Helicopter Money “Not on the Table,” ECB Swears Furiously

But it’s already here!

It has finally sunk in: what everyone really wants is helicopter money. Central banks, instead of transferring trillions of newly created dollars or euros or whatever to the banks should just hand them directly to the people, like dropping bank notes from a helicopter, so that these people can grab them and spend them all in one fell swoop, thereby creating sudden artificial demand, driving up inflation, and solving all economic problems of our times.

Instead of creating asset price inflation, as QE had done, it would create consumer price inflation. Wages would still remain stuck, and workers would soon not be able to buy the normal things at these inflated prices, but that wouldn’t matter because now they’re getting helicopter money, and companies could increase their sales, margins, and profits simply by raising prices without having to sell a single extra item.

Among economists, it’s the hottest idea of the century. But the ECB will have none of it. Or so it said today, on two different occasions, by two different officials, curiously using the same words.

“It’s not on the table,” ECB Executive Board member Peter Praet told a bunch of economists today who’d been pushing for an answer at a conference organized by the Center for Financial Studies in Frankfurt.

He hadn’t come to discuss helicopter money. His speech was all about rationalizing monetary policy measures that have become absurd to everyone except to those who’ve been drinking the Kool-Aid.

He was explaining how these measures — the negative interest rates, the more-than-free money where lenders pay borrowers, the purchases of bonds, including securities backed by Italian non-performing corporate debt, the whole schmear — would “ward off the risk of a too prolonged period of low inflation,” although low inflation benefits every worker in the Eurozone.

He was talking about “transmission channels” such as the “portfolio rebalancing channel” or the “direct pass-through channel.” The whole thing that “the ECB has adopted since June 2014 has been effective,” he concluded. It was the kind of ECB-congratulatory speech that every Executive Board Member has in their drawer to be pulled out on short notice.

The economists in his audience know all this stuff. They’ve heard it ad nauseam. So they pushed him on what they really wanted: helicopter money.

Milton Friedman first mentioned the “helicopter drop” of money as a thought experiment, rather than a serious policy. In 2002, Ben Bernanke, at the time a Fed governor, referred to the theme in a speech and has henceforth been called “Helicopter Ben.” At the time, it wasn’t a compliment.

But now economists are taking this thing seriously.

“It’s not even discussed informally,” Praet emphasized to his rapt but disappointed audience. They’d tasted the Kool-Aid, and it was so good, even though it hadn’t worked, or more likely had made things worse, and now they wanted something even stronger.

The New York Times, which reported on the conference, is already taking helicopter money seriously enough to delve into the mechanics of it, how it might be both illegal and hard to do in the Eurozone.

But handing out free money would not be easy. The ECB has no procedure for distributing cash fairly to the roughly 335 million people in the Eurozone. One mechanism might be to give everyone a tax cut. But that is probably illegal under Eurozone rules, which bar the bank from getting involved in member governments’ financing.

Also today, ECB Vice President Vítor Constâncio told the European Parliament that helicopter money was out of the question: “We are not considering anything of that sort,” he said. “So it’s not on the table in any shape or form.”

Note the repetition by both speakers of “not on the table,” perhaps a sign that this is a choreographed counterattack.

And yet, helicopter money has been around for years. It’s been tried across the world without being called that way, even in the US.

When President Bush signed the Economic Stimulus Act of 2008, he called it a “booster shot” for the US economy. It’s “large enough to have an impact, amounting to more than $152 billion this year, or about 1% of the GDP,” he said. That was in February 2008. A few months later, the Treasury started issuing rebate checks of $600 to individuals and $1,200 to married couples. Most adults got one whether they needed it or not.

At the end of that year, the Fed started printing money and buying up Treasuries, including those that had been issued to pay for these checks. Thus the loop was closed. Perfect helicopter money. It was so successful that the US ended up in the Great Recession.

But it sure was nice getting that free money! We loved it. Everybody loves helicopter money. Even tax rebates or tax cuts at a time when the central bank buys government bonds issued to fund the deficit is helicopter money.

If it really worked, humans could just rest on their laurels, and central banks could simply hand out freshly created money, directly or indirectly. It would solve all problems. It would even solve the most intractable unemployment problem because no one would have to work. That’s why, among some economists, it’s the hottest idea of the century.

