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"The Government Is Literally Paying Itself" - Citi Calls For Money Paradrops
Last Friday, we posted what we thought was a watershed report by Australia's largest investment bank Macquarie, one which openly called for central bank funding of fiscal spending, aka "helicopter money", by directly monetizing treasuries. Ironically, the bank made the call despite admitting that it would not work in the long run, leading to even more stagflation and deflation. This was the gist:
As velocity of money globally continues to fall, conventional QEs have to become exponentially larger, as marginal benefit declines. If public sector is not prepared to step aside, what other measures can be introduced to support nominal GDP and avoid deflation?
There are several policies that could be and probably would be considered over the next 12-18 months. If private sector lacks confidence and visibility to raise velocity of money, then (arguably) public sector could. In other words, instead of acting via bond markets and banking sector, why shouldn’t public sector bypass markets altogether and inject stimulus directly into the ‘blood stream’? Whilst it might or might not be called QE, it would have a much stronger impact and unlike the last seven years, the recovery could actually mimic a conventional business cycle and investors would soon start discussing multiplier effects and positioning in areas of greatest investment.
British Leyland (formed from nationalized British car companies in the late ’60s) destroyed its automotive industry but for a time it provided employment and investment. CBs directly monetizing Government spending and funding projects would do the same. Whilst ultimately it would lead to stagflation (UK, 70s) or deflation (China, today), it could provide strong initial boost to generate impression of recovery and sustainable business cycle.
The report was critical for two main reasons:
First, it admitted that the conventional Fed QE approach of using banks (and excess reserves) as intermediaries, is now widely accepted as a failure (as we noted earlier) and that a more "acute" form of money printing would be required, one which nobody would mistake for what took place in Weimar Germany.
Second, and even more important to us, was that now that the seal has been broken on "very serious people" discussing monetary paradrops, it was just a matter of time before the entire sellside brigade jumped on board this brand new bandwagon. To wit:
"will the Macquarie report become the benchmark which the other penguins will ape as suddenly calls to bypass the banks become the norm and suddenly every "authority" on the topic, which so vehemently advocated for QE, admits it never worked from day one, and instead recommends that the only option left to save the world is the "nuclear" one?"
Today, less than a week later, we got the first official penguin in the form of Citigroup, which just released a note titled "Cold Fusion", which proposes a way to "transform ineffective monetary into effective fiscal policy."
See if you can guess what it entails (hint: "Bernanke's Helicopter Is Warming Up", September 13, 2013)
This is Citi bulletin summary:
- With rates at zero, fiscal policy will be needed to offset any negative shock that hits global economies
- The practical way of doing so is for central banks to indicate that their balance sheets will remain large permanently and keep expanding if targets are missed …
- …opening the door for either additional spending or lower taxes financed by the central bank
- … a (very cold) fusion of Krugman macro, Republican tax and Bernanke (2002) monetary policies
- The policy is rates positive, so the first central bank that goes down this route will likely see its currency appreciate as the effects are felt
The details are self-explanatory but here is some more from Steven Englander:
G10 policy rates are at an all-time low but already investors are discussing what central banks will do at the next downturn. There is reason to be concerned – rates at all-time lows and balance sheets at all-time highs have not generated sufficient recovery to enable any G4 central bank to begin the normalization process. The fear is that the downward part of the cycle will start sooner than expected, precipitated either by China and EM, as our economists have argued or some other shock.
The first instinct is to say more QE, but if the expansion of balance sheets so far was not enough to avert a new downturn, there will be skepticism that additional balance sheet expansion will reverse a new slump. Moreover, the balance sheet expansion seems to have been reasonably effective at lowering yields and pumping up equities, so the slippage has not been between policy and asset markets but between asset markets and activity, and there is no strong reason to think this will change. If these historically low rates were not enough to generate a durable recovery, it is unlikely that the next 30-50bps will be enough to counter a negative shock.
To summarize: a recession is coming and conventional QE has failed. Worse, the Fed backed off its experiment at generating a reverse-psychological recovery, whereby a rate hike would have been seen as a catalyst for imminent growth (because what do they know), so the current arsenal of "tools" is useless.
Well, time to come up with a different tool. Here's Citi:
We now think that the move to central banks endorsing fiscal policy and essentially monetizing the added spending will be relatively quick and direct, in the event of a sudden slump in the global activity. When we wrote earlier on this subject we arrived at fiscal after other alternatives had been exhausted, but we now think it can be managed within the current monetary policy framework of most central banks.
Yes, the chopper.

Continuing:
The argument for fiscal policy via central bank monetization is that it directly injects purchasing power into the economy and will increase activity or inflation or both. QE increases the balance sheet but there is no guarantee that the increased lending and spending will result. In consequence many have argued for true helicopter money which is central bank financed final demand, rather than reserves creation.
