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Business/Finance See other Business/Finance Articles Title: What does Rahm Emanuel have to do with Brexit?... “You never want a serious crisis to go to waste.” That deathless phrase of Rahm Emanuel, former Obama stooge and current Chicago mafia boss, could soon be vindicated. Enter Brexit, the crisis du jour… Gold bug, tireless pessimist and Gloom, Boom & Doom Report editor Marc Faber was on Bloomberg yesterday. Here’s what he had to say about Brexit and not letting a serious crisis go to waste: “Global growth has contracted... growth rates have been reduced and many countries are in recession already. That has nothing at all to do with Brexit.” But here’s the meat: “If Brexit is used as an excuse, the central banks will print more money [and] QE4 in the U.S. is on the way.” Whoa! Could Faber be right? Will the Fed take another handsome fling at quantitative easing, using Brexit as an excuse? (Added bonus: They could point at Brexit voters and sputter, “Look what you ninnies made us do! It’s all your fault!”) (Added bonus: It would give them another reason to point at Brexit voters and sputter, “Look what you ninnies made us do! It’s all your fault!”) Maybe it is coming. Morgan Stanley just hiked their odds of a global recession within the next 12 months to 40%. But unlike Faber, the folks at Morgan Stanley are not sold on another round of QE. The central banks are out of rope. And now populist movements are seizing territory in Europe and the U.S. So they think politicians might start trying to spend their people into prosperity: “Such a step would fit with the fact that monetary policy is very close to its limits and that most populists are promising to bring back a bigger government sector.” On that note, our friend Chuck Butler raised an interesting point in this morning’s Daily Pfennig that hasn’t gotten a lot of attention: This was something that slipped under the radar screens this week, and is just now being talked about… The Federal Reserve “might legitimately consider” using public money creation in “extreme circumstances,” when there is “very weak growth” or “deflation,” Fed Chairwoman Janet Yellen said earlier this week at a press conference. “Public money creation.” En Anglais: “helicopter money.” Continue, Chuck: Public money creation, using central bank money to directly finance spending in the real economy, has been taboo for over 50 years. In accepting that the central bank of the world's biggest economy might have to create money to stimulate the real economy, Yellen is implicitly suggesting that central banks might need to update their tool kits. Uh-oh. Uh-oh is right: When a central banker "mentions something," they do it to grease the tracks. At some point down the road, the Fed is going to implement helicopter money (they won't call it that, but we all will know what it really is). And when they do, Yellen will be able to say, "Well, I told you several months ago that we could use this if we needed to. And we need to." Jim Rickards already ran that flag to the top of the mast. He’s been saying for months that helicopter money is coming. Will Brexit be the catalyst? Below, Michael Covel shows you why Janet Yellen is already warming up the helicopters. Read on... Regards, Brian Maher Managing editor, The Daily Reckoning Post Comment Private Reply Ignore Thread
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