Only #MiltonFriedman can fix this with his understanding of #HelicopterMoney. But of course, modern monetarists don't trust him like they should. He is gone, but he could have established a real stimulus.

Failure to get enough cash into the hands of labor is a major failure of central banks. Time for #HelicopterMoney as Kyle Bass has warned.

The only other option is the issuance of #HelicopterMoney or 100 year #bonds, or perpetual bonds. Perpetual bonds have been issued by the government of the US before.

Articles like these set back the true understanding of what #HelicopterMoney really is. It is not deficit spending. It is a monetary action, not a governmental action. www.talkmarkets.com/.../helicopter-money-is-being-misrepresented-by-bill-gross-and-others Having said that, Old Mitch in the senate seems cool to big deficit spending.

Interesting read, thanks. While I'm familiar with the concept of #HelicopterMoney, how much actual cash would be required to test this theory? How many dollars would actually be transferred to each person? It would need to be significant enough to have an impact on the economy, yet not so high as to bankrupt the country.

And real #HelicopterMoney should have nothing to do with credit as it should be in the form of a gift of base money to all the people equally. And it should not be repeated once off the negative. 2 percent #inflation is never reached, and really declining GDP and declining inflation along with new demand for #bonds sets the stage for deflation, not inflation. But libertarians don't fear #deflation because they think it was what caused the 1921 depression. But there never was a credit crisis in 1921. Real deflation is bad, very bad. So far growth is slow, perhaps that is what gold bugs have always wanted, but it gives rise to a demagogue running for president.

Only #JimGrant would lump #HelicopterMoney with negative interest rates. The goal of helicopter money is to push us off of negative interest rates. I am disappointed in his analysis.

Gary,

I appreciate the thoughtful reply. While bonds presently have a higher rating than gold, I don't believe this will be true several years down the road. Furthermore, there are a shortage of bonds, because of the massive #liquidity injections by #CentralBanks. Bonds can be in short supply when Central Banks print money to buy them.

Actually, the #Fed and Central Banks are running out of assets to buy. This is why several analysts believe the next Central Bank BULLET will be outright #HelicopterMoney.

Lastly, the production of energy is different than comparing outstanding #EnergyDerivatives to the Interest Rate Derivative Market. While it's true that the Interest Rate Derivative Market totally overwhelms anything else by several orders of magnitude, I would like to kindly remind you financial instruments are worthless without the burning of energy. Burning #energy translates to economic activity. Profitable economic activity translates to a functioning financial system.

When U.S. and global expensive oil production declines in earnest, this will cause a serious dislocation in the Financial System that will result in collapse. Unfortunately, this will be a depressionary collapse we never come out of.

Of course.. this is my humble opinion.

Steve

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.

Well, the real economy could use a little helicopter money, precisely doled out in a short time period. Why #ZeroHedge would be against helping the real economy simply because it views DB as being disingenuous is hard to figure out. Real #HelicopterMoney is base money stimulus and goes directly to the people, without bond swapping or any fiscal drag on government. It would make a lot of sense, and it beats #NIRP and #ZIRP. If Zero Hedge has a better idea, let's hear it. One point, though, how much it pushes yields up could be hard to determine, since demand for bonds won't wain for collateral. Zero Hedge has written about this collateral issue, and it could present a problem as long bonds are the most highly rated collateral, more highly rated than #gold itself.

#EricLonergan says real #HelicopterMoney does not involve the treasury or the use of bonds and government debt at all. This must be done by the Fed, not by the treasury, to be most responsible, as to government fiscal policy.

Nice article. #HelicopterMoney appears to be quite illegal in Japan. So, even perpetual bonds, with zero interest rates, would be a form of helicopter money that may be illegal as well. We would have to see the bonds to believe they would ever exist. Real helicopter money, as defined by Eric Lonergan, would help the real economy worldwide. But it requires an unsterilized expansion, one time only, of base money. I can't see Japan seeing that as being "clean". I wrote about it in my last article.

Thanks, Gil. We are hoping that people realize the most responsible approach is #HelicopterMoney, not the futility we see with QE.

We need real #helicoptermoney because #QE is incredibly fiscally irresponsible. It is interesting in your article, that negative was once thought of being a stimulus, and now it is just a way for governments to collect taxes off poor bond holders.