One of the many effects of years of QE was a phenomenal boom in Mergers and Acquisitions. But now that boom has turned into the opposite. Read…  M&A Boom Implodes, US Deal Failures in 2016 Worst Ever

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  88 comments for “Helicopter Money “Not on the Table,” ECB Swears Furiously

  1. Michael Gorback says:

    Aha! The first AND second official denials. Look for the helicopters by the end of the year.

    • Bic says:

      Exactly! Here’s another way to do the drop. Give everyone on Social Security the cost of living raise they were denied at the beginning of the year and pay the arrears too. They can just say the official govt stats on inflation were wrong and revise (fudge) them higher.

  2. Derek Ross says:

    Helicopter money is a sticking plaster. It only works while it is being dropped. For a longer lasting intervention you need to drop it in the right place. And that is directly on existing debt. By all means give it out to every citizen. But with this condition: it must be used to pay down debt. And if any citizen still has some left after paying down their debt; or if any citizen has no debt to pay down, the extra must be put into an investment fund.

    This is the Modern Debt Jubilee suggestion of Professor Steve Keen. Done in this way helicopter money will have a permanent effect on the economy.

    • Wolf Richter says:

      You’re actually taking this seriously???

      People who can’t pay their debts need to default on them, thus hitting creditors who’ve already been paid (via interest payments) to take this risk. So it’s a fair deal.

      Your version simply is an indirect bailout of creditors (banks, etc.) with printed money. We’ve already had a slightly different version of this program, and look how well it worked!

      • Derek Ross says:

        I think it deserves serious consideration. It wasn’t my idea but I have thought about the ramifications and it seems a better solution than plain helicopter drops to me or the previous QE for creditors. Perhaps my conclusions are wrong but I have given it some thought.

        The problem with defaults for me is moral hazard. Big debtors get a major benefit, small debtors get a small benefit; those without debt get nothing and creditors suffer. I take your point that creditors may already have been paid enough to take the risk of getting nothing back. But it also may be that they have only been paid enough to compensate for waiting to get their money back, particularly with interest rates being as low as they currently are.

        The primary advantage of the Modern Debt Jubilee is that it ensures that everyone benefits about the same whether they are a debtor or a creditor. So no moral hazard issue. The secondary advantage is that it doesn’t have such an inflationary effect as a helicopter drop with no conditions.

        The previous direct bailouts did not reduce the debts of the entire system: they only reduced the debts of the banking system. As a result they effectively saved Wall St but not Main St. So QE worked really well for the people who got the money. It just didn’t work for those of us who didn’t.

        That’s why I think that the Modern Debt Jubilee would be more effective than the previous QE efforts. Because it would be QE for the Rest of Us. Sure, it would be an indirect bailout for the creditors. But it would be a direct bailout for us.

        • Paulo says:

          How about for the ‘rest of us’ who lived within their means and have no debt? Seems a little unfair to me.

        • robt says:

          General price increases are a symptom of inflation, they are not the cause of inflation. The government printing money to pay off citizens’ debt is pure inflation, which would inevitably result in general price increases. The government just printing money results in hyperinflationary outcomes such as Zimbabwe or Venezuela, no matter how the new money is spent.
          The resultant effect is that of moral hazard: if people have their debt paid off for them, their irresponsible management of debt will find them quickly in debt again while responsible individuals will have their savings destroyed by the effects of inflation.
          The only remedies for unmanageable debt are default/bankruptcy and hopefully lessons learned, or the sacrifice of present spending to pay off past spending.

        • Curious Cat says:

          Don’t know who said this – some guy a lot smarter than me. “Capitalism without bankruptcy is like Christianity without hell.”

      • jl says:

        CBs have Balance Sheets. With QE, newly created monetary base is registered on the Liability side of BS and the Treasury (or else) on the Asset side. Helicopter Money as you describe it creates an instantaneous loss on the CB: So either to make the Loss back Taxes will be raised one way or the other or the Loss will remain and very quickly CB Insolvency would quickly become a point of focus ! (they are insolvent already but nobody does focus on it). As such the Liability side would shrink a lot (aren’t we then close from the definition of Hyperinflation ?) and the Asset side too which is a crash of Financial Assets prices (starting with Govies…)

      • Dr. Bob says:

        The Guardian has published an article that “If the super-rich actually paid what they owe in taxes, the US would have loads more money available for public services”. “Perhaps one of the best solutions is also one of the oldest and simplest ideas: everyone should be guaranteed a small income, free from conditions.”

