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A Stunning Admission From A BOE Central Banker: This Is What The Coming "Helicopter Money" Will Look Like
Back in early 2009, just around the time the Fed announced it would unleash QE1, we warned that any attempt to reflate the debt (a pathway which ultimately leads to hyperinflation as monetary paradrops are the only logical outcome as a result of the deflationary failure of the intermediate steps) would fail, and instead would saddle the world with even more debt, making monetary financing, i.e., paradropping money, the inevitable outcome.
We said that instead, the right move would be to liquidate the excess debt, and start anew - a step which, however, would wipe out trillions in (underwater) equity, something which the status quo would never agree to, as that is where the bulk of its wealth is contained.
7 years later, debt is well over $200 trillion, having risen by more than $60 trillion in the interim, and we are rapidly approaching the peak of the world's debt capacity as we noted a month ago in "The World Hits Its Credit Limit, And The Debt Market Is Starting To Realize That."
Today, we find that none other than Adair Turner, a member of the Bank of England's Financial Policy Committee and a Chairman of the Financial Services Authority, wrote a long essay in Bloomberg which admits everything we have warned about.
To wit:
Advanced economies' public debt on average increased by 34 percent of GDP between 2007 and 2014. More important, national incomes and living standards in many countries are 10 percent or more below where they could have been, and are likely to remain there in perpetuity.
The fundamental problem is that modern financial systems inevitably create debt in excessive quantities. The debt they create doesn't finance new capital investment but the purchase of existing assets, and above all real estate. Debt drives booms and financial busts. And it is a debt overhang from the last boom that explains why recovery from the 2007–2008 crisis has been so anemic.
... debt contracts also have adverse consequences: They're likely to be created in excessive quantities. And the more debt an economy assumes, the less stable that economy will be. The dangers of excessive debt creation are magnified by the existence of banks and the predominance of certain kinds of lending. Almost any economics or finance textbook will describe how banks take money from savers and lend it to borrowers, allocating money among investment options.
At the core of financial instability in modern economies lies this interaction between the infinite capacity of banks to create new credit, money and purchasing power, and the scarce supply of urban land. Self-reinforcing cycles of boom and bust are the inevitable result.
His punchline: "unless tightly constrained by public policy, banks make economies unstable."
If central banks increased interest rates to slow the credit growth, standard economic theory said lower real growth would result. The same pattern and the same policy assumptions can now be seen in many emerging economies, including China: Each year, credit grows faster than GDP so that leverage rises and credit growth drives economies forward.
And then this:
But if that is really true, we face a severe dilemma. We seem to need credit to grow faster than GDP to keep economies growing at a reasonable rate, which leads inevitably to crisis, recession and debt overhang. We seem condemned to instability in an economy incapable of balanced growth with stable leverage.
Hmm, this sounds exactly like what we said in 2010: "Why The Staggering U.S. Debt Load Is Sure To Prevent Economic Growth." But what does a fringe, tin-foil blog know.
So, yes, the very top echelon of central bankers finally admits what we have said all along: creating excess debt creates asset bubbles, slows down growth, recurring crises and leads to even more "unconventional", and taxpayer funded systemic bailouts.
Hardly a surprise.
What does Turner recommend?
For the answer we have to go back to what he said yesterday in an IMF paper titled "The Case for Monetary Finance – An Essentially Political Issue." But before going into it, here is what the WSJ reported the IMF new chief economist, Maurice Obstefld, said:
“I worry about deflation globally,” new IMF Economic Counselor Maurice Obstfeld said in an interview ahead of an annual IMF research conference that focuses this year on unconventional monetary policies and exchange rate regimes. “It may be time to start thinking outside the box.”
Weak—and in some cases falling—price growth has plagued Japan, Europe, the U.S. and other major economies since the financial crisis. Plummeting commodity prices are exacerbating the so-called “lowflation” and deflation problems that curb investment, spending and growth.
Surveying several dozen of the largest economies around the world, Mr. Obstfeld said the number of countries experiencing low inflation is rising. Combined with slowing emerging market output, ballooning government debt and monetary policy constrained by the lower limits of interest rates, the deflation risk is fueling fears the global economy could be fast stuck into a deep low-growth mire.
