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Everything Central Banks Have Tried Has Failed: According To Citi's Buiter Just One Thing Remains
Seven years after ZIRP (then NIRP) was launched and central banks grew their balance sheets by $13 trillion, in the process inflating the biggest bubble the world has ever seen, sending risk prices to record highs and trillions in government debt to record negative yields, first the Fed admitted QE was a mistake, and now the investment banks - especially those who were bailed out and were the biggest beneficiaries of QE such as Citigroup - admit central bank quantitative easing failed.
The reason for this failure? What we said from day one dooms all unconventional monetary policy - too much debt.
Here is Citi's Willem Buiter, finally catching up to what we said in early 2009.
We believe that a common factor in the relatively low response of real economic activity to changes in asset prices and yields is probably the fact that the euro area remains highly leveraged. The total debt of households, non-financial enterprises and the general government sector as a share of GDP is higher now than it was at the beginning of the GFC. There has been some shift from the private sector to the public sector, but the overall debt burden remains unprecedentedly high for an economy in peacetime (and for which the debt incurred during the last major war (1939-1945) has long since been worked off).
The wealth effect of higher stock prices appears to do little to boost private consumer expenditure and the lift given by higher stock prices to ‘Tobin’s q’ does not appear to have stimulated private capital expenditure much. The weaker external value of the euro has clearly increased profit margins in exporting and import-competing industries and may have boosted the stock market valuations of internationally active Eurozone-listed companies, but its effect on the volumes of exports and imports appears to be moderate (in part because a number of other countries are pinning their hopes on generating a bounce in inflation and activity through weaker exchange rates, too). Extremely low interest rates have boosted residential mortgage borrowing in Germany and caused German house prices to rise at a, by German standards, alarming year-on-year rate of six percent during several months in 2015.
Excessive indebtedness means households save much of any increase in disposable income in an attempt to pay down the debt. Highly indebted governments, prompted by necessity (limited market access) and/or by the constraints of the Stability and Growth Pact, are less likely to cut taxes or to boost public spending on real goods and services when lower debt service costs raise their disposable incomes. Corporations, even if they are not debt-constrained, are unlikely to boost investment when interest rates go down and the cost of capital falls because of persistent excess capacity amid an uncertain outlook for top-line growth and profits. Profits generated by favorable movements in asset prices (including the exchange rate) are distributed to shareholders (who save a large share of this) and used for share buybacks or debt repayment.
To the extent that monetary policy has had an effect on real activity, and will have some incremental effect on activity, it may not be entirely sustainable. This is because part of the effect has been by bringing forward demand from the future, such as major purchases, including for cars or construction. That suggests that monetary policy, even if and when it has been effective in stimulating activity, will run into diminishing returns even in sustaining the levels of activity it helped to boost.
So while the Eurozone’s IS curve may not be exactly vertical, it may well be disconcertingly close to being vertical in the future.
In short: the ECB's attempts at reflating the economy, while admirable, have failed.
The combination of a near-horizontal LM curve and a near-vertical IS curve suggests that expansionary monetary policy is by no means guaranteed to boost demand sufficiently to achieve the ECB’s inflation target, regardless of the scale on which this is pursued. What is to be done?
Well, since admission of failure means the end of the neo-Keynesian, and monetarist system, and according to some, the end of the fiat, fractional reserve system itself, one must - according to Citigroup's chief economist - pursue the only option left.
"Helicopter money drops (what else?)"
Our conclusion is that, in a financially-challenged economy like the Eurozone, with policy rates close to the ELB, and with excessive leverage in both the public and private sectors, balance sheet expansion by the central bank alone may not be sufficient to boost aggregate demand by enough to achieve the inflation target in a sustained manner.
This is more than an academic curiosity. Japan has failed to achieve a sustained positive rate of inflation since its great financial crash in 1990. The balance sheet expansion of the Bank of Japan since the crisis has been remarkable but ineffective as regards the achievement of sustained positive inflation and, since 2000, the inflation target. The balance sheet of the Swiss National Bank has expanded even more impressively, again with no discernable impact on the inflation rate.
* * *
We do expect the ECB’s asset purchase program will expand considerably further, with the Eurosystem’s balance sheet reaching €4,000-4,500bn over the next year or two. But we doubt that even this will be enough to achieve the inflation target of close to but below 2% on a lasting basis. It might take even greater ECB balance sheet expansion to achieve the target.