        • nhz says:

          most of these ‘basic income’ proposals are nonsense from freeloading socialists. My country is experimenting with such basic income without any strings attached. It is great mostly for the government bureaucrats, because now they no longer have to tell the ‘clients’ (often people who have never worked and have no desire at all to do so) that they have to look for work, everyone is happy.

          The problem is: the people who get this basic income already get loads of other subsidies and benefits (like heavily subsidized housing, tax exemptions, free sports/culture/vacations etc.) and they get to keep all these benefits. Without doing anything of value they have a standard of living that is way above those that work hard in a low wage job (because they don’t get heavily subsidized housing and all the other goodies).

          While the official basic income is something like EUR 1000 per month (a few dozen of cities are paying this, on a small scale only now), in reality one would need an income of about EUR 3000 per month (about the median wage here) to live at the same level as these freeloaders. The whole idea is extremely unfair and ultimately impossible.

          Fortunately the loads of immigrants are officially not yet entitled to such a basic income with no strings attached, but I guess it is only a matter of time. And in fact, unofficially they already have something very similar – free housing, free healthcare, no taxes and loads of money every month to splurge on clothes, food, booze, fun, gadgets etc. etc. Even then some of them have loads of money left every month to wire back to their ‘hostile’ homeland. Sure way to destroy an economy.

        • d says:

          Watch inflation make it impossible to, live on the free sum, very soon.

          Watch for the other benefits. to shrink and disappear, due to the free sum making them unnecessary..

          Have minimum tax levels been adjusted to relive the unequal burden on minimum wage earners yet.

      • John Doyle says:

        You are having trouble getting your head around this aren’t you Wolf?
        We’ve clashed before but you didn’t take on board what my reply was. Bankruptcies are for normal times, an intermittent event in such times. Something the system wears well but it’s not the future.

        Now we are getting to a point where it will occur en masse. All the usual remedies fly out the window. We are not there yet.
        Imagine if half the housing stock defaulted on the mortgages? The banks couldn’t afford to foreclose as there would be only buyers paying pennies, almost getting the houses for free.

        Banks could not survive this, and repeating the 2009 remedy even if directed to save banks instead of as stimulation would just drive the economy through the floor.

        A debt Jubilee would SAVE the Banks. They would take a big haircut to their income, but the asset base should survive. The mortgages would be written off, without recourse. Recall that money came from zero and to zero it would always return. It would always have done that, but now it would be instantly and all at once.

        Steve Keen goes into more detail, but this is my take on the issue.
        I could add more but that’s enough for now.

        • Wolf Richter says:

          The “debt jubilee” concept is silly. It turns into a big pile of propaganda when you keep posting that nonsense on my site. I get sick of reading it. Once was fine. Twice maybe. But by the third time, it’s over.

          Credit when it can’t be repaid needs to blow up, and the creditor (not everyone else) needs to pay the price because they got paid the premium (interest) to take that risk. Period. Printing money is NOT FREE! It costs everyone. I don’t know why you can’t gasp that. I don’t see why I should pay so that you (universal you) can get out of debt or that your bank’s investors are made whole.

          There are a lot of silly concepts out there. WS is not the place to spread that sort of propaganda time after time.

        • d says:

          Zealots with warped agendas, whether they be in Tehran, or hiding behind a computer in the West.

          Are the same, they are the problem.

          They are not interested in, and will not listen to, let alone consider, another point of view, hence the name, Zealot (AKA Jihadi).

          There is only one way of dealing with them, in the politically correct west, this position is Unacceptable.

          Much to the advantage of the Zealot, who Ultimately uses this method on all opponents..

        • ERG says:

          More ‘something-for-nothing’ lunacy that ignores ALL the real costs associated with following through with such an insane plan.

          While it plays into the con game of the government perpetually stealing our money then giving some of it back to us flamboyantly (at our expense anyway!), it is simply THEFT in a different flavor.

        • Dan Romig says:

          Housing stock is a nice generalized statement, but before the Wall Street Shuffle bundled ‘mortgage backed securities’, each home had its own mortgage. Ah yes, the good old days when you put down a large chunk of money, showed your income statements and signed on the bottom line to get a home mortgage. Banks and Savings and Loans lenders actually kept the note in house, and separate from other notes until the house was paid off or foreclosed due to lack of paying off the debt!

