For many bad reasons he chooses this weapon. First, it requires no Congressional approval which suits his dictatorial bent. Second, he falsely believes that if he raises the price of imports, multinational companies will return to the US and produce there. No company is going to move from a $5/hr wage country to a $30/hr wage country to manufacture. We are hearing of US multinationals moving from China to other low-cost Asian nations, so Trump will eventually place tariffs against Thailand, or Taiwan. Third, he believes it can bludgeon a trading partner into submission .." trade wars are easy to win". He falsely believes that the Chinese government is responsible for Apple producing iPhones in China when it was all along a corporate decision to move to a low-cost producer. The late Steve Jobs was once asked by Pres. Obama when those Apple jobs in China return to America. Jobs told him point blank " never".

It is a figure of speech, envisioning that a helicopter flies over the country and drops dollar bills for people to pick up freely. The term is used to suggest that what is needed is for every individual to receive free dollar bills in the expectation that he/she will spend all the money, save nothing, and in this way stimulate growth. It is a desperate attempt to get people to spend and grow the economy.

Tariffs are used in countries that are in a state of nascent industrialization, 3rd world countries, to promote domestic industry. The tariffs are applied on luxury items and non-essential consumer products, not on basic materials used in developing their industry. Tariffs are used by these countries to promote import substitution and help promote the creation of a domestic industry.

Now, in the case of the US, none of these conditions apply. The US gave up a long time ago on producing consumer products because it became a high-wage, high -cost producer of consumer and industrial goods. Tariffs were never meant to support high cost producers, but nascent industries.

My real concern is the EU where fiscal stimulus is badly needed and so far has been rejected by Germany, the leader of the pact. It will be interesting to see how soft the German economy becomes before they are forced into fiscal stimulus.

i do support helicopter money. It is simple, straightforward and effective. The US could try an approximation of helicopter money with a massive cut in payroll taxes. But I gather that the political climate is not there for this idea.

A tariff is not inflationary but a one time jump in the price of a product. Thereafter it has no impact on future prices. Tariffs are deflationary over time because the permanent upward shift in the price level reduces demand over demand from what would have been in the absence of the tariff. This is what driving financial markets lower,

What exactly is " monetary fraud" by a central bank? How does work and who is defrauded?

Your analysis is spot on. The issue of margin compression and zombie-like behaviour is probably the biggest fear in the US banking system, although it goes unspoken. How long the US can withstand the wave of negative rates washing over Europe and Japan is probably just a matter of time.

Arthur

I am in full agreement

Perhaps a target of nominal GDP would be better, implying Keynes' s money illusion is the key variable.

A much s implier and effective approach to setting monetary policy.

The Fed should recognize that it does not matter which component of NGDP....price or volume. Now the Fed has keep three data points in view...GDP, prices and unemployment. One tool to solve three equations.

Arthur

"At its recent policy meeting, the Bank of Canada held its key policy rate unchanged, citing the same slower world growth and trade concerns expressed by the Federal Reserve". Does that mean the the BoC would raise interest rates if trade concerns were no longer out there? Why did the BoC not move down---because it believed that growth was going to be strong?