E Hope For The Real Economy, Pigou Effect, TLTRO Helicopter Money

While Lonergan is not specific on the nuts and bolts of the resulting policy toward the retail household, it appears that the banks could use that base money to offer perpetual zero interest loans or other innovative financing to help households and non financial businesses, in other words, the real economy.

I will be watching for more information on the outworking of this program as it effects the retail consumer. I hope we will get more from Eric Lonergan as the program unfolds. Base money in the hands of the people would create wealth and would not burden governments and would not simply swap one set of assets for another as QE does.

For further reading:

Targeted Longer-term Refinancing Operations 

Can QE Rescue the Eurozone (Video)

Fed Tricksters, Put Your Monetarism Where Your Mouths Are

Wikipedia Pigou Effect

Wikipedia Arthur Cecil Pigou

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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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