          Now that we’re in 2016, the facts remain the same, only the Wall Street Shuffle has obscured the details. To John and Derek: You take out a mortgage to buy a home. You pay off the mortgage, or the bank (mortgage servicing corporation nowadays) kicks you out of the house and forecloses. Do you want Uncle Sam to keep a roof overhead of those that quit paying what they owe?

          Life ain’t always pretty. Shi# happens to the Good, the Bad and the Ugly (spaghetti western reference), but as they say on the streets here in south Minneapolis, “Business is business!”

          Those of us who are content with a modest home that’s paid off should not subsidize those who have bitten off more than they could chew to live in a luxurious home! If the foreclosures cause “buyers paying pennies”, that there is how a free and open market works.

      • Petunia says:

        I’m with you on this one. The banks got paid for the losses they incurred on the bad mortgages and got to keep the houses too. That is the point that gets lost in the debate on the housing crisis. Had the owners been allowed to keep their homes, a tsunami of income would have been freed to enter the economy.

        Helicopter Ben knew what he was doing helping the banks. What he didn’t understand was the extent to which the middle class was living pay check to pay check. The middle class now has no way of making up the losses. This is going to end badly eventually. Just look at the political push back. If the people don’t get redress thru the political process, you can guess what comes next.

        • Tim says:

          And not a single prosecution for the mortgage fraud. Banksters don’t do jail time. The Greenspan Fed is painted with this forever, for failing to do their duty as overseer of lending standards, and supporting the mortgage fraud. Bank examiners could have stopped it early. The Fed knew it would end badly, because bankers all know what happens with lax lending standards and ‘low quality revenue’ as Jamie put it.

        • CV5 says:

          Maybe the banks do not want to take possession of these homes the value of which they themselves inflated to absurd levels via their accomplice and benefactor the FED. I am sure a debt jubilee or more QE freebies are both infinitely more palatable than reality and Mark to market.

      • Mark says:

        From Zero Hedge”
        It is widely known that in the past 6 months there has been a loud debate about helicopter money, i.e., giving out ordinary people (bypassing the banks) money directly printed by the Fed. What is less known is that when it comes to the most despicable underbelly of American society, cash to the tune of $1000 per month is already being “helicoptered” to some of the most brazen criminals living in the US today with one simple condition: “don’t kill people.”

        * * *

        Take the case of Lonnie Holmes, 21, who lives in Richmond, a working-class suburb north of San Francisco and whose four his cousins had died in shootings. He was a passenger in a car involved in a drive-by shooting, police said. And he was arrested for carrying a loaded gun. When Holmes was released from prison last year, officials in this city offered something unusual to try to keep him alive: money. They began paying Holmes as much as $1,000 a month not to commit another gun crime.

        • Jerry Bear says:

          Holmes should be executed as a public menace or permanently incarcerated in a max facility rather than rewarded for being a sociopath. If you want to help people like that you should train them and give them a useful job so they can be productive members of society. But all this should come with the understanding that if they screw up, that is it. no mercy whatsoever! I like the Chinese idea of the suspended death sentence. If you make sincere efforts at reform and are willing to become a useful member of society, it will eventually be removed. But if you screw up and continue your criminality, you will be taken to the local police station and receive a bullet in the back of the head.
          “The sentimental coddling of criminals represents the inability of a society to excrete.” Nietzsche

      • Jerry Bear says:

        My idea is to reverse the long standing trend to cut benefits on things like Social Security, food stamps Medicare, unemployment benefits etc. and increase them instead using QE type funding from treasury. This will increase the circulation of money without decreasing debt and directly stimulate the economy while taking advantage of existing distribution channels.

  3. QEternity says:

    Creditors will bleed the system dry and bone dead before they “accept” a debt jubilee. The bailout of AIG set the stage for what the future holds — save the banking system at any cost, including that of pension funds, retirement programs, old people, savers, and anyone else.

    My mother will be 90 soon, and we have her in nothing but cash. even there, it is a scary proposition in today’s world. I tell her she has lived during the best years of this country. Mostly because most of those years it wasn’t been blatantly looted by the FIRE economy.

    Today, as she is physically degrading, and completely losing her mind, I wish that she passes before her money does, so she will not end up in the hands of a system that made so many promises, but may be unable to keep them when she may actually need them.

    For my family and I, we expect nothing. If anything ever comes our way, it will be a bonus.

  4. Ben says:

    It all boils down to the fact that savers will lose their savings one way or another. Do we really mean to avoid the moral hazard of getting paid for not working or is it the actual midterm policy, not officially confessed, of course?