But the larger central banks’ balance sheets get, the louder will become the voices of those that criticize the power vested in unelected and mostly unaccountable central banks. In addition, it is worth remembering that the laws and regulations that underwrite and circumscribe central bank actions were written at a time when their current range of actions, let alone the potentially even larger future ones, seemed exceedingly unlikely and maybe even (in the case of the ECB) inconceivable. Political concerns likely played a role in the SNB’s decision to rely less on its balance sheet and more on negative rates when managing its currency (and indeed allowing a sharp appreciation of the Swiss franc and greater exchange rate volatility). The ‘Audit the Fed’ movement is likely to be followed by ‘Audit the ECB’ movements and eventually by explicit limits on central bank actions as their balance sheets grow to politically unacceptable levels. We do not say that moment is near, but to dismiss the idea that political limits to the size of the central bank balance sheet exist seems naïve.
Moreover, even if the ECB were to expand its balance sheet sufficiently to achieve the inflation target in the next few years (say, to €5tn or €6tn), the monetary policy toolkit would then seem to be rather empty, with little option for stimulus if and when the next downturn hits (as it inevitably will). Experience teaches that downturns do happen – either for internal or external reasons – and sometimes happen when output gaps have not been closed. What happens then? Draghi’s answer seems to be: perhaps a balance sheet expansion to €10tn or €15tn. We are doubtful that such a course of action would be both perceived to be politically legitimate and economically effective.
Why thank you for telling us 7 years later that the entire path on which global central banks set off in 2009 had been a dead end. We could say we warned you but... well, we did. Every single day.
So now what? Well, this.
Buiter concludes:
The case for helicopter money is therefore partly to ensure the euro area (and some other advanced economies) reflate powerfully enough to escape the liquidity trap, rather than settle in a lasting rut of low-flation and low growth, with “emergency” levels of asset purchases and interest rates becoming the norm.
* * *
In orderly markets and with the policy rate at the ELB, the central bank can talk loudly, but on its own – without the fiscal support required to turn its monetized balance sheet expansions into helicopter money drops – it carries but a small stick.
* * *
If, as seems possible, the ECB will increase, in H1 2016, the scale of its monthly asset purchases from €60bn to, say, €75bn, and if these additional purchases are concentrated on public debt, the euro area will benefit from a ‘backdoor’ helicopter money drop –something long overdue.
He is right.
So let's stop pretending that the Fed has a chance in hell of reflating the economy by hiking rates just as the recession begins, and fast forward to the inevitable next step: the beginning of the end for fiat, starting with its widespread paradop above populated urban centers, much to the delight of millions of people everywhere, and a few very big and very underwater debtors, for whom runaway inflation is just what the Doctor (of economics) ordered.
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The End Of Days is near.
Of course the helicopter drop is an option that’s left, but they can also ban cash and push rates significantly negative, or in one fell swoop with the E-dollar. Central banks are far from out of bullets like many believe.
Right, I fully expect a cash ban is coming soon.
Then it may be about time for our turn to try everthing.
Go to any place outside the Western system, and cash is still king - impossible to get entire nations whose lifebloods revolve around cash, to get rid of it. It's simply not happening this decade, and TPTB know it. Most of the world has smartpoops now - the number one tool in getting cashless rolled out. What doesn't exist is the global phone-to-phone / service-to-backend payment system. You can bet your ass that Visa and MasterCard and the rest are busy at work on that.
There aren't too many businesses in the US that are cash-only, but from bars to boba-tea shops, largely in the food/drink service sector, they still exist. What is the economic impact in the Western world of a cashless system? Probably not that big. Some businesses go under, and life as a whole does not change. The same is not true in Africa and Asia.
One interesting place is India, likely the biggest cash user in the world - everything is done through cash there. They are also the world's leading mobile e-commerce users. That presents an interesting dynamic in which the propensity towards a cashless all-electronic system is high, but the natural ecosystem is cash-based.
How it all plays out is completely up in the air, but I do not foresee an easy cashless rollout without a major reset/rejiggering and whatnot globally.
If the phrase 'helicopter money' begins to appear in the dialogue among people who's decisions can affect the quality of life of millions of people, it is a gargantuan red flag that the system of money being used in that economy is a sham and a fraud, and must be replaced by a sound money strategy. Period. There is no need for further discussion.
PMs, Au Ag & Pb
Bwahahaha, urp, urk, koff, koff
C'mon 2016, Bring it on...
;-)
I'm also surprised Tyler counts it as a success, when Buiter simply weasels his way out of his previous argumentation.
