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"The ECB Has Lost Control" - Spiegel Asks If "Helicopter Money" Comes Next?
Just 2 short months ago we warned of the rising voice among the cognoscenti tilting their windmills towards the concept of "helicopter money," as Deutsche bank noted, "perhaps there's an increasing weariness that more QE globally whilst inevitable, is a blunt growth tool and that stopping it will be extremely difficult (let alone reversing it) without a positive growth shock." Committing what Commerzbank calls "the ultimate sin" is now reaching the mainstream as Germany's Der Spiegel notes it is becoming increasingly clear that Draghi and his fellow central bank leaders have exhausted all traditional means for combatting deflation; and many economists are demanding that the European Central Bank hand out money to consumers to stimulate the economy.
As Deutsche Bank's Jim Reid previously noted,
I had a few meetings yesterday and one of the biggest surprises I had was that for the first time in a long time people were talking about helicopter money and debt cancellation being the end game. This was a major theme of our 2013 long-term study but one that we've struggled to get much traction with over the last year. Perhaps there's an increasing weariness that more QE globally whilst inevitable, is a blunt growth tool and that stopping it will be extremely difficult (let alone reversing it) without a positive growth shock.
Maybe Japan's move this week in delaying the further sales tax increase and the economy's adverse reaction to the first increase reminds the market how difficult it might be to actually pay the bills with real money. As we said earlier this week it could be that the last few days marks the first steps towards monetization. Anyway, this is not something for today or tomorrow but the fact that different clients brought it up independently of each other makes me think that's its starting to get into people's thoughts.
* * *
It seems perhaps tomorrow is... today... As Der Spiegel explains...
Fears that the euro zone is heading for deflation refuse to abate. Now, many economists are demanding that the European Central Bank hand out money to consumers to stimulate the economy. But would it work?
It sounds at first like a crazy thought experiment: One morning, every resident of the euro zone comes home to find a check in their mailbox worth over €500 euros ($597) and possibly as much as €3,000. A gift, just like that, sent by the European Central Bank (ECB) in Frankfurt.
The scenario is less absurd than it may sound. Indeed, many serious academics and financial experts are demanding exactly that. They want ECB chief Mario Draghi to fire up the printing presses and hand out money directly to the people.
The logic behind the idea is that recipients of the money will head to the shops, helping to turn around a paralyzed economy in the common currency area. In response, companies would have to increase production and hire more workers, leading to both economic growth and a needed increase in prices because of the surge in demand.
ECB Has Lost Control
Currently, the inflation rate is barely above zero and fears of a horror deflation scenario of the kind seen during the Great Depression in the United States are haunting the euro zone. The ECB, whose main task is euro stability, has lost control.
In this desperate situation, an increasing number of economists and finance professionals are promoting the concept of "helicopter money," tantamount to dispersing cash across the country by way of helicopter. The idea, which even Nobel Prize-winning economist Milton Friedman once found attractive, has triggered ferocious debates between central bank officials in Europe and academics. For backers, there's more to this than just a new instrument. They are questioning cast-iron doctrines of monetary policy.
One thing, after all, is becoming increasingly clear: Draghi and his fellow central bank leaders have exhausted all traditional means for combatting deflation.
The failure of these efforts can be easily explained. Thus far, central banks have primarily provided funding to financial institutions. The ECB provided banks with loans at low interest rates or purchased risky securities from them in the hope that they would in turn issue more loans to companies and consumers. The problem is that many households and firms are so far in debt already that they are eschewing any new credit, meaning the money isn't ultimately making its way to the real economy as hoped.
In response to this development, Sylvain Broyer, the chief European economist for French investment bank Natixis, says, "It would make much more sense to take the money the ECB wants to deploy in the fight against deflation and distribute it directly to the people." Draghi has calculated expenditures of a trillion euros for his emergency program, funds that would be sufficient to provide each euro zone citizen with a gift of around €3,000.
'It Has To Be Massive'
Daniel Stelter, founder of the Berlin-based think tank Beyond the Obvious and a former corporate consultant at Boston Consulting, has even called for giving €5,000 to €10,000 to each citizen. "It has to be massive if it is going to have any effect," he says. Stelter freely admits that such figures are estimates. After all, not a single central bank has ever tried such a daring experiment.
Many academics have based their calculations on experiences in the United States, where the government has in the past provided cash gifts to taxpayers in the form of rebates in order to shore up the economy.
Oxford economist John Muellbauer, for one, looks back to 2001. After the Dot.com crash, the US gave all taxpayers a $300 rebate. On the basis of the experience at the time, Muellbauer calculates that €500 per capita would be sufficient to spur the euro zone. "It (the helicopter money) would even be much cheaper for the ECB than the current programs," the academic says.
