bill Gross and Scott Mather, talking about financial repression. Japan has been at this for years and it probably won't end any time soon. Now it's the U.S.'s turn: with QE1/2 and maybe 3 it's already there and will probably be with us for a long time to so get used to it. According to Mr. Mather's
recent letter governments use financial repression:
... to improve a country’s ability to finance government debt without resorting to painful fiscal adjustment. By artificially lowering the cost of debt financing below what would be demanded by free market forces, governments are able to reduce borrowing costs and slow down debt accumulation rates. One can think of financial repression as a form of “stealthy default”: a gentlemanly way for modern countries with fiat currencies to stiff their creditors while still ostensibly paying interest and principal in full.
He calls it a "stealthy default," but we can also look at it as a tax if you happen to have savings. I guess for most Americans that wouldn't be a factor, but those fat cats probably don't like the idea of low returns for years to come. Here's the chart from Mr. Mather's letter showing real interest rates adjusted for inflation.