  5. d says:

    Like every other aid system.

    Those Who need it most the native homeless, will have no way of getting their hands, on any of it.

  6. Thomas Malthus says:

    Of course helicopter money is out there — the Fed has ramped up the stock market for 8 years now

    If you have a pension you have benefited from this.

    If you still have a job you have benefited from this.

    Without QE ZIRP we’d be eating boiled rat meat beneath underpasses long ago.

    QE ZIRP … IS… helicopter money… oceans of it.

    • CV5 says:

      The FED has bailed out their buddies. Any ancillary effects are meant to placate the masses while the villains make off with the booty.

      Wake up and smell the coffee. There is no Santa Claus.

    • nhz says:

      Don’t know about the US, but in Europe all homeowners with (big) mortgages have benefited hugely from ZIRP, NIRP and QE – and that certainly isn’t the 1%, in many countries this is a majority of the population (of the voters).

      I know ‘homeowners’ who are living in luxurious homes for just 200 euros a month, instead of e.g. 1000 euros after tax benefits some years ago (thanks to a mortgage at e.g. Euribor + 0.5%) while people who rent a similar home are paying through the nose with no tax benefits at all.

      The system is destroying everyone who tried to be responsible: save some money, live within your means. It rewards the parasites, the speculators and in general those who live far above their means. These bad incentives get worse every year and will ultimately destroy the economy and society. All thanks to the idiots at the central banks.

  7. Agnes says:

    Helicopter Ben referred to preventing deflation. The argument in the gold and silver community raged for months. Finally the consensus was that in a non-commodity based system(aka since 15 August 1971), what was critical for the FINANCIAL System was the availability of credit for businesses and the non-dependence on debt for individuals (I take full responsibility if i have not nuanced properly the work of those I respect greatly). Meanwhile, back at the Fed, they realized they could inflate as long as Perception Was Contained. IMO helicopter money might make the lemmings realize the steepness of the hill leading to the cliff and therefore will never be issued.

  8. Dave says:

    The people who are in charge have this system so screwed up it is beyond belief. ANY idea of something for nothing is a losing trade. This is desperation pure and simple. Buy physical silver and gold and keep it in a place where you have complete control over it. Protect yourself and what is yours. We are in an economic death spiral that will start slow and then pick up speed quickly.

  9. Chris says:

    Egomaniacs abound! CB’s think they can manage the world economies with exotic cocktails of money manipulation. The only thing they’ve managed is to run the global economy off a cliff (with the full backing of our governments, of course). Markets need to work themselves out in order to get healthy again. CB policies will not allow for this. In stead, they just keep the same bandage on the same infected cut. So, the situation just gets worse and worse. Imagine, expiring from an infected paper cut!

    • Petunia says:

      CBers don’t have any actual business experience and politicians are all lawyers and don’t have much more. We give these people to much credit and too much power. The banks should be regulated by the treasury department and overseen by a board which includes mostly business people and consumers. In reality the banks are just another utility, just like water, electric, and gas. A necessary evil.

  10. Mark says:

    This idea is sick to the bone.
    This is like taking piss all over me in front of entire neighbourhood insulting my intellect and all hard (smart) work to get myself educated, wealthy and debt free (practicing spending discipline).
    This is giving credit and money directly to all low lives to just continue more of what they been doing entire life.
    Well from now on I AM entirely in favor of eugenics theory, resources are limited and there is too many useless sheeple roaming Mother Earth . It is time to purge and flush the waste.
    I know many of you reading this will find yourself insulted, well this is exactly how I feel now reading that useless lazy buts might be rewarded for doing NOTHING.
    They have option of going bankrupt, so be it, but don’t tell me BS that they should be given more $$$ to keep “their standard of living”.

    • Petunia says:

      I feel the same way about people like you. How much of what you have did you actually make all by yourself? Not much I suspect. Do you realize that most of the people you hate for being poor got that way by getting sick. I know it is probably their fault for getting sick while living in America.
      In any case, good luck keeping what you have, they will also come for you if they need to.

      • Mark says:

        So America is country with 100 + million of sick people.
        Sick because they don’t move their assess. Don’t feel sorry, just one more point that system needs to be flushed.

        • Petunia says:

          I can tell you that living in Florida you can see that the poor are the low wage workers. Most of the illegals work, get food stamps and or welfare, and also free medical. All those poor people you hate so much work at Walmart and other low wage companies. No doubt you shop there or own the stock. Walmart is the real welfare queen in America.