ZIRP is not an accident by any means--it is the planned stop on the way to NIRP. Rates have been on a downward path since the early 1980s. At the same time, the Government deficits have ballooned and increasing numbers of people are totally dependent on Government for their existence. And I'm not just talking about the welfare cases--I'm also talking about college grads who work for the Government either directly or indirectly (via contractors). It cuts across the social/educational spectrum and w/o the Government $$ flowing, all these people would be shit out of luck. As private industry has downsized and offshored, the Government has steadily taken up the slack to maintain the illusion of prosperity.
If 10Yr UST rates ever tops 4%, the deficit becomes unaffordable (even with Fed intervention) and all Hell would break loose. All the smart politicians realize this. That scenario cannot be allowed to happen, so the "emergency" will continue without end because the alternative is simply unacceptable.
That is also why I consider NIRP the most likely outcome. After all, at it's core, NIRP is a wealth tax. With ZIRP, Government deficits become managable; with NIRP, they become PROFITABLE. What remains of the Middle & Upper classes (short of the 1%) won't like it, but these folks are less likely to riot than those at the bottom of the ladder.
That is a mistake that some people make. Thinking that anything will be profitable with NIRP. NIRP will only be a very short stop before total collapse. Aside from that the government doesn't profit from anything, not even NIRP. They will simply continue to borrow and spend. I don't see how you think that is profit.
Simple. With NIRP, people & organizations pay you for the privilege of loaning them $$. So, with NIRP, the Government would make $$ off its debt. Granted, not every government could pull that off, but the US Government probably could.
You may ask: why would anyone put up with that? The answer is: convenience & wealth preservation. If a bank charges you 1% a year to park your $$ there, you will be outraged but may do it because 1) parking it other places (like the stock market, corporate bonds or under the matress at home) may be too risky; 2) you still need to access it on demand using an ATM or debit card; 3) you can't think outside the box (& the vast majority of people cannot).
Straight from the land where all economic choices are half-taken...
http://blog.supplysideliberal.com/post/56754781054/silvio-gesells-plan-f...
Genius by mistake?
Yes we are approaching the onset of helicopter cash and total collapse then WW3!
The rest of the agenda can be seen here......
http://beforeitsnews.com/conspiracy-theories/2015/12/as-events-spiral-ou...
Well, they haven't tried just directly boot fucking everyone yet...........................
You can't feel that jackboot up your arse ?
Prolapsed rectum perhaps ?
Hey, Winston, I know you Brits live for that prep school buggery nonsense, but we like our pussy over here for the most part.
With the exception of our fearless leader, and the Wookie In Chief.
I live in The Land Of The Fee, Land Of The Brave, Ain't Gonna Be Nobody's Slave.
Wrote the musical, will sell movie rights for the right pile of silver and gold.
True wealth is being able to range anyone less than 800 yards from the home who is there uninvited.
Where do you think I live ?
Hint:I have free range aligators,rattlesnakes and water moccaisins in my garden.
Never saw the buggery in my PUBLIC school,thats a private school, for those unschooled
in British snobbery.
Glad to say my old school is back in the number one place in the UK for academics again this year.
You misspelt Fee and Slave in your ditty.
We live in the Land Of The Fee nowadays.
Slave is spelled correctly.
Land of the Free disappeared in the sixties starting to really gather speed about the time Kennedy was assassinated.
If you went to public school instead of prep school, then you must be one of the Great Unwashed, not one of The Elites.
Therefore, you may have missed out on high society's more well rounded celebrations of quality of life.
Congratulations.
As for your current location, it does not dispel the DNA, or conditioning imposed by centuries of Royal boot fucking of the peasants.
So, who is going to produce goods and services?
Who needs to produce, we will just eat fiat.Unlike gold its edible(sort of).
Gold IS edible, unlike iPads.
http://www.amazon.com/Edible-Gold-25-3-3-square-sheets/dp/B0006GSQYK
http://www.dailymail.co.uk/femail/article-2142399/The-1-000-ice-cream-su...
http://gothamist.com/2014/05/30/restaurant_offers_160_gold_dusted_l.php
http://www.nbcnews.com/business/consumer/900-cupcake-topped-gold-n186061
I'm guessing Bernanke will be flying those copters?
There you have it. The last man standing theory of economnomics. Helicopter fiats. Then everyone can pay for your production without lifting a finger themselves.
Moar debt!