Citi realizes that calling helicopter money by its true name would be a problem, so it proposes an "innovation":
Our ‘innovation’ here is to suggest that central banks will invite fiscal spending by announcing that their balance sheets will stay expanded permanently, or almost equivalently, be reduced only under extreme circumstances, and that they anticipate additional permanent expansion if targets are missed. Effectively this eliminates the government debt from the balance sheet, since any coupon payments on the debt are remitted back to the government via central bank profits. Literally the government is paying itself, which is not a bad deal if you can manage it. Many central banks are forbidden to monetize government debt, but governments will understand that permanent balance sheet expansion is an invitation to spend more, opening the fiscal channel.
Shorter Citi: it's time to unleash the biggest Ponzi ever, "which is not a bad deal if you can manage it." If you can't, it's game over.
At that point all that's left are the political considerations of how to implement this as policy:
If the government understands that the CB’s QE is permanent it opens the door to direct fiscal measures and increased demand. Congress may have different ideas on the virtues of additional spending, but they could be tempted by the prospect of Fed-funded tax cuts. There is nothing that forces fiscal policy to be highways and bridges, rather than low personal or corporate tax rates. There are plenty of Republican tax cutting proposals that rely on economic expansion or animal spirits to close the fiscal hole that the tax cut brings (for example, http://www.wsj.com/articles/how-would-the-jeb-bush-tax-plan-affect-you-1...). Combine such a proposal with balance sheet expansion and you have big-time money financed fiscal stimulus. Essentially you are combing Paul Krugman fiscal with Republican tax and Bernanke 2002 {link} monetary. Government spending and infrastructure could be used as well, but it is important to understand that fiscal expansion is not synonymous with government spending.
Politically it is difficult for central banks to outright endorse monetization of government debt, but faced with another slump and armed with ineffective policy tools, we expect that central banks will quickly give the wink and nod to fiscal measures – the Fed relatively quickly, the BoJ at the drop of a hat and the ECB with an eye to warding off the growth of anti-euro political movements. If a central bank wanted absolution for this move, it could follow a rule along the following lines -- if inflation is below 1.5% use monetized fiscal policy, between 1.5% and 3% stabilize the balance sheet, above 3% inflation shrink the balance sheet (the Englander-rule, if you insist.)
The announcement that the central bank portfolios would remain permanently enlarged could have an immediate effect on inflation expectations, in addition to any impact on real expected interest rates from anticipated fiscal spending. Low policy rates at the front end and balance sheet expansion preventing the fiscal injection from pushing up medium-long term rates are a powerful stimulus combination ( I think this was Jacob Viner’s recommendation during the Great Depression). The fiscal spending means that monetary policy is pulling rather than pushing on a string so it makes both policy tools more effective.
We are not tenured economists but even we can tell you what would happen to inflation expectations: they would promptly get a "hyper" prefix.
The rates effect is very likely positive at the medium and long end as expectations of growth and inflation rise. To get the maximum activity and inflation boost the central bank may have to keep policy rates low or zero, so that short-term rates become negative relative to inflation expectations. This introduces some ambiguity into the currency effects but we think that the prospect of normalizing activity and hitting policy targets will be currency positive.
Of course, if Ponzi schemes worked then every country would just monetize its debt from day one. At least Citi acknowledges that there are risks to this lunacy:
There is the possibility that this ends up as an activity negative if the fiscal easing is promised, but not implemented, as rates would rise, effectively tightening monetary policy, without the boost form fiscal. So generating expectations without follow-through is dangerous.
Finally, lest Citigroup be accused of urging the end of the USD as a global reserve currency (because make no mistake, if and when the US launches the helicopter, this is precisely what will happen), it hedges:
We view this note as both positive and normative. The positive side is that it discusses how central banks are likely to respond if they face a negative shock when rates are already zero, and even they must be having some second thoughts on the effectiveness of QE. The normative side is that increasingly the absence of fiscal policy is viewed as one pf the reason for a less than satisfactory recovery and we outline a practical way by which central banks could endorse fiscal policy without fully dropping the idea of independence and non-monetization.
And just like that Weimar 2.0 is born.
What Citi's "innovative" proposal really means is that the idea to monetize the debt outright and to "paradrop money" is now being actively discussed among the highest circles of power, and not if but when the next recession hits, it will most likely be implemented.
Trade accordingly.
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Citi announces old news.
Old news on ZH not in the main stream. I still think they are going to move toward an E dollar concept as discussed by Haldane yesterday, one of Times 100 Most Influential People of 2014, and also happens to be a policy setter for the Bank of England.
Good luck getting the Amish to adopt e-anything. They just won't do it. The courts will back them on it too - Religious freedom is the one thing that still holds sway, so long as it is an "approved" one.
First off I don't condone the E Dollar, I just think that is what they are going to try to pull. It fits the trend of past monetary shifts, namely the banks and government get stronger, and the mob will eat it up as progress. Don't get caught up on the Electronic part. Its all about the exchange rate phasing out cash, and allowing negative rates, as well as a slow debt jubilee over time. Its yet another patch to continue the debt based monetary system.
