It Begins: Desperate Finland Set To Unleash Helicopter Money Drop To All Citizens

Tyler Durden's picture

With Citi's chief economist proclaiming "only helicopter money can save the world now," and the Bank of England pre-empting paradropping money concerns, it appears that Australia's largest investment bank's forecast that money-drops were 12-18 months away was too conservative.

Over the last few months, in a prime example of currency failure and euro-defenders' narratives, Finland has been sliding deeper into depression. Almost 7 years into the the current global expansion, Finland's GDP is 6pc below its previous peak. As The Telegraph reports, this is a deeper and more protracted slump than the post-Soviet crash of the early 1990s, or the Great Depression of the 1930s. And so, having tried it all, Finnish authorities are preparing to unleash "helicopter money" to save their nation by giving every citizen a tax-free payout of around $900 each month!

Just over two years ago, when the world was deciding who would be Bernanke Fed Chair replacement, Larry Summers or Janet Yellen (how ironic that Larry Summers did not get the nod just because a bunch of progressive economists thought he would not be dovish enough) we wrote about a different problem: with the end of QE3 upcoming and with the inevitable failure of the economy to reignite (again), we warned that there remains one option after (when not if) QE fails to stimulate growth: helicopter money.

While QE may be ending, it certainly does not mean that the Fed is halting its effort to "boost" the economy. In fact... the end of QE may well be simply a redirection, whereby the broken monetary pathway, one which uses banks as intermediaries to stimulate inflation (supposedly a failure according to the economist mainstream), i.e., "second-round effects", is bypassed entirely and replaced with Plan Z, aka "Helicopter Money" mentioned previously as an all too real monetary policy option by none other than Milton Friedman and one Ben Bernanke. This is also known as the nuclear option.

Today Finland needs the nuclear option. As The Telegraph explained, nobody can accuse Finland of being spendthrift, or undisciplined, or technologically backward, or corrupt, or captive of an entrenched oligarchy, the sort of accusations levelled against the Greco-Latins.

The country's public debt is 62pc of GDP, lower than in Germany. Finland has long been held up as the EMU poster child of austerity, grit, and super-flexibility, the one member of the periphery that supposedly did its homework before joining monetary union and could therefore roll with the punches.



Finland tops the EU in the World Economic Forum’s index of global competitiveness. It comes 1st in the entire world for primary schools, higher education and training, innovation, property rights, intellectual property protection, its legal framework and reliability, anti-monopoly policies, university R&D links, availability of latest technologies, as well as scientists and engineers.


Its near-perfect profile demolishes the central claim of the German finance ministry - through its mouthpiece in Brussels - that countries get into bad trouble in EMU only if they drag their feet on reform and spend too much.


The country has obviously been hit by a series of asymmetric shocks: the collapse of its hi-tech champion Nokia, the slump in forestry and commodity prices, and the recession in Russia.


The relevant point is that it cannot now defend itself. Finland is trapped by a fixed exchange rate and by the fiscal straightjacket of the Stability Pact, a lawyers' construct that was never intended for such circumstances. The Pact is being enforced anyway because rules are rules and because leaders in the Teutonic bloc have an idee fixee that moral hazard will run rampant if any country in the EMU core sets a bad example.


Finland's output shrank a further 0.6pc in the third quarter and the country's three-year long recession is turning into a fourth year. Industrial orders fell 31pc in September. "It's spooky," said Pasi Sorjonen from Nordea.

Finland is digging itself into an ever deeper hole. The International Monetary Fund warned this week against austerity overkill and “pro-cyclical” cuts before the economy is strong enough to take it.

The IMF spoke softly but the message was clear. Finland should not even be thinking of a “front-loaded” fiscal contraction or slashing investment at a time when its output gap is 3.2pc of GDP.


The Finnish authorities admitted in their reply to the IMF's Article IV report that they had no choice because they had to comply with the Stability Pact. This is what European policy-making has come to.


Some in Finland were quick to throw stones at Greece during the debt crisis, seemingly unaware at the time that they too lived in a glass house. Their own story is not really that different from the EMU disasters that unfolded in the South.




Interest rates were too low for Finland’s needs during the commodity boom, causing the economy to overheat. Unit labour costs spiralled up 20pc from 2006 onwards, leaving the country high and dry when the music stopped. Public debt was low but private debt was high (somewhat like Spain and Ireland). The crisis hit later merely because the commodity bubble did not burst until 2012.


Sweden was able to navigate similar shocks by letting its currency take the strain at key moments over the last decade. Swedish GDP is now 8pc above its pre-Lehman level.