The irony is that people will save that money or pay off debt. It won't do shit for "demand". You can't "create demand" when it's all been pulled forward in the form of debt.
He already stated that in his article so the disconnect, and sheer desperation is palpable.
Doing it will cause the severe deflation they are trying to avoid.
Truly, they have no clue what to do anymore.
Give me free currency and watch demand increase - for silver
Yeah, lets listen to Willem "Gold-Is-A-6000-Year-Bubble" Buiter.
In the last 10 years Citi equity holders are down a mere 95%, meanwhile holders of Gold have received a 100% gain over the same timeframe.
If they're going to drop money from helicopters, maybe I should send them my GPS coordinates. But they probly already know that.
They'll just pin $100 bills to that Hellfire.
But they probly already know that
Only if you own a car, cell phone, computer or i-watch
I'm thinking 'Mobster Rolls' preserved in bacon grease, instead of bomblets, could be a multitasking weapon of desolation.
Micro dosing for productivity gains 'splains some of it.
http://www.telegraph.co.uk/news/newstopics/howaboutthat/12019140/Silicon...
Sad, and these morons still get a platform to explain their failed policies.
Problem with helicopter money is : it is just another kick again the can.
Centrally planned massive inflation can solve everything. Debts & deficits shrink and resolve themselves. The Government gains power as people in crisis scramble. Whats not to like for politicans.
Trouble is they're trapped by the automatic inflation adjustments in SS and government pensions. This year they claimed inflation was zero. They're not going to get away with that for long ... people who buy groceries know better. The oil collapse allowed them to dodge the bullet this year.
Debt JUBILEE!!!
Yep. And about time. The only thing I wonder about is why we pay these crazy idiots to pretend to be doing a job that they continually fail at. The whole argument behind central banking in the first place was that it would remove volatility from the system and it hasn't. Time to return to the old Seneiorage system again.
What we said from day one dooms all unconventional monetary policy - too much debt.
Too much "default". Very different from "debt" .... unless you're referring to governments.
Here we have the classic one bankrupt bailing out another bankrupt. Hard to see how that can work?
Wait - ECB and "admirable"in the same sentence?
I haven't received my $4 million tax-free from the FED, 7 years after Wall Street got their bailouts.
And now tragedy will befall the world economy because of a 0.25% rate hike off of zero!
You see how insane everything has become? And this article from bailout queen Citi!
Crazy town!
Things made more sense when I od'ed on LSD.
Oh wait, maybe this is a flashback.
Submit an invoice to the FRB for repayment of all your lost interest for the past seven years, now that the emergency is over and the FRB raised rates. Claim you want just compensation for the confiscation of your interest which the banks seized and used to buy US government bonds: that's the taking of private wealth for the public treasury, the dictionary definition of confiscation. For interest rates, use the same rate the IRS charges on late payments, etc; they should be good for establishing a precedent of interest rate for a penalty on delayed compensation. Read the Fifth Amendment in the USA Constitution if you have any questions!
When they deny payment, take their letter as your confirmed proof of loss or uncollectable bad debt and deduct if from your income. Note this a scenario, not financial advice, blah, blah, blah...etc etc etc.
As soon as the first few euros hit the ground, euro bond prices will crater. Then what? An apology for the worst monetary policy in the history of recorded economics?
How about the FED and the ECB, just pay the individual debts of everyone having an income of 45K or lower?
How bout we barter and let the banksters eat all that fiat and every last bit of debt valued in it?
The banks and wall st street got all the QE cash they needed. Now it is time to turn off the spigot before the cash starts trickling down to someone who actually needs it.
Does that pretty much sum it up?
There is one other option. It's what President Warren Harding chose to do in 1921 with an impending depression.
He did NOTHING. He steadfastly refused to subsidise or bail-out anyone; not even farmers.
That "forgotten depression" lasted about two years and the economy took off.
In subsquent years Harding has been denigrated and called an idiot. He was defeated in the next election.
In the light of what is happening now I believe many are taking another look at his methods. But I doubt there's anyone these days that have the balls to do what's really necessary.
Iceland did. And got the same result.
Multiple track records of ours are crap at a glance
http://patrick.net/?p=1223928
-- the first four charts are kept rarely seen. The people are STILL massively deceived by omission.
One thing. If they go with the helicopter money thing they wont say anything about it. You will go to the bank to get out cash and it will be all new bills. New everything in the till. Even then most folks wont even understand what it means to the real economy.