The Amish also didn't adopt the use of cars, didn't stop everyone else from using them. I grew up in Amish country, they also don't pay taxes, doesn't prevent the government from throwing us in jail if we don't.
these guys fake moon landings, terrorist attacks, wars, invasions, assassinations. they blow up planes, silence innovators, sexually mutilate infants, inject poisons into children...why are we surprised they pay themselves?
"The Government Is Literally Paying Itself"
This is news?! They've been doing this for decades.
Wouldn't it be easier to abolish taxes? What's the point in pretending to collect tax dollars and then throw more than you collect back into the public? Who are we kidding here?
Funny - if you look at the relationship of core population growth vs. FFR and federal deficits...it's saying it's time for Helicopter money as well...particularly look at the 2nd chart...
http://seekingalpha.com/article/3522366-demographics-the-real-opponent-the-fed-has-been-fighting-for-decades
Only CB's would think to resolve massive imbalances by quadrupling (to infinity) the imbalances.
It’s a great idea…. The Fed (Goldman) runs .gov and the politicians get to keep their jobs, have no say in anything anymore but remain free of liability and accountability.
Gonna have to put Mr. Yellens face in the helicopter rather than Berspankme's.
Fukitall.
Money can fall from the sky like ZH sayz it comes from printing by central banks.
Shame on you Tyler Dirtenzh.
(When will you find your set?)
And we all know where that helicopter will hover ... over the Hamptons.
Indeed.
One of the most memorable comments around here lately was from the daytime regular, Laws of Physics:
my paraphrase - "if the fed really wants inflation, why spend Trillions and trillions via QE and not just write a check to every citizen for one million each?"
Oligarchy is as oligarchy does. ...Demagogues and despotism comming soon to a generation near you.
Is this one of those "constructive" ideas Andolfatto was referring to?
Priming the general populace for the "Amish Mafia" ones that kill without regard that must be stopped for the publics saftey.
I dont watch tee vee..but people tell me theres this show...
Maybe Israel will have to defend itself from this Amish Mafia.
RIPS
stuck on zero and oc sure have the issue that matters. calling this helicopter money is horseshit. don't for one second think you will see dime one, at least relatively speaking. read closely; this is for "projects". more cars that blow up, solar power companies that go bankrupt (i love solar power), plenty of extra security along the lines of the tsa, ice, dea, atf, etc. etc. etc.
the campaign contributors will get the vast bulk of this. same as it ever was.
you want to beat these poachers on the government of the people, by the people and for the people (well maybe a little bit), you better brush up on your 9-11. it is like the "minor trench" on the death star: it is the only way to destroy or even diminish and besmirch the u.s. power elite. do your part.
there is no statute of limitations on treason or murder.
https://www.youtube.com/watch?v=OsoY3AIRUGA.
https://www.youtube.com/watch?v=0GNww9cmZPo
http://www.luogocomune.net/site/modules/sections/index.php?op=viewarticl...
FED writing checks is counterfeiting...it's that simple
if they give it to "the people", "the 99%" then all prices will increase and the benefit of printing will be homoginized.
If they give it to Manhattan first, then they will enjoy low prices with their fresh money, and by the time it percolates into the 99% prices have risen for us.
We pay the cost of inflation...the "first spenders" enjoy free money and low prices.
That's always been the way counterfeiters and fiat money machines have worked.
Depends on what time of the year it is. If it's in the summer, then yes, the Hamptons. But if it's in the winter, then it will hover over Palm Beach!
It adds a layer of illusion, which they need. TPTB know how confusing the system must be. If they deficit spend with no taxes and people equate spending with money printing they may just 'get it' and the loss of confidence/increase in money velocity would ensue.
Explaination to an average person:
ZHer: The fed is printing money and buying govt debt with the promise not to sell, and also promises to buy more as needed. The government spends that money, and since they hold the purse strings they have all the power. You must continue to pay taxes to pay the fed back but this is an illusion....
Average person: Hold on, I'm going to go watch Dancing with the stars ok.
Sound familiar?
Spot on debt captain. You just answered my question about the difference between QE and debt monetisation... NONE! except the layer of illusion which is the banks taking their middle man arbitrage profits.
Maybe the government SHOULD borrow directly from the Fed... at negative interest rate!
AND
Simultaneously issuing a debt free currency to run side by side. Hrrmmm... could it be a viable idea?!..
I guess they really don't want to solve problems after all. Illusion On!!
Trillion dollar platinum coins and bad banks for everyone!!!
Wheeeeeeeeeeeeee!!!!!!
enough mr pimp your website nonstop
Collecting taxes accomplishes two things.
Taxes must be paid in the money of the governing body. This forces any tax paying producer to accept the government's paper as payment for goods. Because the producers accept this paper, anyone who wants the producer's goods or services will also accept the government's paper. This is the only reason the government's paper has value.