      • Zoo keeper says:

        They got Obamacare.
        That will fix all, ha ha ha ha.

      • Mark says:

        Dear Flower
        I don’t hate anybody and I refuse to shop in Wal-Mart and support welfare queen of USA.
        As for illegals in your state blame your president and those who voted for him ( twice, the same people you feel so sorry about).
        I spent two weeks last year in Siesta Key and Sanibel Island and frankly did not see anything you talk about :)) Florida is beautiful place if you are in certain areas.

    • Tyler from Grand Rapids says:


      While I can’t ever quite get to the point of outright eugenics, the system as it is not is outright disgenics. You are rewarded for being a drain on society and eventually this leads to more and more takers being born from a limited and shrinking pool of producers.

      An interesting discussion on political though was the R/K theory of evolution applied to political thought. Not perfect but I’ve never read something that has come so close to explaining the differences in conservative vs liberal thinking.

      • Tyler from Grand Rapids says:

        Should have proof read….. but good enough lol

      • d says:

        Liberal thinking is flawed, in that they never game everything through, using all the variables, normally as they have not, the intelligence and patience to do so.

        Liberals dont need to, as they always have the power of the mob to force their way.

        Democracy in its present form, is flawed, deeply by this, as the leftist buy the mob with untenable promises of handouts and nothing gets better. Long Term.

        Sanders promises to brake up banks and give FREE university education, Among other FREE FREE FREE gifts to the takers, who support him.

        He can not tell the Media who first asked him some time ago. How he will do this, or more Importantly. How he will fund it, beyond trotting out the standard leftist.

        TAX THE RICH popular battle cry.

        He cant give a solid answer, with numbers, that balance, to the Question. As he does not have the answer. He has not even attempted to develop one.

        Hence communists, particularly chinese ones, having no respect for Mathematician’s. They have no need of them, they can win with the power of the TAKER MOB.



        Population management, based on every woman’s wright to A child. And approval to have more, based on other things the ability to full fund the care and education to Tertiary level of all existing and new children.

        Is a tenable and realistic method of reducing a global population that has untenable more than tripped since 1945.

        However Muslims, Indians, and Catholics will not cooperate in this to start with.

        See my other regarding Hijacking of Eugenics program’s.

        The planet is simply a gigantic farm the result of over stocking on 1 farm is horrendous.

        There can only be one, MASSIVE catastrophic result, when you overstock completely the only farm.


    • d says:


      Be careful, where, and how you go with this.

      Even if well managed, with good intent such programs, tend to be Hijacked by Racist Genocidal Maniacs which leads to Holocaust’s.

      They have plans drawn up for another one in Tehran. They will be happy to hijack and abuse any population management program they can.

      They have Agents in almost every country on the planet, for this among other reasons.

    • Jerry Bear says:

      you are aiming at the wrong target Mark. It is not the great majority of people who have tried to work hard their whole lives and be law abiding and be decent and caring and save for their children’s education and be responsible citizens that are the problem. The problem is the incredible looting and massive theft of the just wealth ands compensation by the ultra rich and the criminals on Wall Street that is the problem and you act totally oblivious and as if you are cut off from objective reality. We need to end the huge welfare state for the rich we have created and force them to pay their fair share of the tax burden and restore to the people the benefits that are justly theirs. Try not to hate America and despise the American people while you are at it.

  11. MC says:

    I strongly suspect “helicopter money” in any shape or form is where Germany will finally draw the line after years of going along with everything the Eurotower occupants could come up with, from NIRP’s to corporate QE.

    Plainly put the political situation in Germany right now is too delicate, too fragile, to give in to any more crazed schemes to stimulate consumer price inflation, something German voters hold in abject horror.
    Leaving everything else aside, Q1 2016 for German exports was if not atrocious, anything but encouraging. Exports to the BRICS and oil producing countries are swooning all around and tanking in others: cars and automotive components exports to China went down 26%.
    What do German companies do when orders go down? They do not fire people left, right and center. They do not renew contracts with seasonal workers and “manpower” agencies supplying them the extra labor to fulfill orders or “renegotiate”. Unions are satisfied since their members get to keep their jobs, but those workers finding themselves out of a job or working reduced hours and hence earning less or even far less are anything but satisifed.