My admittedly dim understanding is that nobody on earth is loaning the US Treasury $ any longer, net sales are negative.
Which means, in my admittedly dim understanding, that the rollover of the national debt, $18T that rolls over every 4.5 years, will now roll over onto the Fed's purchases.
Which, in my admittedly dim understanding of the effect of QE's $1T / year ==> 10% inflation when QE was via the banks, and as all of the newly created cash would flow back through the current bond holdrs as they are paid off, would mean that pension funds, ... must invest that cash, and the cost of real things will explode. Not a different effect than giving that cash to the banks, so far as I see.
But the economy cannot return value sufficient to justify the purchase, and these purchases will spread the hot cash through the economy, transaction by transaction. Builtin instability, and high inflation how wonderful.
Now the question I always have is, why my dim understanding? Seems like I read enough to grasp such an elementry point and know one way or another. Does someone not want me to question down this line of thught, or am I just ignorant?
I trust some of you here can help me decide.
in the middle ages, leeches were the proscribed treatment for pretty well any sickness..
at the start of the third millenium, central banks printing money is the experiment to finance past spending excesses of governments beyond taxes collected (paying domestic welfare or depriving foregn countries of welfare)
arguments against leeching in the middle ages were met with blank stares by the medical profession because the medical profession was not smart enough to investigate and solve the many different underlying causes of sickness
arguments against printing money are met with blank stares by brain dead economists, central bankers and money grubbing politicians who commit the crime of refusing to solve fiscal spending problems
the mantra of "if you print money, the economy will grow" will soon be replaced by the mantra of "pay no taxes, print money" since central bankers are the drug pushing enablers of morally bankrupt politicians
problem is..who has the strength and character to form a political party that repays government debt by spending less than is taken in taxes?
we alredy know that the law of large numbers means the stock market cannot repair the transmission mechansim of savings to investment - especially when central banks can create savings out of thin air that have only resulted in malinvestment in the completely valueless social media revolution.
just saying
The insanity continues.
"They" want to continue the path of trying every gimmic they can think of, while ignoring the obvious.
Here's a brilliant idea: how about doing LESS? Quit creating uncertainty. How about lower spending and lower taxes? Sorry about the fact such a freaking obvious point contains no complex equations, and isn't so good for bureaucrats. I know the downside is this is something that has actually been proven to work. But in spite of the fact it works, how about trying that one.
"The wealth effect of higher stock prices appears to do little to boost private consumer expenditure"
Why should it? They are spending their declining income, which is cutting their consumer expenditure.
The best thing they can do is leave the economy alone and governments also need to leave the economy alone.
And the only goal of a govenrment should be to make sure taxes are as low as possible and government services are kept at a minimum.
Demdere,
CPI inflation would be a 'standard path'. Perhaps it has not happened (yet) because it is too easily understood by the masses. Personally, I think that protection is warranted.
All economies have tributaries and flows.
If you want general purchasing power to chase after cancer, then you will get cancer.
Helicopter drops that encourage consumption will just cycle to buy Chinese Crap.
Said Chinese Crap makers will then recycle the new dollars to buy TBills. This then puts Americans and Westerners into future hock in relation to the the drop.
BANKERS ARE greedy, and predators.
Any exogenous creation of money (outside of credit banking system) needs to CHANNEL. It should not be general purchasing power. It should not drop willy nilly causing dislocations.
Money is pay to the bearer upon demand, it is general purchasing power.
Don't helicopter drop general purchasing power you stupid asses, no telling what kind of cancer will grow.
I've explained here at ZH before how a country could create targeted instruments such as Mefobills that will pay down debts and build out new infrastructure simultaneously.
Schacht did something similar to this in Nazi germany to great success. The idea is to channel purchasing power to where the country needs it. Use DIRECTED CREDIT and channel exogenous debt free money. This pays down debts, unburdens the future, and leaves wealth and well being in its wake.
Oh that's right - bankers and economists don't know economic history. Let's not investigate Nazi Germany because they were eviiil and had a holocaust (holocaustianity is mostly propaganda bull shit).
Bankers and economists are both stoooopid and ignorant. (IF not stupid, then willfully malicious.) They are afraid to tell ignorant politicians that banker control over monetary policy by doing magick swaps has limits. Ignorant politicians are unable or unwilling to learn how money systems work.