Yes, this comes as the Fed is desperately pushing for a rate hike, just so it can telegraph that "things are better than they seem." It remains to be seen how successful this experiment will be: we know that every single country that has been at ZIRP or below, and has tried to hike rates, has promptly failed most notably the case of Japan in August 2000 when it, too, hiked by 25 bps from 0% only to lower 7 months later.
Which brings us back to Adair Turner, and his note on "monetary financing." This is what he says:
“Monetary finance” is defined as running a fiscal deficit (or a higher deficit than would otherwise be the case) which is not financed by the issue of interest-bearing debt, but by an increase in the monetary base – i.e. of the irredeemable fiat non-interest-bearing monetary liabilities of the government/central bank.
The easiest way to think about this is in terms of Friedman’s “helicopter money”, [Friedman, M. 1960] with the government printing dollar bills and then using them to make a lump-sum payment to citizens.
But in modern reality:
- It could involve either a tax cut or a public expenditure increase which would not otherwise occur.
- It can be one-off or repeated over time.
- And it would typically involve the creation of additional deposit rather than paper money. This would be initially in the form of deposit money in the government’s own current accounts which would then be transferred into private deposit accounts either as a tax cut or through additional public expenditure.
And the punchline: this is what the upcoming monetary paradrop will look like:
There are a number of ways in which the money could be “created” with different precise implications for the central bank balance sheet. They include:
- The central bank directly credits the government current account (held either at the central bank itself or at a commercial bank) and records as an asset a non-interest-bearing non-redeemable “due from government” receivable
- The government issues interest-bearing debt which the central bank purchases and which is then converted to a non-interest-bearing non-redeemable “due from government” asset
- The government issues interest-bearing debt, which the central bank purchases , holds and perpetually rolls over (buying new government debt whenever the government repays old debt), returning to the government as profit the interest income it receives from the government. In this case the central bank must also credibly commit in advance to this perpetual rollover.
But the choice between these different precise mechanisms has no substantive economic consequences, since in all cases:
- The consolidated balance sheet of the government and central bank together is the same.
- The monetary base of irredeemable non-interest-bearing money is increased
- And the government is thus able to cut taxes or increase expenditure without incurring any future liability to pay more interest, or to redeem the capital value of the money created.
And so on: there is more in the paper which we suggest everybody reads as it lays out precisely what will happen once the next attempt to reflate fails.
What is more disturbing, is that this is now effectively policy: with this paper by one of the most respected economists among the intellectual oligarchy, which expressly endorses "monetary financing" it is just a matter of time before it goes from theory to practice, first in Japan within the next five years. Quote Turner:
Monetary finance in today’s economic circumstances. I argue that monetary finance should be an available policy tool, and that in at least one country – Japan - it not only should be but inevitably will be used within the next five years.
First in Japan, then everywhere else and... on a "continuous basis."
I also consider whether money finance should be used only as an emergency measure in the face of a post-crisis debt overhang, or whether, faced with possible secular stagnation, we will have to use it on a continuous basis.
So the blueprint for what is coming has now been laid out and only those who willingly refuse to see what is before them, will be surprised when "monetary financing" is finally unveiled.
In conclusion we go back to Turner's op-ed in Bloomberg from this morning in which he says:
Many people are legitimately angry that few bankers have been punished. Some were incompetent, others dishonest. Yet they were not a fundamental driver of the crisis any more than the misbehavior of individual financiers in 1920s America caused the Great Depression.
The hypocrisy is astounding: in one paper Turner promotes a policy that will perpetuate, and reward, the banking status quo, and in another letter he urges punishment for the very same bankers who will benefit the most from having robbed the middle class for the past 7 years thanks to policies enacted by people like him!
The sad truth, however, is that after reading the above, one barely even has the energy to feel disgust.
But perhaps just to help spark if not disgust then a little bit of anger, we will conclude with the quote used by Turner at the very top of his paper which confirms that at least one person knew how it was all going to end a long time ago:
“Consider for example a tax cut for households and businesses that is explicitly coupled with incremental Bank of Japan purchases of government debt – so that the tax cut is in effect financed by money creation”
Ben Bernanke, Some Thoughts on Monetary Policy in Japan, 2003
* * *
Source: The Case for Monetary Finance – An Essentially Political Issue.
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show me the helicopter !
YOU will not see the helicopter. Like I've said since the very first time this issue came up, the helicopter will only drop money on Washington DC. Why should we rely on individuals when everyone agrees the government has greater wisdom how that money should rightly be spent?