    Dropping liquidity upon European consumers and hence driving inflation up is exactly the kind of thing that would have German politicians of all stripes running around with their hair on fire.
    If their constituents are already far from happy with QE, seen as a “gift” to fiscally irresponsible countries, imagine what would happen if the citizens of those countries would be given money to spend in return for nothing.
    Short term it could mean more sales for German firms, but in three-four months inflation would start rearing its ugly head: always remember an official 2% CPI figures means groceries and utilities go up twice or thrice as much, and those are the price increases ordinary people are truly concerned with. There already ominuous rumblings about the collapse in the price of natural gas not translating into real utility savings… imagine what would happen if the price of coffee, pork, cabbages etc started “picking up”.

    • d says:

      The bund will not allow it.

      Should the Mafiosi in charge of the ECB proceed over their objections, with the intent of feeding club med Economies soley on German tax payers money . Which is what helicopter ECB would be.

      Germany will be out of the Eur, and so EU overnight.

      Probably swiftly followed, by the rest of the northern Eu states.

      The Eur/and EU are heading faster to their fundamental conflict, Austrian economics, or brake up.

      Club med must decide, live under the same Economic rules as Germany and the north. Or form the Club med, Greece, Italy, Spain Portugal, union with France. Geography would force Cyprus and Malta into that union. Turkey geographically would end up with them, or do as Ergodan wants and turn to Tehran.

      The Mafiosi in charge of the ECB. Will bluster, he does not have the power to do, and will not ultimately be allowed to.

  12. Chicken says:

    The Italian bad bank program proposal seems to have not been mentioned here.

    • MC says:

      With all due respect, the big problem is nobody has a clue of how many troubled assets that “bad bank” will have to take over.
      Figures quoted by Italian media vary between themselves not by a couple billions, but by tens of millions.
      With such discrepancies, it’s pretty obvious European legislators are pretty nervous about the idea: they don’t want to greenlight a plan for, say, €80 billion of troubled assets and then being forced to go along as Italian banks turn the whole scheme into a dumping ground for all the NPL’s hidden in every nook and cranny.

      As nobody has an exact idea of how much money we are talking about (numbers seem to be revised every fortnight, usually upward), the issue will turn into a long haggling contest between Italian authorities and banks on one side and European legislators on the other.
      My gut feeling is the Italians will win out in the end, as it’s simply cheaper to build a toxic waste landfill than waiting for banks to get into troubles one by one or, even worse, in clusters, like it happened late last year.

  13. Brian Richards says:

    I can’t think of any historical precedent for “helicopter money” other than some Roman emperors distributing coins occasionally. If this actually comes to pass, it seems like the monetary end game is afoot. Wolf is right: creditors do their due diligence, and they are aware of the risks of loaning money. The borrower is usually aware of the risk of default. There’s a time honored method of resolving defaults. Assets change hands at lower prices. Creditors take a hit and the borrower moves on with their life.

  14. Lars says:

    Yes, the problem with Hellicopter Money is that it’s ‘money-for-nothing’, and next they’ll be wanting their ‘chicks for free’. This all leads ‘straight to hell’ in the long run. Just look at how the top honchos of the ‘big banks’ have behaved since 2008.
    The Debt Jubilee in idealistic concept is to allow the debtors and the lenders to ‘learn something’ and not repeat their past mistakes in future, while being ‘forgiven’ their mistakes now and not suffering for it, which may or may not be a good idea depending on how individuals take the ‘lesson’, and hopefully they won’t assume this ‘free pass’ will occur again anon in future.
    It all boils down to: How to evaluate a worker’s true value in wages; to penalize laziness, sloth and goldbricking, and justly reward the truly hard working workers who do a good job. And who will do the evaluation and what metrics will be used. (this goes for executives and CEO’s too)
    Free handouts mostly encourage beggars to keep begging.
    Income taxes on wages mostly disheartens workers, who believe that their labor belongs solely to them, as they are NOT property of their Government as percentage chattel slaves.
    Trickle Down Economics is a fallacy, because ‘free money’ trickles UP ! , not down.
    OK, here’s a thought on what might work. As some credit cards give you ‘reward points’ based on where you use your card. Let’s have a Central Bank credit card issued to everyone, (kind of like the National ID Card concept where everyone gets a card) and depending on where you use your card, you get some kind of ‘reward points’ that lower your percentage of how much you must pay back to the lender for their allowing you credit when you use the card. It could be a 100% reduction of payback for when used at certain places or on certain items. Or a 50% reduction in payback at other places, and a 0% payback reduction for certain uses. In this way, homeless folks could get food for free until they get back on their feet, or get a 90% reduction on rent, and rich folks could pay 100% for big screen TV’s and a Maserati. Well, it’s not a perfect idea, and needs other people’s thoughts for improvements of how to make it work smoothly and equitably, but that’s the gist.