And yet European central bankers and conservative economists still shudder when asked about the concept. "It would be the ultimate sin," warns Jörg Krämer, the chief economist at Commerzbank, Germany's second largest private bank. "If the central bank gives away money one time, there's no way it will remain an isolated case. Politicians will demand even more the next time around."
Muellbauer counters such fears by noting that central banks have a clear target: inflation of close to 2 percent. Once that target is achieved, the money handouts would cease. But the problem is that monetary policy often cannot be adjusted to that degree of precision. Many experts say that inflation is like a bottle of ketchup: when you whack on the bottom, nothing happens at first -- but then it all comes out in a gush.
The fundamental factor which determines the value of money is the trust of those who spend it -- the belief that a €10 or €20 bill will be enough to buy lunch for the foreseeable future and that a medium-sized car won't cost €100,000 five years from now. Should this trust evaporate, the entire monetary system begins to crumble.
Vast Uncertainties
It is an experience Germany became familiar with in the 1920s. The trigger for hyperinflation at the time was, of course, the fact that the German Reich paid for its wartime expenses by printing money. But the situation got out of control when the state's creditors along with its citizens lost faith in the mark. Investors refused to make more money available to the state and doctors began demanding barter in exchange for services rendered. Prices exploded, to the point that a loaf of bread ultimately cost 140 billion marks.
"Once people have experienced money raining down from the heavens, it will create vast uncertainties about future inflation," warns Commerzbank economist Krämer. "How often might it happen and how quickly will prices climb? What kind of shape must the euro be in if the ECB has resorted to giving out money?"
And even if people head to the shops with the money they have been given, it is still far from certain that companies would ramp up production. "It is possible that people would merely be competing for the same supply of goods. Prices would climb, but there would be no lasting stimulus for the economy," warns economist Thomas Mayer, formerly the chief economist for Deutsche Bank. The phenomenon is known among economists as stagflation.
Willem Buiter, the well-respected chief economist of the US financial giant Citigroup, has thus modified the idea of helicopter money. His version calls for policymakers and central bankers to act in concert. The state would improve economic competitiveness by way of reforms in addition to investing money in infrastructure projects or handing it out to taxpayers in order to trigger consumption. The central bank would finance the move via the purchase of sovereign bonds.
Buiter is unconcerned about EU regulations preventing the ECB from the kind of direct state financing such a plan would entail. He considers Article 123 of the Lisbon Treaty, which addresses the issue, to be a "disaster" anyway. He also doesn't believe the plan would endanger the ECB's independence. "Independence does not mean that you don't answer the phone when the minister of finance is calling," he says. "Independence means the right to say no." Cooperation and coordination of monetary and fiscal policy is thus "perfectly consistent."
Japanese Prime Minister Shinzo Abe apparently saw things similarly when he entered office at the end of 2012. His country had been suffering under deflation and economic stagnation for decades. In response, Abe announced structural reforms along with a gigantic investment program -- and pushed the central bank to finance it. Since then, the Bank of Japan has spent trillions, but the country nonetheless finds itself stuck in recession once again today.
The odd thing is that the Japanese example provides evidence to both supporters and detractors of the helicopter money plan. Does it reveal the absurdity of central bankers seeking to combat structural problems with money? Or is it merely proof that mass liquidity only works if politicians lay the necessary groundwork?
Nobody knows for sure because the Abe administration failed to pass a majority of the promised reforms. Monetary policy alone, however, "is not getting you out of the secular stagnation," as even helicopter fan Buiter admits. It is a sentence that could have come from his most adamant detractors.
* * *
So is the "Ultimate Sin" about to be unleashed...? As we concluded previously, this was always in the playbook - Indeed it is, as we warned last September in "Bernanke's Helicopter Is Warming Up" and yet everyone will be shocked, shocked, when the playbook that was clearly revealed by Ben Bernanke himself in 2002 is finally implemented:
... A broad-based tax cut, for example, accommodated by a program of open-market purchases to alleviate any tendency for interest rates to increase, would almost certainly be an effective stimulant to consumption and hence to prices. Even if households decided not to increase consumption but instead re-balanced their portfolios by using their extra cash to acquire real and financial assets, the resulting increase in asset values would lower the cost of capital and improve the balance sheet positions of potential borrowers. A money-financed tax cut is essentially equivalent to Milton Friedman's famous "helicopter drop" of money
- Ben Bernanke, Deflation: Making Sure "It" Doesn't Happen Here, November 21, 2002

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lol
Zero Hedge is consistently crying collapse! collapse! and that collapse, like Godot, never seems to come. The thing is, the only thing that's prevented that collapse is massive government internvention into markets. Okay, so they saved "the market" temporarily, but they had to destroy real capital in the real productive economy in order to do so. And that's where the real collapse is
https://www.youtube.com/watch?v=VI6tBwVjyOY
FUCK YOUR VEGAN RECIPES.