Welcome to hell, by the way. You think cronyism, welfare/warfare politics and police state tactics are bad now? You ain't seen NOTHIN' yet. People will be renouncing their citizenship to move to North Korea.
Shit, I was wondering whether one of my big fishing nets would work or if I would have to get something else for the big drop. Are they announcing the times for the drop?
They really should take control of the central bank outside the hands of uncrupulous politicians and put it under the control of the private sector who are clearly much more responsible and subject to the firm control of the market.
Hmm....so the adrenline injection ( fiscal deficit ) and the defibrilator paddles ( NIRP, QE ) aren't enough. We need a lighting bolt right to the dick ( Moneitization ) for growth.
Has monetization ever been tried before? Did it work? How are those civilizations/societes doing now? We are fucked. Humanity can not learn from the past if it involves pain in the present.
verily I say unto you...a quick bout of hyperinflation will fix all this shit. Yes it will destroy the illusion of wealth but in truth the wealth will still be there. We will just have to figure out a better way to account for it.
Wealth, get you some while it is on sale.
~"“It may be time to start thinking outside the box.”
How about this:
1.) Cut the size of government by 50%.
2.) Let insolvent backs go out of business.
3.) Make federal/state balanced budgets mandatory everywhere forever.
4.) Prosecute financial crimes of bankers as crimes against humanity with commensurate prison/capital punishment terms.
5.) convert all existing federal/state debt to gold backed bonds.
6.) Devalue the currency to make #5 possible and then convert to a new currency (non Euro, non US$) that is gold-backed.
7.) Peg currency to historical 16:1 silver to gold ratio.
Okay, the last one is for me. I have a heck of a lot more silver the gold. I don't think it will hurt gold as much as it will help silver. I mean really, 75:1 these days? Yer' killin' me here!
#5 - convert worthless debt to gold-backed bonds.... so where does the gold come from? Oh, the issue more debt to buy some? idjit
NoDebt, I disagree, and would write your point differently: "You will see the breadcrumbs of this". then those who don't care about taxes still care about things like smartphones
about this list, pardon my probably butchered, ignorant attempt from afar, but as far as I understand the traduction into Democraticanese and Republicanese would be like this:
1) cut military spending in half - cut social spending in half
2) let your friends, the corporations that supported you go bust - let your friends, the public oligarchs that supported you go bust
3) copy the EU approach, don't mind that it's not working perfectly, yet. with an entity that never existed before - make seriously hard decisions
4) prosecute your friends - prosecute your friends
already those 4 points look at me, when translated, a bit... hard to sell to core constituencies and common opinion of the two US parties
Translation -- this will go on a lot longer than any of us can imagine, and it will be the last bubble of this economic system.
Yes, because this time around we have a global market, hence GLOBAL WEIMAR.
There is an infinite supply of binary numbers, and Debt can always be graphed on a semi-log scale (for the MSM and sheeple). Plan accordingly.
I.e. All you need to worry about is...
1. Keep your Revenue Streams coming (job, biz, Gov, investments...)
2. Have your finances in firm control: Budget, min. debt, live modestly
3. Be Resilient at home: Well-maintained home, in a safe area with decent climate; stocked with Stuff Of Life (Foods, H2O source+filtration, Toiletries, Tools, G&A), have Sources of Energy (Heat: coal, gas, wood. Electricity: solar, water, wind)
4. Have a sensible mix of Primary, Secondary and Tertiary assets -- located in 2 or more countries, if possible.
5. A solid network of Family, Friends and Tribesmen -- united in a Common Cause (that is not dictated by the High Priests/Priestesses on TV).Don't forget to Live, Laugh, Love. And Forgive, inasmuch as Quid Pro Quo justice allows.
You forgot....learn to brew beer and ferment wine.
Very essential items indeed....
This is what happens when you threaten to move your company overseas https://www.washingtonpost.com/news/checkpoint/wp/2015/11/06/boeing-protests-northrops-win-of-long-range-strike-bomber-contract/
At least we can now bring global stealth qe to those terrorist markets.
We had helicopter money twice under the Bush administration in the form of rebate checks. The problem with that approach is that ist was a one off and once people bought their flat screen teevee they were out of money to spend. If the really want to create some inflation they need a constant stream of fiat going to the proles.