Also, no- shit that QE doesn't work, it only inflates asset prices, especially financial paper as assets. QE destroys price discovery, causing markets to malfunction.
www.sovereignmoney.eu
Not trolling you ... you bills suggestion could work yet it would not work as you point out if not directed. Although much deeper if everybody gets the same then notihing in the system changes. It's like everybody goes up a %point but the underlying structural issue remains. QE did not give the %point because it did not hit the real economy it was a free handout to banks but nothing for the people.
This bit though ...
Helicopter drops that encourage consumption will just cycle to buy Chinese Crap.
To fix that we need to block free trade because that is how the Chinese and any other nations crap is arriving. When they embarked on QE no central banker will admit it money starts flowing across national borders and now we live in the world of a central banker QE rape train. All nations are trying to manipulate their positions (QE just part of the process) to generate inflows so keeping their sovereign debt afloat. Everybody is doing it so the bills you want to introduce in an economy utilising free trade will vanish just like it always has with no barrier to prevent it.
In that game somebody is going to lose because of another nations actions.
Thanks for the response.
The Bills are three party, something like a check. There is a receiver, and issuer and banker.
Issuer designates where it goes and how it is to be spent.
Receiver is the person receiving the bill, and in order to redeem it, they have to go to a bank.
The bill instructs the banker what to do with it. In this case, the banker sends it to the FED, and there it gets stuck.
Dollars shoot out of the FED's keyboard when it is swapped for the Bill.
Those dollars enter into banker ledger, decrementing the loan value. Principle on loan decrements, and former keyboard dollars disappear.
In a credit money system, dollars vanish when they pay down principle.
The bill remains behind, lodged on the ledger at the FED, principle is paid down decrementing mortgage ledger numbers, and no new dollars enter the money supply.
Former credit money still in supply is no longer earmarked for destruction, so it remains to circulate.
This action changes the ratio of debt instruments to money. The ratio now is very high , where debt instruments are claiming many multiples of the money supply. Creditors are now demanding real assets to satisfy their debt instruments. Greece is a good example.
But, yes, international flows of money are a problem.
Many times here at ZH, I point out that the world needs a bancor system, and that exchange rates - or trading money for money is perverse. When I mention this...crickets.
All trade is only barter, so an accounting system needs to relate to the barter nature of trade. Exchange rates DO NOT do that.
A few months back when Canada entered the "recession that never was" the government sent almost everyone a cheque. As a young family we got ours as a retroactive to beginning of 2015 supplement to the baby bonus from the fed and an increase in the provincial benefit as well.
This was done under the cover of being an inflation adjustment while at the same time there is no official inflation to speak off...except the 20% fx hit this year, 30% beef price, gas...hard to calculate but basically where usa gas has gone down almost a third from whenbyou was 135...in Canada the price for gas is same at the pump, within 10 or 15 cents now at 35 a barrel as at ubove 100 so that's what 65%...
Real wages not increasing, full time jobs down the toilet and part time jobs way up...numbers of folks that should be about to enjoy retirement that are starting great new carriers serving coffee or burgers greater then ever and they are taking the entry level jobs of all the highly over educated kids coming out of university that should be flipping burgers with their new degrees but instead sit in their parents basement smoking week and taking selfies to post on Facebook.
So the helicopter money..well the intended consequence was that everyone would run out and buy a bigger TV or newer iPhone or otherwise shop till they drop and get the economy booming again. Yeah right, epic fail...most used the money to pay down debt, the prudent thing to do seeing as debt burden in Canada is something near the same level as Greece...look at them now...and we pretend to be all western first world and shit. Fuck that, we are a Banana Republic without bananas so even much worse...half the year shit is frozen solid and food doesn't grow so yeah, better off in a tropical BR where shit grows all over the place and you can survive.
So what happened with the free money...we'll somehow Canada exited the recession that never was before anyone knew we were in one but the money drop just paid excess debt so the newly minted fiat vaporizes the moment it cancelled existing debt. Ridiculous how that works and try and explain that to the brain dead suit in front of you at the coffee shop who doesn't have a dollar fifty cash in his pocket...if the electronic payment system goes down what the hell do you do?
How dare you pay for your morning coffee with a fucking credit card...cash has become to these people, something even used by criminals and drug dealers. They hate touching it like they are allergic or something.
Me, I pay for almost everything with cash. I keep almost all my money on my person or in one of several well situated holes in the wall along with gold and silver that is completely outside the system and boy do I sleep well. Good luck to all them visa coffee buying fuckers when the bank holiday thing happens.