The second reason taxes must be collected is to hang over the head of the tax paying producers. This dark cloud overhead is a constant reminder that any business can be shuttered, any person can be arrested, any property can be seized, and any organization can be denied existence.
GEC-- Very well put!
Haha. Taxing isn't about revenue, it's about control.
Neofuedalism
The crowns on the printing press and it has private owners
RIPS
in the future the status of "employee" will be recognized as a euphemism for unknowing tax slave.
Governments have been paying themselves for the entire history of governments.
Governments have been paying themselves for the entire history of governments.
Actually they have not been paying themselves and the headline is misleading. To pay themselves Governments would have to own the right to create money. In fact they do not as this right is owned by the Rothschild led cabal. This means the headline should read "Governments borrowing more from Rothschilds than ever" or "public being pushed further into debt slavery to the Rothschilds". As Citi is part of the cabal it is understandable that the headline is so misleading
It's all fake anyways! The money is fake, the instutitions are frauds, the so-called leaders are actual, literal pig-fuckers, it's all a gigantic fucking fake sideshow of bottomless depravity and greed. This London taxi driver says it all about as well as it can be said:
https://youtu.be/nmM5_ZfkJ2A
"David Cameron Put His Thing into a Dead Pig's Mouth."
Each sect has different rules. Some have cars and cellphones, some have tractors with metal tires (no rubber, comfort!), some are old school 1800's living. e-money would be mark of the beast level stuff, and that will never be allowed.
I totally agree that e-money is where the officials want things to go - can't have bank runs that way. If they have a dual system that will defeat the purpose, and not be that much different than we have already. They want to take away the escape mechanism, and that would be challenged quite sucessfully in court on religous grounds. Ironic in my mind.
Lol, I've never known the Amish to be a political force, I don't think they could stop anything. As you said there is already electronic money, if the banks and goverenment want to phase out cash with this E Dollar thing...they will, no matter what the Amish say.
Let's dig up Old Hickory and turn him loose on the central bank.
Beware the Amish 1st Bella shock army . Forward!
The only certainty, is that a select few individuals in positions of power, and those who pull the strings will know all about it before the rest of us.
She said, "Are you an Amish, son?"
I said, "Ma'am, I am tonight."
;-D ...with apologies to Marc Cohn,,,
Time to find a new church . . .
These guys have some fucking balls on them. Now that they're all dug in deep and well connected inside the government the new great idea suddenly becomes: "let's have the government make all the spending decisions."
They must know they've already won or they'd be trying a lot harder to cover up this banquet of corruption and incest.
Or we could just go back to having Kings and Emperors and be finally done with all this bullshit where they have to fake caring about what we think.
this will happen regardless as that whch cannot be sustained, won't be. Get your tribe in order!
"In other words, instead of acting via bond markets and banking sector, why shouldn’t public sector bypass markets altogether and inject stimulus directly into the ‘blood stream’?"
^ This would be more addicting than meth and would end with the same disasterous results.
stop calling it "QE" and start calling it "WE" for "Weimar Easing"!
I say let's do it. Get that chopper in the air. Direct stimulus. The faster they do it the faster the economy goes Red Giant and then goes super nova. I want to get this world wide crash over with already. It's taking too long.
Isn't it amazing how this reinforces the statist cronyism ? Everyone connected to the Gov tit will thrive while everyone else will starve to death due to the run at inflation.
There is no "11th marble", never has been.
This has been the case for quite a while, and when fraud is the status quo possession is the fucking law. No one is going accept paper or digital bullshit for quite some time.
By the way, this has been going all over the fucking planet. In other words, this time is different in so much as this is in fact global Weimar!
Paying close attention to Global Stock Markets...
With the tacit admission of the FED that they are also paying close attention to Global Stock Markets...
It has just dawned on me that the FED has been using the Plunge Protection Team...GLOBALLY.
To think that it had been restricted to American Financial Markets was very naiive on my part.
You can actually see this happen this morning...in the DAX.
I guess that Brazil was a sacrificial lamb...like Lehman.
Weimar 2.0 here we come.
Abso-fuckinglutely CK
When has Government "not" been paying itself in the last 8 years?!!!
Been looking at proposed "demand side" solutions now for several years. They're all BS. Apparently there are no supply side economists left; and no one seems concerned about the trust element in any agreements between creditor and debtor - the creditor does expect to be repaid...always.
Time to get real.
This amounts to a demand by the current in charge generations to effectivly say fuck it and try and loot as much out of the system as they can.
Hyenas fighting lions fighting over a rotting carcass of a female anelope while the fawns helplessly watch from thickets.
I doubt think we will see CB money drops to consumers. That would "rob" wealth from the 0.1% top rich (/SARC) The rich will balk and prevent CBs from acting. They may fund the 0.1% directly instead of using banks, as well as fund gov't crony enterprises. I could see some Hedges like BlackRock, Citadel, etc getting bailed out (ie Fed buys up thier worthless crap for top dollar).
