The more I think about repatriation theory the less water it holds.
All money comes into existence via the central banks and financial institutions. In order to guaranty that this money has value it is secured through taxation via the government. Competition factors are added to the equation through means of interest. When a loan is issued only the PRINCIPAL is created, never the interest. There is not enough money in the system to repay interest and so additional loans must be acquired in order to service old debt. This act inflates the money supply.
Repatriation is the act of repaying a loan to a bank or central bank and thus reduces the amount of money in circulation. This causes the system to contract and if enough money is “repaid” the entire system seizes up. This act alone will destroy the strength of any currency. This lack of money is the reason for the global credit crisis. It is not just a confidence issue but is also a fundamental lack of money in circulation.
NobbyLand stated that the average Japanese person is a saver. Saving is the same as repaying a loan. It is the act of taking money out of circulation. Bankers get around this through fractional reserve banking. Through fractional reserve practices they can lend many more times the money they actually have and hence create more debt and keep the system inflated. This requires a liberal population in order to succeed. When the populous is not liberal the financial institutions can print as much money as they like however it will have no effect. To encourage lending they must drop interest rates and look to more liberal countries. These countries are the debtor nations.
