E Frances Coppola On M And Helicopter Money

1. There is plenty more base money available.

2. The base money issued directly by the central bank is not deficit spending at all, being accompanied by the issuance of a perpetual bond or no bonds at all!

So, Frances Coppola is almost on board with helicopter money and Eric Lonergan explains it well:

Responsibly Expand the Monetary Base Before It's Too Late

The truth is, as Lonergan says at the end of this article, inflation targeting could still be accomplished if money is put directly into the hands of the people. I would say the truth is this, the average guys on the street are fed up drinking at the trough of borrowing. They don't like borrowing and banks don't like lending to them. 

Expanding M does nothing if it is for excess reserves or even for lending, if people don't want to borrow. But helicopter money would be the only successful use of M unlike all other increases in M that have left main street balance sheets in tatters. Frances Coppola, and others who are not opposed to HM, need to be convinced simply that this is not deficit spending. In the meantime, many thanks to her for her clear insight in opposition to asset inflation as a means of helping the broad economy. 

For further Reading:

Great Recession: Coppola's In Betweeners and Central Banks

 

 

 

 

 

 

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Disclosure: I am not an investment counselor nor am I an attorney so my views are not to be considered investment advice.

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