FFS. Brontosaurus burgers tonight.
Eat Steak ~ Reverend Horton Heat. Good stuff.
https://www.youtube.com/watch?v=wQynViAF6Ds
Helicopters ?
I think it may be time to bring in the Jumbo Jets ? I would use the 747's first.
I hate it when vegan recipes are prepared without using REAL vegans !
The seared flesh of deceased herbivore, its whats for dinner......
It's kind of hard to picture anyone known as "... the Terrible" as a vegetarian. Even Hitler was just Hitler. Nobody ever called him Adolf the Terrible-- probably because of his wimpy diet.
"Even Hitler was just Hitler"...No, Hitler was a vegatarian and his buddy "Fatso" Herman Göring was an animal rights type of guy who banned grammar and high schools from kids learning about frog, etc. Now people, well that was something else. Sounds like a typical cumbaya Lambourghni Liberals.
Hey I'm Vegan, the cattle eat a Vegan diet then I eat the steaks
Truly, let them do all the work of breaking down all that plant matter......
Why in the world would anyone want to stop the printing presses?
It is free money!
I expect it to take the place of taxation as a major source of running the government, any government.
The biggest mistake would be to go into this halfhearted.
/tiny, tiny s
Tax=control so I don't see it happening.
If they monetize the markets then they'll own the corps(es), governments, and consumers - everything. All this time they've been touting their efforts to control demand when they've been angling at controlling supply. When you have it all you don't need to tax others. The others do need to wallow in adoration of your wonderful self if they want to eat.
Serfdom
"You there! Serf! Do you wish to eat today?"
"Why yes. Yes, indeed I do."
"Then kill the man next to you and you can eat him."
Sports, it's gonna be a blast in the new new normal.
Jeff - The collapse is ongoing. When half the population make less than $30k a year and it costs $75k in most places for a middle class lifestyle it means we're turning into Mexico.
First part of a bust is always inflationary, then deflationary. We're entering round two. This has and will continue to impact my personal interests and the society at large.
I make hay while the sun shines and put it into hard assets. No different than what the uber wealthy are doing, except a smaller scale because we all know that the debt and entitlement promises are unsustainable.
Whether the debt is restructured over one year or five so you can still surf porn and buy pop-tarts occassionally is immaterial to the standard of living prior to this last decade.
We are 2/3rds of the way through this ugliness but the last 1/3 is going to hurt a tad more than the last several years. Are we all going to die? No. But assuming there is no world war 1/2 the population of the West is going to die poor. That is called collapse...
Jeff you ate up fucker, the collapse has already happened, we're waiting for the corpse to evacuate the bowels..
https://www.youtube.com/watch?v=krcEKkKcBfw
Jeff, you dumbass!
Collapse isn't an event, it's a process.
Nothing has prevented collapse. WTF do you think has been happening for the last 8+ years?
+1 "Collapse isn't an event, it's a process."
I would call it decline, but then I'm lacking any proof for things that are anyway in the future
Jeff your plagiaristic spambot malfunctioned and only left half of the reply it lifted in the other thread.
http://www.zerohedge.com/news/2015-01-07/10-key-events-preceded-last-fin...
http://www.zerohedge.com/news/2015-01-07/10-key-events-preceded-last-fin...
Spiegel "Stop Putin" at its content-free best.
Installed by the victors after a successful world war, it took the Germans over 50 years to find out that Spiegel is brainwash device. It has rightly been termed "Stürmer of the liberals" by the philosopher P.K. Feyerabend therefore.
Its "research" consists in zealously collating FT, Economist, BBC snippets. Germans do not regard Spiegel stuff as expert opinion worth noting.
Ironically, for being a sole mirror of the message of TPTB, the label "Spiegel" (meaning "mirror") for a propaganda outlet is rightly chosen.
absurd
The ECB never had control. It only sucked the masses into thinking it did. Question is how long the serfdom can remain sucked in. I doubt Draghi has, or can grow a pair.
Real wealth cannot be printed.
Says YOU. Are you a central banker with a PhD in Economics? I think it'll work like a charm. Then all that's left is to make it a yearly thing. Then monthly. Then weekly. Then daily.
snark snigle giggle.
