Are central banks (BOJ, EU and USA) setting up the biggest crash ever?

[Toddsterpatriot]

I am hoping that the MMT people are right......otherwise we're screwed.

In that case all but the last two words of your post are unneeded. MMT was a major and critical factor in the collapse of LTCM. Ignoring the bail out on the bail our by Bear Stearns and Lehman Brothers going light at the LTCM pass out has been mentioned as a failure of MMT that led to/caused the melt down.

MMT was a major and critical factor in the collapse of LTCM.

How do you come to that conclusion?

 

[Gary Anderson]

It's obvious by now Krugmanomics of stupidly priced credit issued by central banks is just setting up the planet for the biggest failure in human history.

Japan is its THIRD FULL DECADE of a slump, have dropped rates to ZERO and is only causing more grief as citizens are literally stuffing their cash in home safes. The BOJ is the largest issuer/purchaser of debt in the country, is drowning their country in debt and choking off sane investment. AND KRUGMAN JUST TOLD THE GOVERNMENT TO SPEND AND BORROW EVEN MORE!

China is in a slow motion collapse that will probably end in world war. They are liquidating their reserves and borrowing another years worth of GDP just to stay afloat.

The EU is also in stupidland with essentially 0% financing and their economies are all stuck

During Obama's Reign of stupid, the US has borrowed an extra years worth of GDP and only has an inflated stock market to show for it.

This must end very badly, there no graceful exit and the Central Banks KNOW they're setting up a global economic collapse, unprecedented in history. There's no one left to bail anyone out! The lender of last resort are all tapped out.

It's intentional too

You guys know there is a solution to all of this. You can get off the negative mat through Helicopter Money. Now, please listen. Helicopter money is not QE! Helicopter money is a direct infusion of base money as a payment to all the people equally. Helicopter money, when understood correctly (and some central bankers do not understand it correctly), does not require increasing the debt, the bond issuance in exchange for the money. It is not a tax cut, so the government remains funded and the GDP will not drop.
Eric Lonergan Precisely Defines Helicopter Money

 

[CrusaderFrank]

It's obvious by now Krugmanomics of stupidly priced credit issued by central banks is just setting up the planet for the biggest failure in human history.

Japan is its THIRD FULL DECADE of a slump, have dropped rates to ZERO and is only causing more grief as citizens are literally stuffing their cash in home safes. The BOJ is the largest issuer/purchaser of debt in the country, is drowning their country in debt and choking off sane investment. AND KRUGMAN JUST TOLD THE GOVERNMENT TO SPEND AND BORROW EVEN MORE!

China is in a slow motion collapse that will probably end in world war. They are liquidating their reserves and borrowing another years worth of GDP just to stay afloat.

The EU is also in stupidland with essentially 0% financing and their economies are all stuck

During Obama's Reign of stupid, the US has borrowed an extra years worth of GDP and only has an inflated stock market to show for it.

This must end very badly, there no graceful exit and the Central Banks KNOW they're setting up a global economic collapse, unprecedented in history. There's no one left to bail anyone out! The lender of last resort are all tapped out.

It's intentional too

You guys know there is a solution to all of this. You can get off the negative mat through Helicopter Money. Now, please listen. Helicopter money is not QE! Helicopter money is a direct infusion of base money as a payment to all the people equally. Helicopter money, when understood correctly (and some central bankers do not understand it correctly), does not require increasing the debt, the bond issuance in exchange for the money. It is not a tax cut, so the government remains funded and the GDP will not drop.
Eric Lonergan Precisely Defines Helicopter Money

Helicopter Money is the Grand Finale of the Failure of Keynesian Economics. To even say "Helicopter Money" out loud and think you're serious shows how desperate the NIRPs have become

 

[Gary Anderson]

Helicopter Money is the Grand Finale of the Failure of Keynesian Economics. To even say "Helicopter Money" out loud and think you're serious shows how desperate the NIRPs have become

No, you don't understand it. It avoids NIRP, therefore you don't understand it.

 

[william the wie]

Helicopter Money is the Grand Finale of the Failure of Keynesian Economics. To even say "Helicopter Money" out loud and think you're serious shows how desperate the NIRPs have become

No, you don't understand it. It avoids NIRP, therefore you don't understand it.

Bush 43 tried it to a limited extent one time after 9/11 and the results were so bad that it was not tried after the meltdown. If memory serves it was a few hundred/household.

 

[CrusaderFrank]

Helicopter Money is the Grand Finale of the Failure of Keynesian Economics. To even say "Helicopter Money" out loud and think you're serious shows how desperate the NIRPs have become

No, you don't understand it. It avoids NIRP, therefore you don't understand it.

It avoids NIRP because the government just prints the money- for free!!

Why Jeez, why doesn't ever economy run on this great idea of yours?

 

[Gary Anderson]

Helicopter Money is the Grand Finale of the Failure of Keynesian Economics. To even say "Helicopter Money" out loud and think you're serious shows how desperate the NIRPs have become

No, you don't understand it. It avoids NIRP, therefore you don't understand it.

Bush 43 tried it to a limited extent one time after 9/11 and the results were so bad that it was not tried after the meltdown. If memory serves it was a few hundred/household.

This would come from Fed base money. It would not be taxed. It would be significantly more than the 500 dollar Bush rebate. It would not result in a shortfall in government revenue.