"I also consider whether money finance should be used only as an emergency measure in the face of a post-crisis debt overhang, or whether, faced with possible secular stagnation, we will have to use it on a continuous basis."
I think the two of you are in agreement, Tyler.
5 years??? No way they make it that far.
I heard an interesting idea to eliminate income taxes for people that have children. I think that in the long run that might actually be a solution. After all people are the drivers of all economic growth and right now we have a shortage of people being born. People are the producers, people are the consumers and people are the innovators. Bottom line if you want your economy to grow you must have a growing population. Immigration helps but how many unskilled people do you really need in a age where robotics is going to rapidly make them obsolete. Make no mistake debt based money needs to go as well.
Well I have two kids for sale if that ever comes about. I have 3 but I have to keep one for the tax rebate. Man those Muslims will make a killing ;o)
"I heard an interesting idea to eliminate income taxes for people that have children. I think that in the long run that might actually be a solution."
Bad idea. The World needs to downsize the population. Too many people consuming a dwindling supply of natural resources. Second most of the people having children will end up collecting wealthfare and other resources. Producers with out child pay taxes since they focus more time on making money then raising children
WTF - Helicopter money in Japan in the next 5years? Wow this thing aint tomorrow then?
North America and Europe need to increase population, though. If the world needs to downsize, then Africa, the Middle East, and Asia should be forced to.
The childless are already the drone worker bees for those with children. No need to rub even more salt in the wounds. There's several reasons why there is a "shortage of people being born". I've got no interest in providing slaves for the boss's kids. His kids will have to do their own dirty work.
"Oh, there's a shortage of people but we're all destroying the environment." If I was dumb enough to have kids, I'd like them to grow up in an environment where, if they choose, then can all drive around in five litre V8s without the rest of the world making them feel guilty for being alive. Not possible? Then fuck off. Do your own filthy work. Stop expecting me or my offspring to be your slave.
Yep, I read that. I'm simply illustrating the fact that history shows us the one-off approach doesn't work.
Sold to the proles as "basic income". Already in play.
hence ZIRP, get the goverments issue negative rate bonds to prevent their debt to GDP ratio to skyrocket.
This is NOT what happened! Stop lying you piece of walking garbage. The Bush's rebates went to payoff DEBT!!!
Mine did.
Yeah, that's what happened. People paid off debt. And those people that paid off debt, what exactly did they do with their new buying power?
Spend it on the food that became much more expensive at the supermarket.
"This is NOT what happened! Stop lying you piece of walking garbage. The Bush's rebates went to payoff DEBT!!!"
Consider that one man's debt paydown was a collective gov't increase since the gov't debt went up since the gov't didn't cut spending to afford the tax cuts. Overall the debt increased even if some people used the tax cuts to paydown debt. In many instances, people use the tax refunds for a home downpayment that helped fuel the housing bubble.
That said I wholy endorse tax cuts!
I remember the time around 2002, the $600 smackers they were kind enough to give me back. I also remember telling my ex-wife that this is the beginning of the end if they have to go to these lengths to save "capitalism".
WTF are they going to do this time? I could use the cash to buy some Au, Ag and Pb. Uncle Sam Santa Claus or is that too soon?
I used that $600 from the shrub to buy my first handgun (CZ75) and 30 ASEs.
Terroristic activity, I know.
Yeah I remember that, but then the following year it had to be claimed on one's taxes, thereby nullifying the whole usefulness of the whole idea, at least for the proles & their new flat screens anyway...
"Yeah I remember that, but then the following year it had to be claimed on one's taxes, thereby nullifying the whole usefulness of the whole idea, at least for the proles & their new flat screens anyway"
Bush got congress to reduce the tax rates. Between 2001 and 2009, Fed Taxes were the lowest in 40 years. Taxes started increasing in 2010, as Barry's agenda's began to kick in. In 2013 the marginal rates on Fed. Income tax when up, and Obamacare also kicked in.
Kind of like eating your own crap and repeating. At some point you will die.
RadioFlyer : "Kind of like eating your own crap and repeating. At some point you will die."
Not before you eat a lot of shit.
Human centipede. Look it up. That's what banks are.
Perhaps this is the diet the TPTB, politicians and bankers need...
have another Crap Sandwich Mr. Gore. Yes, today it is dried crap patties with a freshie in the middle. Enjoy! Enjoy!
F, my head is going to "blowed up real good"
Why should there be taxes at all, on anything, if they can just print?