...It's getting a little crazy in here.
https://www.youtube.com/watch?v=fwiXG0p3N6g
grf guggle hee hee
Then one day, not at all... But until then, you are right.
If only that economic graduate who killed his hedge fund manager father could have waited a bit longer. He could have been getting his weekly allowance straight from the Fed.
That's the part they do not seem to worry about, the phase where acceleration kicks in. Only the Germans are empirically in the know about that one.
To paraphrase some guy: this world is getting stranger by the year. By the month. By the week. By the day.
I'm offended by the title....as if "helicoptering cash" isn't being done right now on a large scale.
The only question is where's the damn helicopter....and it's flying over Manhattan dropping pallets of hundreds on the banks in a 24/7 operation.
...and that is real wealth, and it is being printed. The correct statement is "net wealth cannot be printed", but it damn sure can make a minority very wealthy at the expense of everyone else.
ps...there is a trickle down affect to fortune 500 companies (with stacks of debt) and government employees and recipients of gov cash. But it isn't a net wealth...it's only siphoning wealth from the shrinking masses.
Oh yes real wealth can be printed. Real people create real wealth through their labor; printing tranfers their wealth to Wall Street. It works really well.
debt repudiation is as certain as gravity. The fact that it is not spoken about more widely and frequently is absurd.
If debt is written off, what happens to the few responsible souls who have none?
We few, we happy few, we band of buggered...
dont worry the elite would like to stay in control and the rich would like to stay rich and controlling
conclusion it wont go down without a fight and shear madness
why would any ptb or banker elite be against printing money? how about the primary dealers of treasuries. and the absurd comments that allude to some kind of responsible economic behavior. wow. wish with lack of think. would you stop getting increadably wealthy without having to do any form of actual physically exhausting work. go rent a tux and have a limo pick you up and take a ride to a PLACE BANKERS GO TO. GET OUT GO INSIDE AND PRETEND YOU ARE THE CENTER OF ATTENTION. now pretend your paycheck is 20,000 per week with a huge million dollar plus yearly bonus. ok, now tell me you want to refrom the fiat banking ponzi, ha...
"It has to be massive if it is going to have any effect."
Trillion-euro coins for everyone. Let's go full retard and burn the roof off this fucker.
Have Heliocopter Ben add a couple door gunners to that fucker with some M134D Miniguns, Zillions of broken windows and healthcare patients ... economic problems solved
https://www.youtube.com/watch?v=D6i1UnfJwkQ
I got nothin' on this one, guys. This is so ridiculous I don't even know where to start.
This here hard-boiled egg gonna cost ya $75,000.
$145,000 fer two!
Just cut everyone on earth a check for 1$ billion dollars....surely that would make things look better for a while.
That and give me a loan at a negative interest rate and I will borrow HUGE sums of money.
I guess the reson the terrorist hitt those folks in France and not Brussels is of of professional courtesy
Next ideas from SuperMario:
QEOIL
QERE
QESTEEL
QECEMENT
QEIRON
QECOPPER
QESILVER
QEGOLD
QEDEPENDS
Just print and buy futures, why bother with bonds and stocks, it's all paper anyways unless it's PHYSICAL. The Germans can't stop direct monetization of Commodities. You want inflation, start with the Commodities Dumbass!
DEFLATION
enough with this circus, just print that paper!!! lol
When a currency isn't backed by anything it is easy to print it and hand it out like paper. Because that is all it friggin is.
When they start handing out Gold then you are really giving away money. Too bad China has it all.
€500 would be enough to spur the Eurozone.....OH SURE bro, tell us another whopper of full retardation!
we had "helicopter ben" and the EU has "a day late and a euro short"
The Helicopter Drop Scenario will DESTROY the 99% and result in an accelerated devolution into feudalism.
The larger the Helicopter Drop the faster the plunge into the abyss.
THINK.
IF most people have less than $100M and you give everyone $100M -and this kicks inflation up to the point where $100M is peanuts: only the Uber Rich -The BILLIONAIRES will actually have any substancial wealth in comparison to everyone else.
Boom. Feudalism.
Jubilee aka DEBT REPUDIATION is another concept entirely.
Us'uns from Tennessee ain't afeared of that thar feudalism. We's pretty good at it already.
You got a pretty mouth.
Remembering back to getting that $300 check from the gubmint what I thought when I looked at it was 'They think I'm a stupid asshole!'
I photocopied mine...it's in a frame over the mantle.
Ring-a-round the rosie,
A pocket full of posies,
Ashes! Ashes!
