E Incoming Choppers: Inflation, Not Deflation, Will Surprise You

The Former Fed Chairman, Ben Bernanke, was recently in Japan telling their elites that the BOJ (Bank of Japan) still has weapons in its arsenal to use, i.e. helicopter money. It has been 30 years of deflation in Japan and low growth while trillions have been printed and borrowed and thrown at them. Clearly it is structural (demographics, debt cycles, etc) problems in Japan, not cyclical. But they won't admit that, because that puts their BOJ out of jobs. Kuroda (BOJ Chief) says that 'Helicopter Money ' will never happen in Japan. Just like he said there will be no negative rates 10 days before unleashing negative rates. This author has his doubts (100%). 

Contrary to the 99% of millennials, this author is unique in a sense: a cynic, gold-loving, anti-academic, empirical, and religiously skeptical. One day the central bankers will get their inflation. And hopefully it won't be too late for an entire generation to learn about inflation and the difference between 'real' and 'nominal' returns. 

Until then, one truly has to wonder if these former central bankers and finance ministers end up quitting because they see more opportunity and easy money in bonds, equities and currency trading. 

I have a hunch.

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Gary Anderson 3 years ago Contributor's comment

Nice article, except that real #HelicopterMoney won't need treasury bonds, which are already in short supply as collateral for derivatives. Real helicopter money would just involve base money, even if Bernanke and others don't quite want to face that kind of real helicopter money.