Sensible explanation here:
http://www.321gold.com/editorials/saville/saville110415.html
Short version: because then everyone would see through the scam that is at the heart of fiat money.
The tax creates the incentive (or threat rather) for people to earn the fiat instead of real money.
Yeah we're fucked
Or central banks could let fails actually fail and prevent their poor genetics from being passed on to the human race.
Nah, forget that idea. Let's all be dodo birds instead.
“I worry about deflation globally,” new IMF Economic Counselor Maurice Obstfeld said in an interview ahead of an annual IMF research conference that focuses this year on unconventional monetary policies and exchange rate regimes. “It may be time to start thinking outside the box.”
OK, thinking outside the box. Don't hate deflation, love deflation. Just as with inflation, costs will decrease faster than wages decrease. Write off the bad debts on personally owned houses, cars and credit cards and foreclose on hedge funds and Wall Street banks.
Problem solved.
I'm no PHuD Ekonomiss, but I sorta feel like this isn't going to help the likes of most of us.
No one wants to get knee capped, but as long as the "elite" get their heads chopped off I'll take one knee cap for the team.
#kneelivesmatter
Why is there a private "bank" in total control of government funding?
Official reason? Everyone knows you can't trust govts. To stop the money supply from being at the mercy of politics. Ummmmmm, how did that work out in the real world? Gee, whoever thought that perhaps, maybe that private "bank" didn't have our best interests at heart after all?
"Get to da choppa!"
.
Guess what? This won't work either. It is just a plan for more purposeful capital misallocation. Value is created by education, new ideas, innovation, savings, investment and hard work. It is not created by debt, debasing the money supply, changing the rules all the time and destroying property rights no matter what these guys believe.
WTF are you? A terrorist or something?
Just makes one sad. They continue on the wrong path even as it has proven ineffectual. Economics professors should not be in charge.
I could pimp your moms ass for 300 bucks a year. That wont even stimulate old bushys limp ass dick. With taxes you will have to sell your car to get the check. muriKKKa !!!!!!!
Where's the helicopter? This is just the same stuff they have been doing for a long time to fund (control) the goobermint. How is any of this getting to the people?
well it does go to some people, See you just dont get it. They are goint to direct inject it to the .01 traitors until they cant hold another cent. Then they are going to send them out amongst the masses and they are going to puke out the money and people are going to worship them like gods. YOU PEOPLE JUST DONT GET IT !!!!!
"“Consider for example a tax cut for households and businesses...."
Funny that. They want you to WORK HARDER so you would incur more taxes which they might lower a point or two. They are parasitic. They make money off of your productivity. They skim. It's a win x 2 for them, they make money off your increased productivity and then they still make money off of your slave tax. They produce absolutely nothing of value.
The true issue of our times is slavery. As it always has been.
Please excuse my ignorance but isn't this exactly what has been going on for years now?
This is a common technique these days. They "admit" they might need to start doing something they've been doing all along. This is how bullshit fuckwittery is shmoozed into public acceptance. For another example, see the see-sawing "national debt" figure which is barely reported at all these days.
pulled this little gem out the the ZH link provided by Tyler.......from trav7777
''The housing bubble was a necessary artifact of an economy which had long since run out of core economicalness. When real production doesn't generate sufficient returns, you resort to pyramiding leverage and synthetic economics.
The reality is that our debt/GDP is far worse because most of that GDP for the past 10 years was complete bullshit. It was nominal or transaction GDP.
If you originated a ton of mortgages, you have GDP. Then if you tranche them up with some leverage in a CDO, you have more GDP. Sell the paper, GDP. Retranche the tranches into a CDO^2 with more leverage, even more GDP. Originate a CDS and tranche the payments streams, more GDP. But this shit is all fake, it is not production. It's just credit origination and transactional volume, not real things getting made or built. It's a synthetic economy.''
http://www.zerohedge.com/article/why-staggering-us-debt-load-sure-preven...
I miss Trav7777
Nothing new here. Economies are created by trade, not by money creation. What is happening is the slow suffocation of government.
Without lending, and thus expanding money in circulation, it become harder to finance long term debt. And if the government simply inflates, they create excessive regulations which only serve to choke the economy and empower idiotic bureaucratic government agencies and with technology they cannot keep up. What we are witnessing is the beginning of the end of what has become know as the state.