We all buy bonds
I'm sure that the Chinese will be happy to keep working for the worlds helicopter bucks. Hell let's just put central bankers muggs on the bills with a pic of santa chopper for on the back.
One thing that has always stuck with me from the time I first started reading financial books is the observation made by Howard Ruff that stimulus does indeed work but every new stimulus requires a greatly increased jolt in order to obtain the same result as previously.
Watching the GWB and Obama stimulus programs seems to bear this out perfectly. We are now at the point where an extra trillion dollars or two was barely sufficient to stabilize things at a low level. What sort of voltage will the next financial crisis require? I'm thinking about an electric chair sort of thing where the lights grow dim all over town at the moment of truth.
Or . . . they realize it never worked, and instead are taking a Pavlovian approach: the mere sound of the bell (i.e., Draghi/Yellen's mellifluous voices) cause markets to salivate.
"The ECB has lost control."
That is only one half of the full De-La-Boettie revelation.
They'll have gone full-Boettitian when they realize that the ECB never had control...and neither did the national governments.
It was all a CON to give money and power to a few unscrupulous souls.
Joy Division - She Lost Control
Bwahahahahaha
. . . and will likely end up being an 'Atrocity Exhibition'
For entertainment we watch Draghi twist
Behind his eyes he says, "QE exists"
This is the way, step inside
Let me clarify for other posters, Operation Twist. We can ship a Hasbro® Gay Twister Edition Game. Where Mario Draghi the spinner, calls the shots and you make NIRP moves on colored banking account dots.
Why give everyone 10,000 ???? Just give everyone one ounce of Gold.
There's not quite enough.
All the gold above ground spread evenly between the world's population comes in at 25g per person.
One Troy Ounce comes out at just over 31g.
40 acres and a mule!
40 acres and a mule!!
Do I hear 40 acres and a mule!!!!!
Can you say Basic Income?
http://en.wikipedia.org/wiki/Basic_income
Joseph Tainter; The Collapse of Complex Civilisations
Yeh gimme those 000 on me shiny card bitchez, I need zem! stocks and gold bitchez, stocks and gold!
As for ze iphones, i already got ze galaxy! hahahahaha now you dont look so cool anymore bitchez!
How much gold can one get for €3,000?
Or maybe it should be used to pay down debt...
Lottery tickets, every dime of it.
Free money? Hey I'll just quit working. Production has no value right?
the one problem is the cetral banks balance sheets are starting to look crazy the FED is leveraged was 56/1 back in 2013 (see article below) its now close to 70/1... so for FED its difficult t print more unless some changes are made. I wounder if ther BOJ even puts out a leverage ratio but it should be worse .... Currently bond holders dont care about this but maybe the breaking point is when they realise the 3 main central banks FED/BOJ and soon ECB are leveraged all over 50/1 maybe it gets to 70 or 100 but I mean there at leves where even small move against them and they are bankrupt (they prob all are now markmarket)..
to think how crazy 70/1 leverage is .. its like you buy a house for 4,900,000 mill USD and you put down 70,000 and borrow the rest... thats 70/1 hello does that sound like it could work out .. and they are move leveraged than that..
so to keep their positions from really looking bankrupt they need to keep buying more and making the leverege more extreme or the govt needs to balance the budget (stop selling) but neither will happen..so
when the other bond holders (think Japan thats about 8.5 trill yen non BOJ bond holders (still close to 200% of GDP after BOJ holdings) realise mm they cant keep increasing their holdings (they have no assets ).. then their will be panic..
I think they will have no choice but to move to real assets which prob include gold / stocks / corporate bonds of low debt companies and low debt country bonds...
but these 3 central banks under the current leverage cant make it...
http://www.forbes.com/sites/richardsalsman/2013/04/02/an-overleveraged-f...
If the ECB is to warm up the helicopters, how would this work operationally? Ideally, the ECB would simply mail every Eurozone citizen a gift card that has 1000 Euros on it, can only be spent at stores, and a near term expiration date. Then they could measure the effect, or lack thereof, before doing any bigger stimulus. But can the ECB actually do this? The ECB does not have a register of all Eurozone citizens. This info is held by the tax authorities of the individual EU States, and the ECB cannot command them. Does the ECB have the bureaucracy required to produce and process 500 million gift cards? Nope.
One way to do it would be for the ECB to fund a program for the individual States to hand out gift cards. Another would be to give every EU citizen an account with the Central bank, and to hire the huge permanent bureaucracy that this entails. This could be sold as one way to protect EU citizens from ruin during a bank collapse. It would also double as a way for the ECB to control the economy through targeted stimulus, and for the EU Commission to directly collect taxes.
