Helicopter money and other extreme measures

It looks like more central bankers are warming up to the idea of helicopter money. Corporations have gotten so good at price fixing wages and maximizing profit the economy is no longer growing. Helicopter money is a way of putting money directly in household hands to stimulate the economy. Current ways of stimulating the economy used by central bankers are simply no longer working. At this time inflation is stubbornly low and will not budge. Indicators are indicating the economy is heading towards recession and the central bankers are discussing ways to get inflation going again.

Meanwhile CEOs are representing the shareholders well by keeping their own salaries at all time highs as well as dividends. While at the same time worker's wages have stagnated or barely keeping up with inflation. It will be 50 years at these rates of job increases make any real dent in making wages rise. We are years away before we return to the percentage of people employed before the 2008 banking crisis. It's a hot job market but people who have jobs are not seeing their wages rise nearly fast enough to make a difference in the economy.

So more and more central bankers are becoming more open to helicopter money:

'Helicopter money' and other extreme measures could be central banks' next options

They're desperate, and printing money is the only way they can keep their scam going.

Soon they'll be all in for UBI, handing everyone money right out of thin air... causing inflation like we've never seen while the last of the property is bought up by the few remaining people with any net worth.

originally posted by: lordcomac
They're desperate, and printing money is the only way they can keep their scam going.

Soon they'll be all in for UBI, handing everyone money right out of thin air... causing inflation like we've never seen while the last of the property is bought up by the few remaining people with any net worth.

The economy is a big ship with a small rudder. They just need to get it going in the right direction and it will take care of itself. A kick-start is a common metaphor used. Non-existent inflation is becoming a problem. At some point we will have contraction in real-terms which will undoubtedly lead to violent protests, uprisings, and civil unrest.

So where do you drop all this free money? Trickle down economics has shown that only a few really profit from that. Trickle up economics has a lot of people screaming communist.

There is still all those junk bonds floating around that never really got resolved from the 2008 GFC, big black hole there that ends up who knows where? All the big banks then got the helicopter money from quantitative easing there.

Perhaps getting the government books back in order would be a good place to start if someone is going to start throwing free money around, roads, schools, hospitals, police and the such. Will get the money flowing in the local communities.

Conventional monetary policy is more effective as brake than an accelerator. This is particularly true when interest rates have been low for a sustained period of time.

Given the political limitations of more active fiscal policy I don't think it's any surprise that central banks are looking at expanding the range of measures available to them.

When the base currency is a scam designed to run out of control (borrowing money creates more money to lend), monetary policy HAS to be effective at braking.
Otherwise the pyramid scheme would have gone out of control and collapsed with the first generation of suckers to use it, and they'd wise up and not let their children fall for the same scam.

By slowing it down and letting it take a century to steal everything from everyone, not enough people caught on in time.
Now nobody even owns land, let alone the buildings they live in... it all belongs to a select few people who grew up around the big central institutions running the scam.

It has a dumb name- helicopter money... because it's a dumb solution to an even dumber problem.
Essentially they're talking about air-dropping cash on people to jumpstart the economy.
Like I said in my last post... the're talking about UBI.

They want to give away free money, which decreases the value of the money currently in circulation. If you're well off and own property, buildings, equipment, etc than this isn't too bad for you... it just means the monetary value of everything you own will go up.
If you're the average nitwit and spend half your income on rent, this is bad for you. The value of your rental will go up, followed by your rent. Now you can get that $1000/month helicopter money, but your rent will go up $700 a month and your cost of bills (including food) will go up another $700 a month.
The farms will be worth more- the equipment will be worth more, the food they're selling will be worth more... so you'll have to pay more for it.
The value of every free cent will be absorbed into the cost of living. Any cash you have in the bank will lose value proportionally.

a reply to: lordcomac

They want to give away free money, which decreases the value of the money currently in circulation.

Will it really and just how much extra has to get pumped to have this effect? I know this is pretty common thinking but has it taken into account natural greed and how people have a tendency to hoard. What kind of effect will individual savings have to the monetary supply if there is an increase in general incomes?

originally posted by: kwakakev
a reply to: lordcomac

They want to give away free money, which decreases the value of the money currently in circulation.

