⛓️💸 FINANCIAL REPRESSION & WORLD WAR: HERE WE GO AGAIN? 💸⛓️
If we analyze history, the best debt/GDP ratio occurred between 1790 and 1920, at 30%; this coincides with the first half of an empire's life (based on an average of 250 years). Once the empire matured and became hegemonic, after experiencing a Debt/GDP ratio of 100% in 1945, things improved again from WWII until 1970. After that, the Pax Americana has experienced problems up to the present day, where it celebrates its 250th anniversary, and perhaps, this is the beginning of its decline. [See all data: History of US National Debt - Economics Help) & https://www.cbo.gov/publication/59710#section2 ]
The current War in the Middle East [https://jjplindex.blogspot.com/2026/04/medio-oriente-2026-como-entender-la-guerra.html ] establishes a kind of analogy with WW II or Oil Crisis. In that sense, the Federal Reserve wants to emulate the same US policies from 1945 to 1970, characterized by financial repression:
- Artificially low nominal interest rates to reduce the cost of debt
- Captive publics (forcing financial sectors to buy government debt)
- Capital controls to prevent savers from earning higher returns
- Banking restrictions with high reserve requirements and strong bank-government ties
In the past, there were consequences that could occur again:
- Devaluation of currencies other than the dollar
- Strong bear markets periods
- Elimination of inflation targets for government flexibility (loss of purchasing power) = Negative real interest rates
If it worked in the past, it was because the world was devastated by war and the US was the safe zone to flee to, and the USD was imposed as a weapon of war, but that may not be the case today. Meanwhile, the US government is seeking to increase investments in artificial intelligence to reduce future inflation. The troubling question is not only whether the outcome will fall short of expectations, but also the possibility that Greater Israel means the real failure for the United States.
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J. Joel Padilla
▶️ Blog: https://jjplindex.blogspot.com/
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Copyright: Joel Padilla 2026
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