1. One ounce physical Gold Coin
2. $10,000
3. Debt JUBILEE $50,000
Take your pick......but choose wisely
You know the news all day was terrorist attack in france wonder wtf is really going on while markets returned to thier old ways of btfd theater is hilaious ive been watching for 5 years and this cycle is getting shorter and shorter but collapse no way btfd till you get MOAR
"After all, not a single central bank has ever tried such a daring experiment."
I thought the JCB was handing out debit cards to consumers, not log ago...
Germany needs to join Russia in the Anti-Bolshevik Federation, fire up a few SS units and get on with it.
Come on Yellen don't let Draghi beat you to it. Send me more now.
NO economy can be efficient when burdened with massive debt. To be sure, when someone borrows a huge pile of dough and spends like a drunken sailor, they may (better) enjoy themselves, because the hangover is inherently horrible.
ALL spending of borrowed money (except a few instances of spending on productive machinery) steals from the future. Simply stated, you buy stuff now (with borrowed money), and later when you pay that debt back, you must refrain from buying even more (when you count interest).
And so, the more borrowing, the worse an economy. The more debt, the worse an economy going forward.
The PREDATORS in government and central banks are 100% responsible for the disasterous state of the world economy today.
Why? Very simple. When official money == gold, only a small amount of money is available for loans (available to lend and create debt). Only a portion of current savings is available, because there is no other money to lend out.
And so, the abandonment of real money (gold) and the substitution of absolutely, completely, utterly and totally unlimited fiat, fake, fraud, fiction, fantasy, fractional-reserve piles of steamy stinking debt caused what?
It caused the financial predators to concoct every manner, shape and form of argument and mechanism to get anyone and everyone into debt. There was absolutely NO LIMIT to how much fiat debt they could create, and a huge financial incentive to lend out money that cost nothing to create.
Everyone knew this would get out of hand. Anyone who claims otherwise is either a blatant liar, or one of the dumbest fools ever born.
And indeed, the debt did explode. Which was great as far as hyper-predatory mass-murders like Johnson and his military industrial complex were concerned when they spent endless non-existent wealth (via fiat debt) to kill millions of people in Vietnam... and to buy millions of votes at home with welfare programs (with money that wasn't theirs and wasn't money).
Oh, the predators-that-be knew exactly what they were doing, and exactly what the consequences HAD TO BE and WOULD BE. They are always the same... when fiat debt is how a nation swings, no restraint on debt exists, and the party HAS TO END once everyone from government to corporation to regular-old-folks are deep, deep, deep in debt.
Oh, it isn't that the financial predators wouldn't continue to lend out fake money when everyone is in deep debt... who cares, the fake money cost NOTHING to create. However, there is a bit of a problem nonetheless. Once the borrowers have borrowed so much they can barely make the payments... they cannot take on more debt without FAILING to make the payments. Which means, the gluttonous equivalent of Thanksgiving Dinner Buffet is over.
And now... all that debt is exactly what it always was... stealing from the future. And the future has arrived.
And now all the "intelligencia" to CREATED THIS PROBLEM pretend they are mystified why the economies of nations are so lame... just because everyone is deep in debt and therefore has no money to spend after making their existing debt payments.
I mean, please. Give us a break.
The current state of the world was 100% intentional, right from the start. In fact, from before the start. This is merely the umpteenth time this has happened. And as every honest individual knows, the only way to have a viable economy is for people to exchange goods by BARTER. Which means, both traders receive something of equivalent value from their fellow trader. That may be eggs, or lumber, or... well... gold is mighty convenient! Easy to carry around. Doesn't corrode or spoil. Yup, pretty good stuff to trade. As is silver. As is anything lots of people understand and are willing to accept.
If human beings had even 10 functioning neurons they'd read a few articles like these, then en mass, load up their weapons, and hunting for predators, starting with the predators that slaughtered the entire world economy, not to mention liberty.
gold is as abitrary as bitcoin...think about what you can rely on that means you aren't going to starve or thirst or need treatment before you share your wisdom with the wider civilian populace :)
If you don't like gold... THAT IS FINE. The point is to save and trade something REAL and PHYSICAL that has REAL VALUE to human beings.
If you find saving and trading seeds or machine screws or toilet paper makes more sense for you... then go for it. But don't attempt to wave away the point, just because you don't like the "real, physical good" that many others do (for saving and trading).
This guy is an asshole:
- He has personal interest as a Citibank, A beneficiary, an Inheritor, A Crony Capitalist, named William Buiter
William Buiter is unconcerned about EU regulations preventing the ECB from the kind of direct state financing such a plan would entail. He considers Article 123 of the Lisbon Treaty, which addresses the issue, to be a "disaster" anyway.