Will it really and just how much extra has to get pumped to have this effect? I know this is pretty common thinking but has it taken into account natural greed and how people have a tendency to hoard. What kind of effect will individual savings have to the monetary supply if there is an increase in general incomes?

Assuming that increasing money in circulation results in proportionate increase in prices requires that both

1. The rate money gets spent stays constant.
2. There is no spare capacity in the economy.

They are both fairly big assumptions.

It's also worth noting that the supply of money already changes constantly.

a reply to: dfnj2015

Not understanding a whole lot about economics but does the idea of negative interest rates belong here?

I keep hearing more and more about it and I just can't understand how this will help.

Peace

a reply to: operation mindcrime

I keep hearing more and more about it and I just can't understand how this will help.

It helps put the brakes on these super rich people who get insane amounts of more money because they are already rich. High interest rates pushes more money to the big end of town.

It also helps with some of these big money loans that have gotten way out of control and have no realistic chance of getting payed off otherwise. How the IMF has exploited some of these smaller nations in the past is one example of this.

As with anything to do with money there is always a chance that someone will try and exploit the system, but to try and get some reasonable terms in the conditions, negative interests helps stop some things from falling apart.

a reply to: ScepticScot

1. The rate money gets spent stays constant.
2. There is no spare capacity in the economy.

1. For those on a good income I don't see too much change in the rate spent as their basic needs are already meet. Better house, car and clothes if they had more to spend. For those on a poor income there is some catching up to do on the basics so money rates will increase here with more income.

2. With the rates of homelessness and lack of disposable income for many sounds like there is room for more liquidity amongst the general population. Housing supply looks ok, automotive manufactures appear they could sell more cars. Plenty of food to go around.

originally posted by: kwakakev
a reply to: ScepticScot

1. The rate money gets spent stays constant.
2. There is no spare capacity in the economy.

1. For those on a good income I don't see too much change in the rate spent as their basic needs are already meet. Better house, car and clothes if they had more to spend. For those on a poor income there is some catching up to do on the basics so money rates will increase here with more income.

2. With the rates of homelessness and lack of disposable income for many sounds like there is room for more liquidity amongst the general population. Housing supply looks ok, automotive manufactures appear they could sell more cars. Plenty of food to go around.

Point 2 is they key one. If central banks are talking about injecting money directly into the economy its in a scenario where the economy is in or approaching a downturn. More demand is exactly what they are trying to achieve.

a reply to: ScepticScot

It is pretty dumb for a society to grind to a halt because there are not enough numbers for everyone to measure what they do. Too many numbers and it is a head bangers trying to add things up.

Demand for what? Social interaction?

originally posted by: kwakakev
a reply to: ScepticScot

It is pretty dumb for a society to grind to a halt because there are not enough numbers for everyone to measure what they do. Too many numbers and it is a head bangers trying to add things up.

Demand for what? Social interaction?

Not everyone does anything- that's where it all falls apart.
If everyone did *something* to help the species move forward, then having enough currency to go around would mean everyone would earn something.
But they don't. Most people don't. I'm over here earning five times the median income for my area because I have skills that can be exploited for the purposes of greed by my employers. The homeless guy walking down the street asking for change could be exploited for basic manual labor, but there's no basic manual labor in the area where he could earn a living wage.

This system doesn't work for people- it works for the banks. It was never designed to last past this point- it has done its job of stealing everything from just about everyone, so now the next step is for those who created it to simply run away with the wealth of an entire nation and let us figure out what to do next.

a reply to: lordcomac

One problem, is there is no standard definition of value. It is whatever someone is willing to pay for it, and that is until someone does pay for it. So until then we just have to make something up comparable to the market.

The exploitation comes in as people have different perceptions of what value 1$USD has. This kind of disparity is already having big conflicts on a national level. Trying to implement a single standard global currency for everyone at this time will expand these issues. Nations are all having there own local issues going on with the money machine, foreign exchange rates bouncing all over the place.

All nations working towards responsible and fair guidelines around it all is a good thing. Get on the same page with how it all works. With all the conflicts and tensions going on around the world this is something that cannot be forced too hard to find that reasonable line through it all. It take time and understanding, common sense is an international language.