Dropping Money From Helicopters Being Entertained
by Nathan McDonald, Sprott Money News
Despite the sputtering economy, despite report after report that indicates that global economies are slowing down, despite the historic amount of money printing that has done little to nothing to fix these issues, there are those out there who believe that the solution to all our problems is more of the same. More money printing.
One person that believes more money printing is the solution to all our problems is Clive Crook, who in a recent article published on Bloomberg states the following:
By pre-crash standards, the big central banks have made and continue to make amazing efforts to support demand and keep their economies running. Quantitative easing would once have been seen as reckless.
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?
First off, you must give him credit, where credit is due. He does point out the obvious, that despite the historic amount of money printing and this new dawn we call QE to infinity, the economy is still sub par. Where he is obviously wrong, is the praise he gives Central Banksters for their great job in avoiding another Great Depression.
Yet is this truly the case? Yes, QE after QE did stave off the inevitable for a short time period, unfortunately for all of us, the problems have only been papered over and continue to persist and grow underneath the surface. Another Great Depression was not prevented, only avoided monetarily.
With tongue in cheek, many in the precious metals community have joked that one shot the FED has never fired is simply printing copious amounts of money and dropping them from helicopters. This would be the ultimate act of QE and if according to the FED, who believes printing money out of thin air, with absolutely no backing is a good thing, then this strategy would be the ultimate stimulus plan, with of course absolutely no repercussions!
Any sane human being, without even understanding economics would know that this of course is a horrible idea. This is simply not how money is supposed to function. It would dilute the hard earned savings of every man and women who have worked their entire lives. Hyperinflation would ensue and the value of that money, although intrinsically nothing already, would truly evaporate overnight.
Yet, hilariously or sadly depending on how you read it, some economist have gone over the deep end and are now entertaining this very idea, Clive Crook is one of them, who had the following to say in his recent article:
Sooner rather than later, attention therefore needs to turn to a new kind of unconventional monetary policy: helicopter money.
One thing’s for sure: The idea needs a blander name. Milton Friedman, who argued that central banks could always defeat deflation by printing dollars and dropping them from helicopters, did nothing to make the idea acceptable. Put it that way and most people think the notion is crazy.
How about “QE for the people” instead? It has a nice populist ring to it — suggesting a convergence of financial excess and the Communist Manifesto. The problem is, it isn’t bland. It sounds even bolder than helicopter money. “Overt monetary financing” is closer to what’s required, but something even duller would be better.
Whatever you call it, the idea is far from crazy. Lately, more economists have been advocating it, and they’re right.
Far from crazy? That’s exactly what this idea is! As previously stated, you don’t need an advanced economics degree to understand how ridiculous this idea truly is.
Sadly, this is no joke, these people entertaining these ideas have a voice and are listened to and followed in the financial world. If you’ve read this rubbish and have-not begun in investing in precious metals as of yet, you’ve got to ask yourself the following question, what am I waiting for?.