The divergence between Finland and Sweden is staggering for two Nordic economies with so much in common, and it has rekindled Finland’s dormant anti-euro movement.

And that 'political' crisis may have been just the kick the authorities needed to unleash the nuclear money drop option, as The Telegraph continues,

Authorities in Finland are considering giving every citizen a tax-free payout of €800 ($900) each month.


Under proposals being draw up by the Finnish Social Insurance Institution (Kela), this national basic income would replace all other benefit payments, and would be paid to all adults regardless of whether or not they receive any other income.


Unemployment in Finland is currently at record levels, and the basic income is intended to encourage more people back to work. At present, many unemployed people would be worse off if they took on low-paid temporary jobs due to loss of welfare payments.


Detractors caution that a basic income would remove people's incentive to work and lead to higher unemployment. Those in favour point to previous experiments where a basic income has been successfully trialed.




Finnish Prime Minister Juha Sipilä supports the idea, saying: “For me, a basic income means simplifying the social security system.”


The basic income will cost Finland roughly €46.7 billion per year if fully implemented. Kela's proposals are due to be submitted in November 2016.

That's around 20% of GDP annually... and while politicians will claim it is temporary, these 'initiatives' never are - just ask Japan!

*  *  *

As we previously detailed, support is growing around the world for such spending to be funded by “People’s QE.” The idea behind “People’s QE” is that central banks would directly fund government spending… and even inject money directly into household bank accounts, if need be. And the idea is catching on.

Already the European Central Bank is buying bonds of the European Investment Bank, an E.U. institution that finances infrastructure projects. And the new leader of Britain’s Labor Party, Jeremy Corbyn, is backing a British version of this scheme.


That’s the monster coming to towns and villages near you! Call it “overt monetary financing.” Call it “money from helicopters.” Call in “insane.” 


But it won’t be unpopular. Who will protest when the feds begin handing our money to “mid- and low-income households”?

Simply put, The Keynesian Endgame is here... as  the only way to avoid secular stagnation (which, for the uninitiated, is just another complicated-sounding, economist buzzword for the more colloquial “everything grinds to a halt”) is for central bankers to call in the Krugman Kraken and go full-Keynes.

Rather than buying assets, central banks drop money on the street. Or even better, in a more modern and civilised fashion, credit our bank accounts! That, after all, may be more effective than buying assets, and would not imply the same transfer of wealth as previous or current forms of QE. Indeed, ‘helicopter money’ can be seen as permanent QE, where the central bank commits to making the increase in the monetary base permanent.


Again, crediting accounts does not guarantee that money will be spent – in contrast to monetary financing where the newly created cash can be used for fiscal spending. And in many cases, such policy would actually imply fiscal policy, as most central banks cannot conduct helicopter money operations on their own.




So again, the thing to realize here is that this has moved well beyond the theoretical and it's not entirely clear that most people understand how completely absurd this has become (and this isn't necessarily a specific critique of SocGen by the way, it's just an honest look at what's going on). At the risk of violating every semblance of capital market analysis decorum, allow us to just say that this is pure, unadulterated insanity. There's not even any humor in it anymore.


You cannot simply print a piece of paper, sell it to yourself, and then use the virtual pieces of paper you just printed to buy your piece of paper to stimulate the economy. There's no credibility in that whatsoever, and we don't mean that in the somewhat academic language that everyone is now employing on the way to criticizing the Fed, the ECB, and the BoJ.

And it will end only one way...

The monetizing of state debt by the central bank is the engine of helicopter money. When the central state issues $1 trillion in bonds and drops the money into household bank accounts, the central bank buys the new bonds and promptly buries them in the bank's balance sheet as an asset.


The Japanese model is to lower interest rates to the point that the cost of issuing new sovereign debt is reduced to near-zero. Until, of course, the sovereign debt piles up into a mountain so vast that servicing the interest absorbs 40+% of all tax revenues.


But the downsides of helicopter money are never mentioned, of course. Like QE (i.e. monetary stimulus), fiscal stimulus (helicopter money) will be sold as a temporary measure that quickly become permanent, as the economy will crater the moment it is withdrawn.

The temporary relief turns out to be, well, heroin, and the Cold Turkey withdrawal, full-blown depression.


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
38BWD22's picture



"It Begins" again?

Mr Pink's picture

$9oo every month? That's almost as much as 1/3 of Americans

COSMOS's picture

This can only mean Benny Bernake and some of the other filthy scums cousins of his have found employment in Finland.  Expect none of that money to make it into Finnish pockets.

macholatte's picture

Just Erase It

When will they learn that all they need do is stop “lending” money to themselves and merely stop paying interest on the “debt” they owe to .gov and simply repudiate that “debt” which is merely money fabricated by a CB and “lent” to a .gov which is simply nothing more than slight of hand con job enslaving the sheeple.

y3maxx's picture

Im movin to Finland...whos coming with?