Classism in USA
- Looks like 5 Classes
- Elite Class who go to Ivy League Universities, and now Run out biggest organizations, Often Elites are born Elites, Tremendous connection to Banking & Finance
- Non-Debt Class of Workers, Professionals, Voters
- Debt Class, Voters
- Immigrant Class, can't vote, start poor, don't start with debt, Usually are paid the lowest Wages
- Criminal Class, Prison Class, usually can't vote, are poor
"Classism is differential treatment based on social class or perceived social class. Classism is the systematic oppression of subordinated class groups to advantage and strengthen the dominant class groups. It’s the systematic assignment of characteristics of worth and ability based on social class."
if you share the view that air forces consisting of heliopters with money on board are markedly different from helicopter gunships...vote up..since either have as much positive influence over the quality of your life.going forward...
if you share the view that central banks have as much influence when they use helicopters as gunships that fire blanks...vote down
in either case, a common denominator of helicopters, when you haven't got one, should indicate that both situations depend on a variable
fuck helicopters and people callled mohammed
:)
Government is a Cult. Electing Elites, the same Elites year after year is a Cult. US Monetary Policy is a Cult.
- Wall Street Banking is both a Monopoly, Banking Trust, and it is a Cult
- The US versus them Paradigm is a Cult Tool
- Propaganda in the USA sustains the Cult
- Name that Cult? Cult of Leadership by Elites
- Who are the Elites, what is their Ideology? As old as Mesopotamia, maybe Mystery Babylon is as good as any, however it is not just Liberal or just Right Wing like Neo-Cons of Zionism, they co-exist to support the banking, Financial, Political, Economic, Elitist, MIC, Military Republic with European Traditions
"every resident of the euro zone comes home to find a check in their mailbox worth over €500 euros ($597) and possibly as much as €3,000."
Yeah, bush tried this. They try this then they try something else, then in the end they recycle. History Repeats all over again. That is why they dumb us down and simplify history to benefit themselves, and control all narratives just like Sean Hannity.
Shopping is work.
To unpack is work. To get angry as well to boast about what has been bought and finally to make use of it, work, work, work that wasn't paid till now.
Just 2 short months ago we warned of the risiJust 2 short months ago we warned of the rising voice among the cognoscenti tilting their windmills towards the concept of "helicopter money," as Deutsche bank noted, "perhaps there's an increasing weariness that more QE globally whilst inevitable, is a blunt growth tool and that stopping it will be extremely difficult (let alone reversing it) without a positive growth shock."
Pretty amazing how stupid headlines can read when written by those who don't know what money is.
Money is "a promise to complete a trade". This is made obvious examining the three steps of trade: (1) Negotiation; (2) Promise to deliver; (3) Delivery. WIth simple barter (2) and (3) happen simultaneously "on the spot". Money allows (2) and (3) to happen over time and space. Thus, money represents "in process trading promises". Once created by traders, money is exchanged as the most desirable object of simple barter. Money is "extinguished" on delivery on the trading promise.
(A) Knowing that, how do you drop a trading promise from a helicopter? (B) Knowing that, how do you "ease" (QE) a trading promise?
The answer to (A) is "you can't". What you drop is nothing but counterfeit. The answer to (B) is forgiving the promise (i.e. one trader settles for less than he negotiated).
QE is making the entire marketplace do the forgiving through INFLATION. It is DEFAULT pure and simple (i.e. monetization of debt). It must be balanced with an equal amount of INTEREST collections to "protect the integrity of the circulating money" (trading promises in process).
The governing relation is INFLATION = DEFAULT - INTEREST. A properly managed medium of exchange holds and guarantees INFLATION at zero all the time and everywhere.
Yeah. I think I am with you. I get mixed up between Currency and Money.
Fiat is an IOU, from the Central Bank or the Federal Reserve.
So we accept Fiat = Money = Currency, in General.
But Currency is something deeper. Right.
A currency (from Middle English: curraunt, "in circulation", from Latin: currens, -entis) in the most specific use of the word refers to money in any form when in actual use or circulation as a medium of exchange, especially circulating banknotes and coins.[1][2]
A much more general use of the word currency is anything that is used in any circumstances, as a medium of exchange. In this use, "currency" is a synonym for the concept of money.[3]
A definition of intermediate generality is that a currency is a system of money (monetary units) in common use, especially in a nation.[4] Under this definition, British pounds, U.S. dollars, and European euros are different types of currency, or currencies. Currencies in this definition need not be physical objects, but as stores of value are subject to trading between nations in foreign exchange markets, which determine the relative values of the different currencies.[5] Currencies in the sense used by foreign exchange markets, are defined by governments, and each type has limited boundaries of acceptance.