Why would they talk about moving to a cashless system if they had any intention of making cash available to consumers? Bail-ins for the working class depositors, "Plus Sized" Bailouts for 0.1%!
I had a feeling Zerohedge would post on this when I saw it this morning. Way to in your face, when this kind of stuff goes main stream.
And I had a feeling you would pimp your fucking blog yet again. FFS, man. What a joke.
"Cash For Clunkers" anyone?
Yes, version 2.0 where you don't get to choose the car, they give it to their political cronies and hand you the payment book.
If you were going to make a major purchase best go do it before .gov drives the price through the roof by giving millions of leeches free money, party on Garth
dont we need a pic of old bag Yellen haging out of a chopper ?
She rides a broom.
I prefer the one where her head is getting chopped off by the propeller.
Bitch is going to need a B-52 before this is all over.
"...the recovery could actually mimic a conventional business cycle..."
"Mimic" being the operative word.
The guillotine could actually mimic an execution.
#facepalm
Yes, let's again give a blank check to the greatest and most corrupt mis-allocator of capital in the history of the world: the motherfucking government.
Is there anyone left running this sad shit show with an IQ above room temperature?
This is an idea so fucking stupid, I COULD HAVE COME UP WITH IT. And if I'm the smartest guy left in the room, you're in a lot of fucking trouble.
Yeah, I'm thinkin how hard would it be to reduce the freakin tax burden AND slash some government expenditures in an amount equal to the proposed "helicopter money"? Ya think that might have a beneficial effect?
Moar sequestration? Cut something, dammit! Don't just keep Krugmanning our future away.
The only difference between outright printing and what we have today is the middleman making their cut.
You are, of course, exactly right. It was only shortly after WWII that a law was passed prohibiting the Fed from buying government bonds directly. (1952-ish, I think?)
That "middleman" would be screaming bloody murder if you tried to cut him out at this point, though. Especially since that middleman owns the Fed.
The first dog to chase his tail came up with this idea.
Is there anyone left running this sad shit show with an IQ above room temperature? - Things have become so dire that only the grasping of straws while drowning will suffice. This idea is very telling of the true state of the World.
Sniff sniff...
Is that a war I'm smelling? Why yes, yes it is, I smell a war a coming! Time to divert attention away from money handlers to whether or not little johnny is going to get drafted or not.
They will take my kids to war when I'm dead from killing them from within this shit hole our country has become.
Is that a drone I see in my window???
<rainbow vomit>
"Cash for Anything" program. "Give us some KFC or Arby's napkins for your free bag of $100 bills" .
Seeing as how a bag of hundies has a much higher BTU value than a few napkins this is a good deal.
with all the animosity towards politicians, gov'ts & central banks.... this stupidity is only a matter of time. I'm willing to bet it will be done on Obama's watch because he's a narcissitic lunatic who knows nothing about economics & monetary policy.
Don't forget who keep winning in the QE game. From the Bank of England.
If the government taxes people, yet wants to pay itself, the FED can just send every citizen $6 million and tax it at 10%.
Bypass the banks/corporations/insurers and markets and send it straight to consumers!
C'mon Janet! It is the only way! Prime at 6% and my $6 million check, pronto!
Bypass the banks/corporations/insurers and markets and send it straight to consumers!
They will be doing this shortly in the guise of an "ISIS" representative with a loaded AK-47 in your sector going door to door notifying you that you've "won"!...
Screw that: 1. Refund the last 15 years of federal taxes that were confiscated from me 2. Cash me out of the Social Security scam 3. I promise I will stimulate the economy and help to also recapitalize at least one bank.
+1 for what I would do. Cash out my S.S. +100 for getting my taxes back.
Right on. And it would screw the drug dealers and other under the table transactors out of the refund
If the government's paying for itself, WTF's going on with my tax return telling me I owe them thousands in tax?
Sucker!
Hey, How much ?
All you can do it laugh!
No kidding! But at least you can use the money to buy gold.
Yea right...there wont be any gold to buy.
The financial system, lead by the economic policy of the Federal Reserve and all central banks is a fallacious palace of lies and deciete meant to fleece money from "investoers" so to put the money in the hands of the banks themselves. Yet the banks do not use the money to capitalize said banks, nor pay shareholders, but to pad the pockets of the bankers themselves. This not only highly immoral but illegal, as bankers are legally meant to have their investors best interest at heart.
Because this system has buil;t up so much debt and credit and leveraged finance at hilt when the system crumbles, which it will, it will leave nothing in its wake.
NOTHING.
And there is no hedge; thus the name. Gold will have infinite value but strong must be the man who owns it otherwise he will be robbed. SKill sets will be what really matter. Personality and trade will be the only means of wealth accumulation. But you all know this in the back of your heads. SHit, even old Janet knows this all to be true.
so citi thinks the central bank should encourage higher budget deficits? so they want the fed independent from the gubbermint but only in that they don't want to be told what to do but rather the other way around. lovely.