Blah blah blah...
Such "let the majority eat cake" monetary experiments have been done before. this one will not end until the bankers and financiers lose their fucking heads.
same as it ever was...
OT: Went down to Ye Olde Coin Shoppe this morning and bought Eagles @ $65 over 1088 spot. My first purchase since dip below $800 almost exactly 7 yrs ago (which brings average up to mid-$600s). They only had TWO coins in inventory! Let's hurry up and get that rate rise over with so AU can seriously start north again. ;-)
Wowser, these guys really cut me up now that they've brought main street to the point of collapse and caused unimaginable suffering and death around this planet. Did ya catch the fallacie of bankers lending depositors cash to borrowers? Anyway this is much in line with Steve Keen's thoughts except it doesn't go far enough demanding helicopter money be used to pay down debt by those in debt. Personally why not just get rid of the middle man, the central bank, and be done with it. Of course handing this type of monetary power over to government is a very very bad idea....a separate public institution,shares owned by the people, operating with full transparency and total disclosure, would ensure stabilty of the money and its quantity-supply as no private for profit central bank like the Fed or BoE has ever done. There will still be needed some hangings and lengthy jail terms though and vast redistribution of the ill gotten gains in the form of inescapable taxes on the rich...handing this helicopter money over to government will mean the oligarchy still has control over where and who will receive their benedictions. Revolution may still be needed to sort this mess out of who controls scoiety.
Of course handing this type of monetary power over to government is a very very bad idea.
Leaving aside the naivete of the thought that any power is off limits to "government", or that someone is needed to "hand it over" in the first place, the US Constitution requires that the Congress shall have the power to coin money. All the rest of the bullshit is a creation of the scheming aristocrats, and which we can do without entirely.
The Constitution's most egregious flaw was that it allowed for the creation of a monoply on "money", which was destined to be seized by a small group of control freaks from the moment it was conceived.
EBTs for everyone...
I'm long on wheelbarrows.
You see a net extraction of taxes amounting to 21 billion euro in Ireland last year.
The bankers never give you the money to purchase existing capacity, this creates a incentive to build more and more stuff as the present stuff is in artifical scarciy
That is why we live in such a overbuilt world with all its real costs (depreciation)
.
T
If its being said out in the open...it's already been implemented.
Phucket
So, is PPT manipulation part of thinking outside the box? No matter what the Powers That Be propose it will all end the same way, Better it ends soon so that I can at least help my family cope - cause any solutions " ain't gonna be pretty".
What is happening in Europe and America is a creation of state protected monopolies.
This is exactly what Larry Summers did in post Soviet Russia in the creation of the "oligarchs."
Same is true in China/Asia where the SOEs do the work for the state and hence have a monopoly.
It's great for the top 0.01% and everyone else just reads about it in the paper and shows up on line on Shoe Day.
Just in the same way everyone turned Japanese in the 1980's all those Ivy Leagers want to go China, Inc - full fascist retard.
Obamacare is a model test case on how to NOT do it, yet it institutionalized middle man insurance into a private tax upon everyone's paychecks.
That is a truly awesome corporate coup.
You will see two companies get the market for; electric cars, power-plants, solar energy, internet/ISP, etc.
This is why systems like TPP are being enacted. The winners of the future need a global Constitution to function - an agreement to stay in power.
If anyone thought it was important to save the economy and citizens, then the banks would be seized, their assets (debt holdings) discounted and liquidated.
Debt IS slavery which keeps things running just fine.
BTW, after the point where ZH pats itself on the back and says remember we said this? Remember we told you so? That is when ZH mentioned, tongue in cheek, being a 'fringe tin-foil blog.' Well, the sentence should have read; 'What does an Entertaining Fringe tin-foil Blog know?'
What tinfoil shithole do you come from?
Hey derp head. 39 weeks huh? Keep trollin dufus...
That will be pay rises and bonuses all round then for those in the highest echelons of power now they have finally gained control of the money tree.
Poor sheep at the bottom will get nothing, so the gape between rich and ppor grows ever wider until one day the gap being so big, the poor with so little have no choice but to revolt. Might not be today but is growing and as erach year passes that sentiment will grow.
Can't stand my government now, just corrupt liars and thieves.
A true thief is kind of honest, you know he will steal from you so you are on your guard. The likes of Turner and rest deceive so you can never be on your guard and keeps you poor for all perpetuity and at that point I rate the integrioty of the thief above this kind of lowlife.
