Posted on 06/02/2015 9:05:36 AM PDT by tcrlaf
Towards the end of April, we discussed how QE has led to a global deflationary supply glut. This is a theme we’ve been building on for a while now and, as noted on Monday, it is perhaps nowhere more evident than among US oil producers.
SNIP----
Sure enough, the semi-official helicopter cash drop call is here via Bloomberg View’s Clive Crook. Abandon all sound money faith ye who read on:
But QE isn't unconventional any longer. It mostly worked, the evidence suggests. The world avoided another Great Depression. Yet even in the U.S., this is a seriously sub-par recovery; growth in Europe and Japan has been worse still. Now imagine a big new financial shock. It's quite possible that all three economies would fall back into recession. What then?
We don’t like where this is going already, please don’t tell us more…
Sooner rather than later, attention therefore needs to turn to a new kind of unconventional monetary policy: helicopter money…
The idea is far from crazy. Lately, more economists have been advocating it, and they're right.
The logic is simple. If central banks need to expand demand -- and interest rates can't be cut any further -- let them send a check to every citizen.
Much of this money would be spent, boosting demand just as Friedman said. Nobody, so far as I'm aware, is arguing that it wouldn't be effective. What, then, is the objection?
(Excerpt) Read more at zerohedge.com ...
The same idea that "Smart Democrats!" refused to even consider when they had total control of Congress? (Remember the Republican idea countering Obama's Porkulus, namely giving every American WORKING Family a really big check, something like $10,000 dollars? It would have been a HELL of a lot cheaper, in the end.)
Can't see it happening. Where is the Democrat vote and favor buying in that?
Call Bill and Hillary Clinton. They have multi-millions to give away. Oh, that’s right…Democrats buy votes with Other People’s Money.
So loan ourselves money we don’t have and have no means to pay it back
From everything being reported by the MSM, the economy is rolling along just fine.
Oh hell, let’s skip the hyperinflation and jump straight to the devastating world war.
Don’t forget: Everything written at Zero Hedge is total bullshit written by crazy people.
Don’t forget: Everything written at Zero Hedge is total bullshit written by crazy people.
Day of the Krugman...
Deflationary?
Not by a long shot.
There isn't anything I can think of that doesn't cost more now than when Obama took office.
There would in fact be little difference between QE that used newly created money to buy Treasury bills and mortgage bonds, and a QE program that gave money out directly to people who would spend it.
The recipients of the money would, of course, spend it. Where would it go then? Directly to the upper class investors who control the entire economy, and own everything. It would, like the money paid for Treasury bills and mortgage bonds, flow into the stock market and other investment venues. Stock prices would rise, and the wealthy would get wealthier. The people who spent the money would have some consumer goods that would soon be used up, but no additional wealth.
I remember that, the estimate was something like 17K per every tax payer in the United States. Return tax payer money to the actual taxpayer?...interesting concept but not likely to happen!
Talking about oil and gas.
Me too.
Gasoline was $1.89 a gallon the day Obama was first sworn into office.
Last night the local price jumped 20¢ bringing it to $2.65 a gallon.
“I remember that, the estimate was something like 17K per every tax payer in the United States. Return tax payer money to the actual taxpayer?...interesting concept but not likely to happen!”
Imagine how many homes would have been saved from Repo’s, preserving wealth?
Imagine how many cars would have been purchased, preventing the need for the insane “Cash-For-Clunkers” that destroyed used cars that would have been purchased by the working poor?
Small businesses opened?
Vacations taken, preserving jobs, etc,etc, and., the list of potential helpful things is far too long to list.
Instead, we got wheelbarrows of cash handed out to Democrat Billionaire cronies, and Democrat Activists”.
“buy Treasury bills and ...”
No offense to you, but the terminology “buying and selling” debt instruments rather than the terminology “borrowing and lending” strikes me as a smokescreen.
How many ordinary citizens know what’s going on when they read “Treasury is buying bonds”? I have to think about it myself. It means that the Treasury is lending money, doesn’t it? Why not just say they’re lending money? Could it be that citizens aren’t supposed to know what’s really going on?
Well we are in an ongoing deflationary depression now. You can’t see it thanks to the electronic soup kitchens; food stamps, 2 yrs of unemployment insurance etc. Otherwise with 92 million people unemployed the lines would wrap around every block and people would be starving to death.
I could see money going to the struggling middle class. That would be those too well off to get government freebies but too strapped to do anything but barely get by. Such an investment in America (or whatever) would mostly be spent, a lot of it going into the local economy. And responsible people who struggle to make ends meet would be given the boost they might need.
It would help retirees who were always told to plan their retirements assuming at least 4% interest on savings. We're being BLED DRY by these insanely low interest rates on savings.
No, they’re really buying bonds in the open market. It is not a loan. The owner of the bond gets the cash, and the Fed now owns the bond.
In the case of Treasury bonds, the Fed ‘remits’ the interest on the bond to the Treasury, so in effect the government no longer has to pay interest on the bond. However, the Fed does collect interest on the mortgage bonds it owns.
As I recall, it seemed to me that the trigger for the whole economy crash started when Pres. Bush sent all Americans about $500 back in 2008. What could have been more predictable than the middle east raising oil prices to get their share. Then when the $500 was spent at the gas pump, Americans who were living too close to their paycheck had to choose whether to buy gas to get to work or pay their mortgages. Then the mortgage crisis hit, gas prices were still high and the economy went down like a row of dominoes. This is a bad idea.
Try reducing taxes dramatically. That will work.
I think money costs less - both actual value of a $ (lb, yen, deutschmark, ruble, franc, yuan, etc and what they could be exchanged for) and cost of borrowing money (interest rates) are down.
High tech (value vs cost - I think GBs and computing power here) and Oil/gas is cheaper (~$100 vs ~$60) than 2008
My utilities have been flat to very slightly up, not sure overall - varies by locale? - compared to 2008
Day to day stuff has been inflationary (food, clothes)vs 2008
What I’ve seen is real estate is flat, again varies by locale, vs 2008
Comic books are definitely in a downward trend (good for me)even older books are basically flat to declining vs 2008 with the exception of very key books. Used to be a ‘60s book was $5-10, now I’m getting them from $.50 to $4 on average. Brand new the prices are up, but I don’t buy brand new because they’re like a new car you loose have the price soon as you drive off the lot.
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