The simple admission of truth by implication is just who is actually running the show here.
Dollars are a civil right.
Dollars? Is that what you kids are calling blowjobs now? If so, I'm with ya.
That may be so, but not the purchasing power of said dollars.
Well, QE1, 2, 3 after a 4.5 TRILLION balance sheet proves it can't be managed. So, GAME OVER! QE4 (~10 T) will be DOA. Way too much adrenalin for the patient. And ALL the administering physicians are incompetent. They killed the goose that laid the golden eggs ..
Bring on -- RESET ..
https://app.box.com/s/hfgvcqg7gqh7i27at6sv53ywu87lwarp
This has been in the works (planning) for some 35 years. It's time to deploy ..
+1000 - thanks for the link!!
PS counting QE Twist, TARP and TARP II plus a few other accounting tricks the Fed is on something like QE X.
Central Banks: Bringing Check Kiting to a Whole New Level!
We're all going to be millionaires! Hooray! Of course, a loaf of bread will be $400.
I'll pay off my house first, and buy the lot next door for a rental, and expand my woodshop and lay up a bunch of pine and start making coffins.
Whatever comes after I can probably handle.
Nirp and ban cash they better have the tanks in street first
If they ban cash the dollar will be utterly worthless as all fiat will be.
Tanks? Don't be daft. Nobody will give a shit about NIRP or cashless so long as they can buy cigs and booze.
I want more
Isn't this what we have now? The Fed Gov just keeps adding to the debt pile and keeps rolling it over - they'll never pay it down - it will expand forever. The fed buying government debt with a coupon payment that has to be reimbursed to the government is the same thing. Aint fiat wonderful? Maybe this will give gold and bicoin a boost.
"Get to ze chopper!"
Say it in your best Arnold voice for effect.
"will stay expanded permanently"
Damn I just splurted coffee all over my monitor laughing uncontrollably.
WHEN this happens,people will be trading thier "clunkers" for a loaf of day old bread.
So this is the best and brightest (the cream) our modern education systems have to offer.
We're all doomed!
FRN - it's so important and powerful God insists on having them fall from the sky.
I'll have to hear what Jim Cramer says about this latest proposal for infinite money printing before I can make up my mind about it.
So this might kill me down the road, but might , possibly, maybe, perhaps make me feel better today?
Ok, whatever you say Doc, you're the "expert"
I think they're all out of their FUCKING Minds!!
All these plans are idiotic. If the economy wants to keep growing at 2%, that is the real growth rate whether academics like it or not. There is no right to a 4%+ growth rate.
If they had let prices deflate and let bad debt go bad, the market could have cleared years ago and we could have had faster growth off the (lower) bottom. They didn't want to do that. Can't have your cake and eat it too.
Handing out money to people who have done nothing to earn it and who have created no value to exchange for it is not exactly a winning plan for creating value and/or real growth.
actually, the economy wants to decline sometimes whichis absolute sacrilege to these people
No one cares about slashing government spending anymore. That seems so old-fashoned.
GLOBAL DAY OF JUBILEE....
Obviously not for the SERFS - but for the game players.
A pre-fund, so 2004
The World's Economies are Slowly, Slowly, Twisting in The Wind.... (paraphrasing Erlichman one of Nixon's Henchman)
There's a plan, for curing ALL OF THIS!
(it involves stealing currency from nearby universes)
(totally legit)
http://iamsully.com/?p=5391
What is the point of monetizing more debt via helocopter? If they wanna go this route, just electronically credit the funds to the U.S. Treasury and spend. No need for debt, interest on debt, or the serfdom it brings for those still paying taxes.
This will be tyhe end game..the final attempt at survival...the Democrats will want all that money to go to Government employees...ne control them and vote for them..the Republicans will want it to go to corporations and to the people as tax reductions..so they can do with it what they want....but printing money..and will be the last battle for the dollar....and the USA for that matter...it will be very political but both sides will do it....money is power...
How much free goverment money am I entitled to exactly? Where's that dude with the question mark suit?
How much free goverment money am I entitled to exactly?
Since money is just "a promise to complete a trade", you are entitled to create all of it (i.e. trading promises) you can deliver on.
Default and you will have an interest load that will make you less competitive. Then, to the extent to which you are able to make trading promises, you need to put more effort into delivering because you have to deliver the interest load too.
On the positive side, your negotiation and trading is greatly simplified by guaranted zero inflation of the MOE itself. Thus, you need only be concerned about your trade. You don't have to worry about what the Fed and the money changer are doing ... because they won't be able to do anything.
As velocity of money globally continues to fall, conventional QEs have to become exponentially larger, as marginal benefit declines.
With a properly managed MOE process, "velocity of money" has no significance whatever. This is because money is itself created by traders and is in perpetual free supply. Savings doesn't affect it. Hoarding doesn't affect it. And velocity doesn't affect it. Those are all supply/demand balance aberrations of a flawed MOE management process.