On the back of my truck, that is paid cash and 100% mine there is a bumper sticker that reads my other auto is a .223
No mercy for those that work as agents in the matrix or so hopelessly dependent on the system they become a danger to us.
Sorry went on a rant...the helicopter money I turned into silver maples and for the rest of the country...didn't have the intended effect but I would be happy to receive a round two any time.
Thanks gov of Canada
Thanks gov ON
Hope the law suit, people vs gov can and cb of Canada doesn't go your way
A reprint:
Mefo’s economic plan. Maybe some brain dead economist at FED will take head? Nah – they are immersed in their false all- money- is bank credit worldview.
Since nobody asked me. An economic plan for America
1)
Tell the FED they are to accept new MEFOBILLS onto their double entry ledgers. They are to accept these instruments as if they are debt paper.
2)
Mefobills are a three party instrument with defined channeling. There is an issuer, a recipient, and payee. Issuer is a legal body brought into being by law to do said issuing.
3)
In order to undo criminal housing bubble and student loan bubble, the future needs to be unburdened from debt. The way to do this is with exogenous money. The FED will be forced to be the exogenous creator (see item number 1).
4)
All property owners, especially those who were victimized by bubble economics, are to get a Bill. Said bill will be signed over (like a check) and aimed at households. Each household will have to redeem the bill at a bank. The bank is instructed by bill to pay the mortgage holder X amount of dollars and this money goes straight into paying down mortgage. The Bill is then passed to FED, who then pays mortgage bank.
a.
A family will receive their mefo bill, and it will be credit at first and will channel toward said family. When it is redeemed, new money will issue out of FED’s keyboard, and the effect will be to decrement principle of family’s loan.
i.
This action unburdens the future, thus undoing future profits of banksters, and allowing future money to circulate rather than being recalled to ledger.
ii.
The FED has something to swap and hence double entry mechanics are allowed to work. The FED cannot re-sell the bill back into the market, but must hold it.
iii.
Mefobills are credit at first until redeemed; they reduce principle. Upon decrementing ledger the money disappears – hence it is non-inflationary.
5)
Recipient of Mefo Bills must accept new rent taxes, especially to keep land prices from increasing. Rent taxes go after unearned income, taxing away free lunches. Recipient of Mefo Bill must agree that near future will have income taxes removed in exchange for proper Georgist style property taxes (an easy sell). Also as part of Mefo contract, recipient agrees to allow transition to a proper sovereign money system in future. Never again should debt instruments be created by private banksters to then control society.
6)
Those that don’t have property will get MefoBills for buying targeted American goods, or paying off of Student loans. Each Bill will be examined to make sure it is spent properly, otherwise it cannot be redeemed. Private bankers will earn fees for doing this examination service and working as an economic agent – not as a predator. No MefoBill converted to General Purchasing power is allowed to channel into Chinese crap, or American companies on the predator list. New money is to have a renewal effect.
7)
Those that have no pressing needs for American economic goods can invest their MefoBills in approved industry as a trust. This trust may pay interest as targeted industry takes-off and becomes productive. For example, if American’s want to reclaim Solar Cell industry from China, that could be targeted. The scope of MefoBills could be increased to reclaim former industry lost by the Wall Street/China gambit.
8)
After the future debt problem is reduced in this way, then a sovereign money system can be introduced. By then the public may have some faith that economists are not retarded.
What about those ... no debt ... no mortgage ... no student loan? This would be discrimination on a scale not seen since slavery and what if a person has a 100K or 200K mortgage do they get the same? The same for student loans etc ... or those who live a frugal life about to be trashed.
Here is how it should work ...
Everybody gets say 50K (an abstract figure), if you have debt exceeding this then that value of debt is cancelled.
If you have debt <50K but some then you are paid the difference in value to do with whatever you want.
If you have no debt, you get the full amount to do with as you wish and that means don't spend it neither.
1.) It has to be to all citizens under that central bank prior to 2008 (the crash) to exclude recent opportunists.
2.) Every citizen and that includes native born children of any age because they are going to see a jump in values rendering their start in life even harder, a trust fund should do it.
Too many in the last 40 years have had their lives systematically stripped away, even before they were born by the banksters and many will cheer the 1st one assasinated. I know I will! More so if you are to be victimised economically yet again.
So Hip, hip ---- hurrah ... hip,hip ---- hurrah.
What about those that have no debt:
See numbers 6 and 7. You didn't read carefully did you?
If you give away 50K chunks and don't channel it, it will cause inflation or some other distortion.