 

[Gary Anderson]

Helicopter Money is the Grand Finale of the Failure of Keynesian Economics. To even say "Helicopter Money" out loud and think you're serious shows how desperate the NIRPs have become

No, you don't understand it. It avoids NIRP, therefore you don't understand it.

It avoids NIRP because the government just prints the money- for free!!

Why Jeez, why doesn't ever economy run on this great idea of yours?

It can't be done all the time. If you had read the article you would have seen that Lonergan seeks a 12 to 18 month window, when we are threatened with NIRP, as a means to bounce the economy off the mat. The money would continue to circulate. As it is, we have the treasury issuing bonds, and the banks exchanging those with excess reserves that sit at the Fed and do nothing. Helicopter money is a much better idea. It is not based on debt.

 

[Gary Anderson]

And actually, it is not Keynesian at all. It is monetarist.

 

[william the wie]

Significant helicopter money would result in major disinvestment as in 1973-82. Worse yet the disinvestment would be targeted at human capital just as it was during the Great Inflation meaning that employment would decline while prices climbed. This is one of the great problems with using the Hicks model and its derivatives since it excludes increasing returns industries such as computer chips until recently and LEDs, biotech, robots and 3D printing now. This failure of the neo-classical model has been causing increasing problems since the late 1800s.

 

[Gary Anderson]

Significant helicopter money would result in major disinvestment as in 1973-82. Worse yet the disinvestment would be targeted at human capital just as it was during the Great Inflation meaning that employment would decline while prices climbed. This is one of the great problems with using the Hicks model and its derivatives since it excludes increasing returns industries such as computer chips until recently and LEDs, biotech, robots and 3D printing now. This failure of the neo-classical model has been causing increasing problems since the late 1800s.

Helicopter money has never been tried as a monetary policy before.

 

[william the wie]

I deem that less important than the fact that increasing the monetary base has not led to the desired outcome ever. With all due respect to the late uncle Miltie he never demonstrated or even proposed a hypothesis as to why this would work as opposed to being less political than other methods. All the attempts to reduce distress from illiquidity fail to account for the following.

The economy is chaotical and therefore also fractal. I am unaware of any economist who has attempted to compute the fractional exponents that drive the economy and without that it is an impossibility to determine if the economy is or is not in a singularity or even if it has come out of one.

Data collection costs exceed the value of the data collected. For example, initial GDP growth figures turn out to have an error rate of +/- 1.3% so at growth rates of less than 6.5% GDP/qtr uncertainty is massive when first published.and the US probably has the lowest uncertainty of any trillion or greater economy.

Increasing returns industries like Watt's steam engine that was born in the same year as modern economics cannot be identified much less accounted for except in the rearview mirror.

You will notice I am not saying you are wrong but there is no body of data to support your conclusion nor any body of data to refute your position either.

 

[PredFan]

They aren't setting us up for a crash. That is something they would rather not have. Rather they are protecting themselves and prepareing a way to screw the regular folk if the crash comes.

 

[IsaacNewton]

No one is 'orchestrating' anything. If the worldwide economy collapses to a degree seen during the 1929 crash you will see many populations around the world revolting. For people with wealth that is the last thing on their list of things they want to see. Even ahead of going broke because during a revolt the people usually kill the wealthy and redistribute the wealth and start over.

I doubt there is a 'huge' crash coming. We are due for more adjustments and the governments of the world, namely the US, is going to have to address the national debt and start it back the other way. There isn't an option.

 

[william the wie]

They aren't setting us up for a crash. That is something they would rather not have. Rather they are protecting themselves and prepareing a way to screw the regular folk if the crash comes.

A secondary but still important objective is not getting caught out. Goggle, Amazon and Facebook produce much more and higher quality data than the bureaucracy who depend on institutions set up in the 20s and 30s like NBER to tell them what is going on.

 

[Gary Anderson]

I deem that less important than the fact that increasing the monetary base has not led to the desired outcome ever.

True, but that is because it has always been funneled the the banks and the elite. Helicopter money, sans purchasing bonds, is base money funneled to the people. It would be used to prevent NIRP and a cashless society. That is a worthy use of it.

 

[Toro]

I cringe when I hear academics talk about helicopter money. It would probably mean the end of the monetary system as we know it. Germany would leave the eurozone and the Federal Reserve would, at the very least, have its powers curtailed, if not reconfigured.

 

[Gary Anderson]

You don't understand Helicopter Money, Toro. You are a bull in a China shop on this issue. You do understand that the proper manifestation of helicopter money is entirely debt free in its application. It is not a fiscal policy, but rather a monetary policy with positive fiscal results. http://www.talkmarkets.com/content/economics--politics-education/responsibly-expand-the-monetary-base-before-it-is-too-late?post=93323&uid=4798

 

[EdwardBaiamonte]

but rather a monetary policy with positive fiscal results.

why not explain?

 

[Gary Anderson]

why not explain?

Well, people like Bill Gross think that helicopter money is QE, which is where banks trade bonds with the Fed for cash created out of nothing. Well, why not have cash created out of nothing without taking scarce bonds out of circulation? Why not have it help the average person? No bonds involved. No fuss, no mess. When you take bonds out of circulation and keep them at the Fed, bond yields go down even more!!! And we are trying to avoid negative bond rates and a cashless society.