[Home]  [Headlines]  [Latest Articles]  [Latest Comments]  [Post]  [Sign-in]  [Mail]  [Setup]  [Help] 

Status: Not Logged In; Sign In

You Know What Happens Next

Cash Jordan: Half-Built Tower Abandoned… as ICE Deports Entire ‘Migrant Workforce’

Heavy rainfall causes flash flooding Tuesday night, some cars stuck in high water on Chicago's West

Biden Doctor PLEADS THE FIFTH, Refuses To Testify To Congress, Biden Pardons ARE VOID

Joe Rogan says FBI director Kash Patel played him for a fool and maga for fools with the Jeff Epstein files

Elon's AI System "Grok" Went Rogue And Has Been SHUT DOWN in an Emergency!

Earthquake Swarms at One of the MOST DANGEROUS Volcanoes in the USA

Ben Shapiro Declares Epstein Case CLOSED: ‘Facts on the Ground Have Changed’

Iran receives 40 Chinese J10-C Fighter Jets

China’s Railgun Is Now Battle-Ready, Thanks to Nuclear Power

Chinese Hypersonic Advancements! Deadly new missile could decimate entire US fleet in 20 minutes

Iran Confirms Massive Chinese HQ 9 B Missile Deal

Why Is Europe Hitting 114°F And Still Rising?

The INCREDIBLE Impacts of Methylene Blue

The LARGEST Eruptions since the Merapi Disaster in 2010 at Lewotobi Laki Laki in Indonesia

Feds ARREST 11 Leftists For AMBUSH On ICE, 2 Cops Shot, Organized Terror Cell Targeted ICE In Texas

What is quantum computing?

12 Important Questions We Should Be Asking About The Cover Up The Truth About Jeffrey Epstein

TSA quietly scraps security check that every passenger dreads

Iran Receives Emergency Airlift of Chinese Air Defence Systems as Israel Considers New Attacks

Russia reportedly used its new, inexpensive Chernika kamikaze drone in the Ukraine

Iran's President Says the US Pledged Israel Wouldn't Attack During Previous Nuclear Negotiations

Will Japan's Rice Price Shock Lead To Government Collapse And Spark A Global Bond Crisis

Beware The 'Omniwar': Catherine Austin Fitts Fears 'Weaponization Of Everything'

Roger Stone: AG Pam Bondi Must Answer For 14 Terabytes Claim Of Child Torture Videos!

'Hit Us, Please' - America's Left Issues A 'Broken Arrow' Signal To Europe

Cash Jordan Trump Deports ‘Thousands of Migrants’ to Africa… on Purpose

Gunman Ambushes Border Patrol Agents In Texas Amid Anti-ICE Rhetoric From Democrats

Texas Flood

Why America Built A Forest From Canada To Texas


Business/Finance
See other Business/Finance Articles

Title: Janet Yellen Warms up the Helicopters
Source: [None]
URL Source: [None]
Published: Jun 30, 2016
Author: Michael Covel
Post Date: 2016-06-30 18:48:17 by BTP Holdings
Keywords: None
Views: 82

Janet Yellen Warms up the Helicopters

By Michael Covel

Look, up in the sky! It’s a bird! It’s a plane! No, it’s… it’s… Janet Yellen in a helicopter with bags of cash.

No kidding. That’s the Fed’s plan when the next recession hits. The Fed’s Dear Leader coming to the rescue with airdrops of free cash for everyone. What could possibly go wrong?

At a recent press conference, Federal Reserve Chairwoman Yellen admitted that the Fed would consider using “helicopter money” in an extreme downturn. What’s “helicopter money”?

It’s a phrase used to describe when governments print massive sums of money and then “drop” them on the economy… hoping for the best. Sound insane? It is.

But they’re just trying to help by “stimulating” the economy… or what you could call their “Friends and Family Plan.”

But doesn’t economic growth come from savings and investment? Silence.

Today, you can supposedly create real economic growth right out of thin air. Just print the money and start giving it away for free. It’s fake money of course, but we pretend it’s real. See how easy it is to hoodwink the masses?

To comfort the proletariat, Yellen said that “helicopter money” would only happen in “abnormal” circumstances. Kind of like the “abnormal” zero interest rates (soon to be negative) that we’ve had for an “abnormally” six-plus years. Abnormal is clearly the norm now.

To comfort the proletariat, Yellen said that “helicopter money” would only happen in “abnormal” circumstances.

In other words, count on it. Helicopter money is coming the moment the S&P 500 takes a serious downturn.

Ever since the dotcom bubble, the Fed and other central banks have tried to force banks to lend more to spur economic growth coming out of financial crises. What if the growth is fake or unsustainable? No matter. Pay for it another decade. They started with zero interest rate policy (ZIRP). But that money hasn’t gone out into the real economy. It’s remained with the banks.

And what a great deal for them! They borrow for zero then use the cash to make billions scalping every day using high-frequency trading.

When ZIRP didn’t force people to invest in Timbuktu condos, central banks in Europe and Japan moved to negative interest rate policy (NIRP). The thinking goes that NIRP would surely force people to borrow, spend and buy those Timbuktu condos instead of paying interest on their savings.

Think about how crazy all this is. Force average citizens to choose between paying interest on their savings or investing in casino investments engineered by the central banks to collapse at any moment. But none of this is working — whatever the hell “working” means to people like Yellen.

Savings rates in NIRP countries are actually going up. And in Japan, fearful citizens have started hoarding cash. The Japanese are buying safes in record numbers? You bet. So what do you think people will do when Yellen makes like Santa Claus and starts handing out free money? Do you think that will instill confidence in consumers to spend more as opposed to saving for what they instinctively know is a coming meltdown? Do you think the Fed’s actions will encourage companies to make additional capital investments in their businesses instead of hunkering down for the collapse they also know is coming?

“Helicopter money” is the Fed signaling to the world: “Yeah, we’ve lost control. We have no idea what the hell we’re doing.”

Since the financial crisis in 2009, central banks have printed $12.3 trillion of money and made 654 interest rate cuts to support the global economy.

What do we have to show for it?

Well, it’s obviously been great for Wall Street billionaires and stock indexes. But the rest of the experiment has been a huge bust. It’s devastated those who rely on interest income for survival. Plus, we now have $200 trillion in worldwide debt, asset bubbles galore and stagnant global economic growth. Usually, when the sink is overflowing, smart people turn off the faucet. But the Fed is looking to increase the water flow.

And if the Fed doesn’t come up with a new scheme to artificially goose the economy after NIRP failure, what’s the alternative?

A massive deleveraging of credit, a stock market collapse and a prolonged recession. A clearing out of the excesses of the business cycle used to be normal. But do you think Yellen & Co. are going to let “normal” happen on their watch? As soon as the U.S. economy slips into recession, it’s only a matter of time before the debasement of paper money will continue unabated.

And more people will be looking for the safety of gold as they have in recent months. Gold surged to a three-year high last week.

I don’t prefer chaos. But if it’s going to happen, you should be ready… long before you hear the sound of helicopters in the sky.

Regards,

Michael Covel

for The Daily Reckoning


Poster Comment:

Where's my money?

Post Comment   Private Reply   Ignore Thread  



[Home]  [Headlines]  [Latest Articles]  [Latest Comments]  [Post]  [Sign-in]  [Mail]  [Setup]  [Help]