Now if Turner admitted mankinds productive capabilty is so large now we don't need half the population to work at all to provide everything then his concept of having to create money actually makes sense. Although he cannot admit it because that would be like admitting the current economic system can never work and it will as it is only ever get worse.
The world currency and financial system is in unprecedented trouble, because the unrestrained growth of credit makes inevitable the unrestrained collapse of credit.
The scale of the problem exists because the world monetary authorities took the unprecedented step of removing the world currency system's only non-credit, commodity backing 45 years ago.
Without such backing there is no numeraire to define the lower-bound value for deflating assets.
The solution is simple.
It is sad to call it 'out of the box' thinking.
You must replace that which was removed.
The world's monetary system requires a numeraire that is not based on credit, which is to say, is a commodity.
The downside of the impending economic dislocations will be limited only to the degree that responsible governments and central bankers find the courage to revalue their currencies in terms of that numeraire, such that a core of economic activity can be preserved through inevitable collapses in unsustainable credit.
Ahem .. I have posted for weeks that the Fed will raise .25% in DEC and simulatneously engage in QP (Quantitative printing). No need to actually buy fetid bonds or MBS off of Banks balance sheets for higher prices, that gets messy and people no realize that it just enriches the neo Bolshevik bankers.
Janet and Bank of Isreal offcial who is her Vice Chair, will literally print usd and insert it electronically into bank accounts. Sort of a Hunger games type of theme where random people all of a sudden find $100,000 in their accounts but are told not to tell anyone less they could forfeit it. It will be some hair brain sxcheme such as that..... and it will come around the Jan 2016.
Fuck QE ! ... iTS TIME FOR QP Bitches !
The inevitable asymptote of global monetary/fiscal/economic/financial/reproductive/immigration policies is continuous decline into mayhem, mediocrity and collapse of all systems.
However, that could take generations, not just decades, due to the slow pace and may tricks, gimmicks, and schemes that regimes employ to keep the circus going, eg QE, ZIRP, NIRP, etc.
Until that inevitable day of collapse comes, most of us still need to earn INCOME to pay living expenses, not just buy some inert stuff in a desperate attempt to span the intervening years with some kind of value preserver.
So the challenge for investors is what to invest in today to provide income while also preserving capital ?
If it truly comes to this point, I have absolutely no doubt that Bush's tax refund to the people will be quintupled. Unless of course you owe the IRS :-}. Federal debt to infinity !!! But hey-- its only my grandchildren.
This is all going to end very badly and very suddenly. When it does, if you listen carefully, you will hear the roar of artillery and the rumble of tank tracks in the distance.
I'd be much less upset if I thought for a minute Uncle Sugar planned to actually print pallets of Franklins and give them away to people who weren't terrorists.
But that won't happen. Uncle Sugar will still be taxing every hair on the ass of anybody who still has an honest job. No national dividend for you.
Some day the global government will give us money, tell us how to spend it, and only allow us to operate within safe parameters to protect the system. Life will be heavily controlled. We'll still be in a state of perpetual crisis, but that's a given otherwise the little people would ask questions.
(Unless the little people manage to beat the government and bankers before they can amass that much power, but I doubt things will just collapse some day without a fight.)
https://www.youtube.com/watch?v=hmMSmKO1U-8
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["One reason the economy is represented as hollow is because the economy loses its capability to make goods that are no longer needed–such as buggy whips and rotary dial phones. Another reason why it might be represented as hollow is because debt is used to “puff it up” to its current size. Once the amount of debt starts shrinking, it makes it very difficult for the economy to maintain its stability."]
-- G. Tveberg (Our Finite World)
Probably there is a 'glitch' in the derivatives amrket and all of a sudden...no one will take dollars...the helicopter drop will be a disposal effort not for replenishment.
Hyperinflation will be fun...promise...
The US actually had some of this kind of money from the time of the civil war. They were called "greenbacks" or more formally "United States Notes," backed by the full faith and credit of the United States. They remained in circulation (mostly two-dollar bills) up to the 1950's. The statements of the Federal Reserve referred to them as "treasury currency." Under the same designation, the treasury issued Silver Certificates, payable in silver on demand. These also remained in circulation up to the 50's. Kennedy threatened to revive them when he had conflicts with Fed policy.