Realname's picture

A shitload of 'refugees' from the ME.

tmosley's picture

Basic income is much, MUCH better than the system that is being replaced, where you are incentivized not to work.

This would and could only be bad if it was funded by central bank printing, which is FUCKING ISN'T and Tyler should be absolutely fucking ashamed for implying such.

1223pm's picture

Nothing works when base is on fiat.

Stuck on Zero's picture

Obama's plan to stimulate the economy is to drop two million Syrians on the USA. I prefer the cash.

Bring the Gold's picture

I want to see this kind of Helicopter Drop in the US. Fuck giving the money to banks, you want to stimulate the economy due this a week before Black Friday even ONCE A YEAR and you will see a huge spike in spending. Doing it monthly? I love it. We are going to have a hyperinflation one way or the other. I like the version where I'm given lots of free money to spend on food, PM's etc. After all, all my previous PM's are at the bottom of Lake "Boating Accident". :'(

Motasaurus's picture

Agreed. I could do with $1200 a month to spend on whatever I wanted. There's a $1200 EMP proof solar/diesel/rotary emergency combination generator I've been eyeing off for quite a while now. Then there's that ounce of AU I could get each month. 

Heck, I might even be able to afford the prohibitively expensive firearm license and get myself some copper-lead combinations.

EddieLomax's picture

Still on the fence on the Syrians thing, It depends on what faction they are and from what height they are dropped...

847328_3527's picture

Finland is depressing enough in the winter with  minus 20 degree temps with 25 mph winds sweeping the streets. Add an economic downturn and it will be pretty bad there. They already have one of the highest suicide rates and alcoholism rates. I was there one winter for a month and incredibly depressing. People were gloomy all the time. Very depressing.

hoyeru's picture

right, Findland is bad, sure. WHy dont you instead visit any Skid Row in ANy major American city to see trully depressing and report what you see. Just walk around to see all the cazies druggies and alchholics. And America is supposed to be the richest country in the world, right.

So come on, when is your report in USA coming out?

robertocarlos's picture

East Hastings in Vancouver. Third world sort of but the people camped out on the sidewalk looked pretty happy as I drove on by. I was the sad one.

Acarus's picture

Currency wars are stepping it up.

MeBizarro's picture

Finnish are from the most emotionally expressive people but gloomy all of the time? Finns have some of the highest reported rates of happiness overall of any country in the world even if they have some of the highest suicide rates too.

lincolnsteffens's picture

If you did this here AND eliminated the huge welfare bureaucracy (millions of paper pushers giving no value added) it might be worth a try. I thought of this 20 years back. No welfare check, no free food, no free medicine, no free or subsidized housing means you use your stipend any way you choose. If you screw up and don't get health insurance too bad. You spent all your stipend on scratch tickets, too bad starve or beg. In a round about way that would put more personal responsibility back into society.Want to work hard, you get to keep all your income, tax free up to $20 K a year. This could also put a bunch of IRS agents out of work.

What thinks the club? Here is your stipend. Sink or swim, it is all up to you.

hoyeru's picture

and how about also eliminating the HUGE Military spending that amounts in the trillions of dollars and cut the budget of CIA< FBI and all thr secret the slush finds? WHy dont you talk about that too huh? Why are none of you trolls even mentioning the Military spending?

tmosley's picture

It's actually pretty small compared to entitlement spending.

When I made my budget allowing implimentation of a BI, I cut military spending to plug the deficit hole. That was about all it was good for. Put maybe 1/4th military spending towards a basic income. 95% of the funding for BI came from entitlements.

MeBizarro's picture

Absolutely should be done and would be one way to truly downsize and main the federal gov't more efficient.  The GOP won't do it because they don't give a fuck about the poor and the Democrats won't do it because of limiting the scope of federal gov't.

all-priced-in's picture

"This would and could only be bad if it was funded by central bank printing"


So the central bank will not be increasing its balance sheet?


Maybe have Goldman buy the bonds first - then sell them to the cebtral bank - front running makes everything better. ;-O





beemasters's picture

And some Finnish might consider living in some Asian tropical paradise while collecting $900 a month back home. It should be enough to live quite comfortably while waiting for some economic recovery. Just sayin'...

eforce's picture

This could work out quite well if you convert it to gold for when the crunch finally comes as the 'helicopter' 'hits the deck'.