The former definitions of the term "currency" are discussed in their respective synonymous articles banknote, coin, and money. The latter definition, pertaining to the currency systems of nations, is the topic of this article. Currencies can be classified into two monetary systems: fiat money and commodity money, depending on what guarantees the value (the economy at large vs. the government's physical metal reserves). Some currencies are legal tender in certain jurisdictions, which means they cannot be refused as payment for debt. Others are simply traded for their economic value. Digital currency arose with the popularity of computers and the Internet.
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Commodity money is money whose value comes from a commodity of which it is made. Commodity money consists of objects that have value in themselves as well as value in their use as money.[1]
Examples of commodities that have been used as mediums of exchange include gold, silver, copper, salt, peppercorns, large stones (such as Rai stones), decorated belts, shells, alcohol, cigarettes, cannabis, candy, cocoa beans, cowries and barley. These items were sometimes used in a metric of perceived value in conjunction to one another, in various commodity valuation or price system economies.
Under this definition, British pounds, U.S. dollars, and European euros are different types of currency, or currencies.
They may be currencies but they are not money. They are not created by traders making trading promises. They are less acceptible in trade than "certificates of trading promises" which are backed by the marketplace as a whole; made valid by a guarantee of zero INFLATION ... i.e. they never lose value anywhere over any period of time.
Once these certificates are created by traders, they are accepted in simple barter trades because, by experience, traders find they are universally accepted everywhere because they hold their value. When the trade is delivered as agreed, the certificates are extinguished ... guaranteeing that supply and demand are in perpetual perfect balance. And everyone is a trader and almost everyone creates money (when you promise to exchange 360 future payments for a house you take possession of in the present ... "you" are creating money).
Currencies can be classified into two monetary systems: fiat money and commodity money, depending on what guarantees the value (the economy at large vs. the government's physical metal reserves).
If that's the case, then neither are money. And that "is" the case. Thus, we should adopt the case where currencies created by traders making trading promises are used. It's not about who guarantees the trade. It's about how the trade originates. This is an obvious third case few people can envision. When the obvious is not envisioned by the majority, the deception will prevail. With governments, the currency is not a trading promise unless it is paid back as agreed. Governments don't pay back their trading promises ... they roll them over ... i.e. they default. That is counterfeiting.
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The only thing that woudl work , but it has not been tried , because it would open another can of worms like the esistential salary , is actually to give money to the citizens . The BCE gave money to the rich bankers at the fantastic rate of 1% and there was no result apart from apparent consolidation of the TBTF debt . The money given to the banks has not trickled down , it will never will .
So another desperate move is necessary . To ristart customers spending a direct injection in the pockets of the citizens is necessary . In the EU according to some articles more than 200 Billion Euro were given to the banksters and the result is evident now ...... we are in recession . I propose Draghi to give 1000 dollars to every european citizen of the EU including babies . lets' say 400 million people .
It could only cost about 400 billion euros that are guaranteed to make an impact on the economies .
if they continue to hold rates here eventually pension funds will go under. The two problem debtors are Japan and US (ie out of control) Germany has actually kepy Europe on the light side although perifery are high..The difference aka Greece the perifery can actually work out restructure with private creditors.. IF US or Japan try this it will be seen as catastrophic default.
The public cant see that the zero rates have nothing to do with the economy, it is purly the Govt does not have enough income from tax to fund the debt period..
ie the constant FED/BOJ/ECB officials talking about inflation and employment is ridclious, never mentioning the debt and leaving rates unch for years. The US stock martket is at record highs, their claiming 5.7% unemployment, but zero rates required (nothing to do with Govt debt just economic facts)..
Its pretty clear the low rates and loss of income from investment is killing the economy to save the Gov.. It also makes people more dependant on Govt and has prob lead to high miss investment in private sector so if rates ever normalize they wont be able to afford to roll over the bonds,,
the double speak is amazing, Abe acknowledge that peoples main issue in the election was prices have gone up too much since the weak yen (ie excessive inflation) so he is going to give some subsadies for some goods, in the same breath he says but QE must continue because.. they need to get inflation higher..
So pensioners get no interest and higher prices..
The new Greek leader is right in a way. They should be honest do one big debt restructure where the central bank buys almost all domestically held bonds (or whats requiried to get debt to GDP down to say 30% . And then start again, with rates normalizing,, Possible some private sector debt that was aquired becouse they followed the crazy low rates can be done as wel.. ie just do it and let rates normalizse