For example, those that don't need it can buy trust certificates, and that new trust financed industry will create jobs.
Sorry...you cannot do with it as you wish. Seigniorage on the money supply debases everybody. The idea is to re-invigorate with new productivity which improves the cost value of money, not degrading it.
I am talking about re-orienting economic flows and changing debt structure.
Simple gifts are helicopter drops and are extremely unwise.
Any country has interests, and the U.S. should be interested in the health and well being of its people.
I would add common sense removing of "friction" in our system.
There is pleny of waste (and malivestment) to go after first.
Health care, Education, and many other sectors come to mind.
Basically wholesale elimination of useless "laws" red tape and .gov boondoggles.
Your point on rentier economics is crucial.
https://realcurrencies.wordpress.com/interest-free-economics/
http://www.henrygeorge.org/isms.htm
Merry Christmas Meof.
"Everything Central Banks Have Tried Has Failed"
Bullshit. It has been a resounding success. Everything they have done so far has kept themselves alive for another day.
Do you really think they work for YOU?
Seriously?
Targeted inflation = capital destruction. Rule of 70 comes to mind.
What's the betting if and when they do helicopter drops of fiat it will only be to chosen groups?
And ... YOU ARE NOT IN THE CHOSEN GROUP
That will be the only truth and the only justifiable response will be to turn violently against those that accept the bribe.
A bribe, why a bribe?
The reason is if everybody gets the helicopter drop then nothing changes IT IS THE SAME.
So now you know the helicopter drop spouted by central bankers will be only to retain power and privilige for themselves yet again.
So those that do accept it, accept the suffering of a proportion of their own population for gain ...
Suggests those who are to suffer this would have justification in violently turning on those who accept if only to preserve themselves. ** NO WHERE IN ANY LAW DOES A CENTRAL BANKER HAVE ANY RIGHTS TO DO THIS**
So will the politicians be passing laws to justify the action of those who get and those who do not?
This is shaping up to be an ideological war better than any ISIS conflict like we currently have between race, religion, etc. but in this case it will be over who gets the free handouts and who does not.
Without legislation and the full debate to see those that would divide a population in such a way will likely turn into a full blown conflict ...
Debate the points above, in the end either you will be selected to stand with the bankers or you won't.
Going back all those years and all those $trillions to the banksters what would have happened if they had just given citizens the money.
Divvy it up and blow it out the helicopter door to every man woman and child and would it have been any worse than what we have now?
I think the tribe will get the money drop, while the goy suffer... of course they need their fill first
So since everyone's in debt they'll just pay bills and all the money will still go to the bankers.
Buiter, another stupid bitch, beholden to the City of London bankster nazionist. Silly cow. Always wrong, but always insisting he is correct, despite all evidence proving him wrong, nasty lil bitch; just another rootless cosmopolitan.
LOL! Failed? Failed at what?? What someone else wants??? NO SHIT!!! AND IT WASN'T A FUCKING ACCIDENT EITHER!!!
There is only one, little, problem with their idea. China, India, Russia, Brazil and just about anybody else with anything of value will want to be paid in gold, not greenies.
"Everything Central Banks Have Tried Has Failed:" Failed for "whom?"
They certainly succeeded for members of "The Central Bank Club."
Sigh, but I'm not a member.
So what does "helicopter money" look like if we are forced into a cashless society? Will there be pre-paid Obamaphones falling from the sky?
What does it look like?
(the 100% off sale)
https://www.youtube.com/watch?v=BRqKpanzDQw
The probem is tht evenif you sprayed fiat dollars at the poor it would still end up in the pockets of the top 1% and there it would stay.
The financial engine has broken down and pumping more petrol into it will not solve the problem.
The only thing that would curb some of the excesses is a requirement that the top 1% and members of congress all commit children and or grandchildren to the front line of every conflict, as well as footing the bill for all conflicts out of their assets.
Nobody tell this Willem Buiter guy, but Mario Draghi already promised to do "whatever it takes". It didn't fix the economy, but it did allow Citi to pretend to be solvent for a few years.
Also, throwing money out of helicopters has been done during the Weimar Republic. It didn't fix the economy or the banks, people brought wheelbarrows full of helicopter money just to buy a loaf of bread. Oh, and as a side effect (government weenies like to call it "collateral damage") -- it made it much easier for a guy named Hitler to show up.
But no Heir Buiter, it didn't work any better than QE. And if you were qualified to play economist, you should know this already.