Johnny Horscaulk's picture
A Finnish magazine that challenged the Zionist elite Jewish Media Influence in Sweden (and Finland)

In every country in the west, it is the same thing.  Definitely not part of any plan though of course. Zionists are not known for being highly organized transnationally.



Perimetr's picture

Time to apply for dual citizenship! 

valjoux7750's picture

900.00 a month?  I'll  take it!  

Kirk2NCC1701's picture

Sing along now: Finland, Finland, Finland.  The country where I want to be...

Pony trekking or camping; Or just watching TV...  Finland, Finland, Finland.  It's the country for me...

Money Counterfeiter's picture

Hanging around the Harvard petards too much.  Guaranteed to screw up you thinking for life.


I would turn that into American Eagles instantly, every fucking month.

Lucky bastards.

Divine's picture

As a Finn I must say that the 900 € monthly "citizen salary" is only one of the options on the table. Mostly the talk has centered around idea that people without jobs could get the 900 € a month automaticly without paperwork / bureaucracy involved nowdays.

Finnish economy has been hit hard with the Russian sanctions (the hardest in EU)  and 10's of thousands have been laid off.

There is not a lot of good things to anticipate in Finland as we are flooded with the sandpeople and naggers, industry has been moved to Asia and all the major corporations use aggressive tax evasion techniques.

ONE THE BIGGEST CORPORATE TAX PAYER WAS SUPERCELL which employs about 20 people. That should give you a good estimate of the problem. Even state owned enterprises use the tax havens. Supercell (they make mobile games) actually paid more taxes than Neste Oil that is a 50 % state owned oil company.

Just wanted to say FUCK YOU USA and NATO for fucking up my country :( I'm moving to Canada as soon as possible to start my legal cannabis business.

Atleast people are starting to get really pissed off and when Finns get upset in large numbers - there will be blood.

Vendetta's picture

Thank the globalists ... deregulation and outsourcing with impunity and with no regard to maintaining a country's sovereignty or ability to control its own destiny.

Hobbleknee's picture

Swedish GPD... that was pure comedy.

VWAndy's picture

Hahahhahahhahaahaahaahahahahhahahahaahahhahaah fools.

Rhal's picture

Such a money drop is a gut reaction, although its so much better than just giving money to the banks to hoard.

 A better plan would be to use such money directly against peoples debts so more of their earned income could circulate in the economy, then tighten lending so people don't get into such debt again. Sustainable. Of course I'm assuming the Fin govt isn't part of the plan to crash it all...

Peterus's picture

You'd still to have to pay cash to people who don't have any debts (while the debtors don't get in hand, but just get debt paid off by the amount) so that there's no incetive for everybody to take on debts just to get a free lunch.

Ms No's picture

Oh shit.  US is hitting Syrian troops, Swedes are loading the helicopter money and we lose our gun rights at 8pm... today is busy!

Glass Seagull's picture



That ain't shit.  US welfare system cranks out the handouts, and, I just got $500 for my scrap gold!

H H Henry P P P Paulson's picture

When your country gives its citizens the equivalent to one of those clear-glass tornado wind cash tubes you see on game shows, you know the theatrics are coming to its Final Act.

DogeCoin's picture

This is a good time for the Finns to buy gold. Every month.

holdbuysell's picture

Keep in mind, when one sells stocks, one needs to wait three days for the trade to clear before it’s deposited into the account as currency. That could be an eternity when everyone is bailing out of currency and into tangible assets. In three day’s time, the currency could lose another 90%+...just ask Germany.

rsnoble's picture

"entrenched oligarchy" 

Fucked just like the US citizens.

I would suggest that they spend that money as fast as they get it. 

lincolnsteffens's picture

That's the idea. If they don't the purchasing power will decrease.

Yen Cross's picture

 Lets drop some paper promises during the winter in Scandanavia.

PoasterToaster's picture

Replacing the welfare system, including the Social Security welfare program, with a national income would be a good idea to keep their centrally-controlled system intact awhile longer.  Removing all the ancient propaganda driven programs based on the idea of "the worthy poor" would be a far sight better than what we have now.  Not as good as actual free markets, but if you wanted to keep your oligarchy intact awhile longer it would probably be the smart thing to do.

It would never be as good as a truly free market, but it is a good stepping stone to get people out of the panic mode that mass poverty creates, and into a better frame of mind to make positive changes in the country.

Bill of Rights's picture

That first GDP chart is a crock of shit.

Vendetta's picture

Yep, you're correct.  If it was entitled 'Fake GDP' it would be accurate.

mijev's picture

After that announcement, Finland can expect a massve influx of new refugees, and not just from Syria. Half of europe will try to move there.