With a properly managed MOE process, supply and demand for the MOE are in perpetual perfect balance. It's the nature of every trade.
It's amazing when one is getting paid $1 MM per year, with printed out of thin air money, the crazy feckin' ideas one can come up with to ensure that one continues to get paid $ 1MM per year.
Citi had to wait for 6 years and QE 1,2,3, before they could suggest that the Fed literally drop money from the helicopter dierctly onto the people this time. In 2008 to suggest this helicopter drop would have been deemed Robert Mugabe by the Media.
Things are going rather badly now, I'm afraid. I would not have thought so a while back but these days I'm wondering if we're headed for a complete shutdown of the global financial system and the collapse of the global economy forever.
No seriously, I'm watching for it.
wouldn't that be a good thing?
The banking industry is proposing to fund the government to create consumers. Selling product is now a problem of finance, not free enterprise.
By a perversion of order, using its power to create money out of nothing, finance is now America’s master of production and distribution. It owns the means of production. But in the process, having robbed America’s middle class of its purchasing power, it lacks consumers. Its massive EBT open-border welfare consumer base just wasn’t enough.
After destroying the economy and out of tools, Citigroup and Goldman are now proposing the government issue “scrip” for select consumers (conscripts) to buy in the stores of their partnering corporations.
In 1914, Henry Ford started an industrial revolution that helped build the U.S. middle class and the modern economy. Henry Ford created a consumer base that could afford his cars. The bankers have destroyed America's consumer base.
They aren't going to create a jobs program to funnel the money to the people through makework, like the WPA and the CCC during the last depression?
They really don't care about preserving the integrity of their slave narrative do they? Good.
No not work -- nobody wants to actually work -- just the money. Just cash, or debt offsets the turn into cash. A combination of huge tax relief, mortgage loan subsidies, permanent student loan deferrals, EBT debt card for everyone with a kid.
Just the money. Just cash.
What Citigroup is suggesting is fascism, using the government to run private industry, interest free, in a way that the controller of industry, Citigroup, can never fail.
Remove the Fed and there would be no need for a “central bank to outright endorse monetization of government debt.” There would be no debt.
Under the constitutional system established by America’s Founders, no private banks existed to rob the people. It was the people’s representatives, the Congress, not Citigroup, that was to regulate the issue and control of all money and credit.
Sheldon Emry in Billions for the Bankers, Debts for the People: The Real Story of the Money-Control over America, explains that debt-free and interest-free money was not only issued by Germany from 1935 to 1945 (accounting for its startling rise from the depression to a world power in five years), but the American colonies did it in the 1700s “with their wealth soon rivaling England’s." Abraham Lincoln did it in 1963 to help finance the Civil War.
Several Arab countries issue interest-free loans to their citizens today, according to Emry. The Saracen Empire “forbade interest on money for 1,000 years, and its wealth outshone even Saxon Europe. Mandarin China issued its own money, interest-free and debt-free, and historians and collectors of art today consider those centuries to be China’s time of greatest wealth, culture and peace."
Blame Hitler or whomever, but It’s banker usury levied on money and debt that causes the increase in prices and wages called “inflation, and it’s this “inflation” that forces American workers, savers and businesses to pay a large part of their life’s labor to the bankers.
Abraham Lincoln did it in 1963?
1863.
Rockin' post, printed out for future use.
News from 2009. Swell. Guys, it's already happened. We're already living with Krugman's trillion dollar coins. Or, equivalently, the Fed has declared itself a debt jubilee.
I didn't see anything in this article that says who the helicopter drops on, citizens or banksters. It *suggests* citizens but never quite says it. If it's banksters, then so what else is new. If it's "government" that's basically the same as banksters, real people will never see it. Has to be serious refundable tax credits - and better put some constraints on it or tax fraud will send a trillion dollars in bogus refunds to Russia and China.
If you want to fix things then set rates to 7% overnight. Deal with the fallout and you'll have a much healthier economy in a few year's time as people who are actually responsible with their money a.k.a. savers will start spending responsibly again
I understand what you are trying to say. What I think you really mean is that we should have a "Fair" interest rate that encourages both savings and responsible investment. This would be a "market" interest rate, not a government set rate, by definition.
I also do not think even the Fed could manage the fallout from trying to (overnight) instantly set rates at 7%. Complete financial chaos.
Yes,it would be.Sort of like Iceland a few years ago but it was amazing how quickly things adjusted because that is what people do. What happens is you have a quick increase in priorities for a time. All the chaff gets flushed and the staples of society start to build the foundation of a newer, healthier economy as we have a massive price rationalization.
Those that were misallocating capital to useless 'bling' will be wiped out and those that have their priorities focused on the building blocks of a healthy society will keep on going and begin to prosper and the faux competition, created by Fed excesses, that held them back will be gone
Creative destruction 101
I get that bypassing the banks with free money will save the banks. It will allow people to pay off debt with free money.
However, is it so bad to create a real value adding economy again that would allow independence from the banks? What is so absolutely horrible and unthinkable about that that it cannot be contemplated?
Why can we not have jobs and single wage earner families (that can actually survive on one paycheck) and family values? The bankers and other corrupt power whores have created a debt slavery system. How healthy is that for a society and a species?
We have trod a toxic trail, and are getting stupider.
The main enabler of sizable asset price bubbles is keeping the real price histories rarely seen; for example:
http://showrealhist.com/yTRIAL.html
This assertion is undisputed. The people are severely deceived by omission.
All I am personally interested in is finding out just what your true labour value is worth, nothing more. What can you provide for me on an equally sound basis that I can recompense in return. Just what are you actually really worth?
Not born to rule, related to the cunt who ruins my country on a generational basis, not there for total and personal gain on an almost guaranteed ticket of self preservation and inherited 'Meritocracy'. The ability to be so above the law, so immune to the laws that govern the 'Plebs', as to the point you can abuse and kill children because you were given the Dog given right by buying the legislative process of this cess pit of a shit hole hovel I call home, by birth right?
You really did think you were going to get away with it didnt you? Ask them NSA, GCHQ, ask them just what you defend, and uphold, go on. The complete waste of a human experience that lords it over us right now is related to QEII by blood, fucks dead pigs, and is a copious drug abuser, just like his towel folding mate who runs the mother fucking purse strings of this shithouse called 'England'. Ask them, including not just fucking kids, but you lot covering for them, how they, and then you, how you sleep at night.
I will, in my lifetime find out just what your current value is worth, labour, materials, surcharge, VAT, and final fix. And I am by no means the only one you bunch of satanist, filth inflicted on the face of man, you make a fucking mockery of people like me who only wants to do the very best by his fellow human friends.
Talk about victim of circumstance, you just happen to be in the right place, at the right mother fucking time. I aint violent by any means, but I would, for what you cunts have, and continue to do not just to me, but my two kids, I would honestly skin you all alive, every fucking one of you stains on the fabric of all that is good.
Rant the fuck off. Get them told NSA, GCHQ, there is a filthy storm of hatred brewing, and you cunts are right at the coal face.
Cunts, unspeakable filthy cunts, every last one of you bastards.
I applaud your politics, but dear, you really MUST do something about all that foul language. It makes people think that you lack the intelligence to use more sophisticated forms of derogatory verbiage. Remember, TACT is the ability to tell a man (or a sexual organ capable of discrete conscious action) to GO TO HELL -- and have him/her/it be HAPPY to be on his/her/its way. Points are scored when the poor fool doesn't realize what you've just called him/her/it.
You might also invest some time in learning the appropriate terms in other languages. I find Swearosaurus and The Alternative Dictionaries quite enlightening.
I was a single Dad and when raising my kids, I told them different than I was told...I was told I am not a Christian if I say fuck, damn, shit whatever...I told my kids that these words are great for a time when needed, just dont use them often and keep a good vocabulary......Well, I think under the circumstances, using fuck and cunts is appropriate for this situation...
Fucking cunts need to shit ass die....
Or, Those who are in control right now, are not being very nice to others because they are thinking more about themselves...
Fuck that, the fucking cunt ass shits need to die a fucking horrible death.
In Jesus name, Amen.
We have trod a toxic trail, and are getting stupider.
The main enabler of sizable asset price bubbles is keeping the real price histories rarely seen; for example:
http://showrealhist.com/yTRIAL.html
This assertion is undisputed. The people are severely deceived by omission.
Uruguay Does Unthinkable, Rejects Global Corporatocracy
The Treaty That Must Not Be NamedEarlier this month Uruguay’s government decided to end its participation in the secret negotiations of the Trade in Services Agreement (TISA). After months of intense pressure led by unions and other grassroots movements that culminated in a national general strike on the issue – the first of its kind around the globe – the Uruguayan President Tabare Vazquez bowed to public opinion and left the US-led trade agreement.
http://wolfstreet.com/2015/09/22/uruguay-does-unthinkable-rejects-global...
After all the buggery the US has committed in South America I am amazed they even have discussions with the US
TPTB are preparing us for Trumpwerks and gold-plated border crossing fences.
If you set the inflation rule, the government will just lie and say it's below 1.5% constantly. And it will always be a lagging indicator. And you will always have the bubble machine.
Weeeee.
one way they provide direct stimulus to taxpayers is to read inflation correctly. imagine that the government over reporting inflation.
Makes you wonder what is keeping them from just zeroing things out where they need to be, in order to keep the current scam going. Why all the money drama?
$50 for you and $50 million for the 1%'ers. Yeah that should work
just take it all off balance sheet who needs the Fed, they did it with the war in Iraq and congress barely raised an eyebrow