  15. unit472 says:

    As noted Bush tried this in 2008. You only have to think it through to realize its a fool’s game. Imagine if some Central Bank really ‘helicoptered’ some serious ‘money” to people. Say a million dollars each. That would spur some demand wouldn’t it…if you could spend it!

    The reality would be similar to those mad rushes at Walmart to get a giant TV for $99 after Thanksgiving. I might head out to the Cadillac or BMW dealer to spend some of my ‘helicopter money’ but I’d better get their first and hope the dealership is open because the salesmen there might be out shopping for new house or boat. Factory floors would be deserted because who in the hell would want to go to work when they’ve got a million dollars to spend?

    • Mel says:

      That’s the essence of the Financialized Economy, isn’t it? With no money in the goods&services market, there’s no reason to produce because the stuff would never be sold. With money in the goods&services market, the money can all be soaked up by higher prices because the stuff there is is all the desperate people can buy; no reason to produce more. And any money that isn’t spent has to be invested in — finance.
      Without a political push by people who need to eat food and wear clothing and live in dwellings, nothing needs to happen.

  16. Tim says:

    There is another thing, which is bankruptcy law. Not everywhere has the same law as the US. I think European countries have some problems with this. If correct, a lot of the NPLs in Europe can’t be discharged, as the money laws are different there. Non-dischargeable (by bankruptcy) debt causes big problems, it can’t be gotten rid of, and so the insanity of helicopter money may be connected to other insanity, dysfunctional bankruptcy/money law.

    This could be worth checking out, as it could explain some things. My understanding from one economist is that the bankruptcy laws are different in Europe.

    Any way, many thanks to you, Wolf for so many interesting, insightful articles.

    • Wolf Richter says:

      Tim, I think you’re pointing at the problem of personal bankruptcy in some EU countries. And this is a valid point. Or was. I think they have reformed this meanwhile.

      But eons ago, when I was a kid, my favorite uncle went bankrupt with his hotel in Austria. He never could get his debts discharged. As a result, he never recovered from it. If he had gotten a real job, he would have had his pay docked by a huge amount every month. So he worked in the unofficial economy and lived off social benefits (including a nearly free if small apartment in Vienna with a beautiful view) that the state handed him. So society paid a big price for not discharging his debts, and his creditors never got a dime.

      But as I said, I think they reformed this. Maybe some commenters with current knowledge of how EU countries handle personal bankruptcy can shed some light on this.

      At any rate, the solution isn’t a debt jubilee but a reform of their bankruptcy laws.

      Corporate bankruptcy is entirely different since the owners are stockholders, and they’re not personally liable (unless they sign personal guarantees).

      • Tim says:

        Yes, the personal bankruptcy was what I was pointing to. I agree, legal/institutional reform is necessary, not money drops.

    • MC says:

      European bankruptcy laws have been largely modified, sometimes even radically changed, after 2012. All across the Continent the tendency is now towards adopting Chapter 11-style bankruptcy protection or similar instruments: for example in 2013 Germany introduced provisions that made possible converting debt into equity, a complete revolution over the previous system.
      Now, most of these laws were put together in a hurry due to the enormous number of companies going insolvent in 2012 all over Europe and will need a lot of uprading and fine tuning, which in countries notorious for slow legislative process (Belgium, Italy, Spain etc) means it may take years instead of months.

      Personal (or “Consumer”) bankruptcy laws, by contrast, are still geared towards a situation with low household leveraging ratios, where personal bankruptcy was relatively rare.
      Germany and Portugal offer discharge to the individual, but with many strings attached: only “honest debtors” can apply and procedure involves the transfer of disposable income to a trustee for a relatively long period (6 years for Germany and 5 for Portugal).
      Italy has a personal bankruptcy law since 2005, but it only applies to individuals with professional activities, the so called “free professionals”: here there’s no income transfer but the law requires at least parts of the debts to be paid during the proceedings, which usually means assets seizure.
      France has no laws dealing with personal insolvency, but has quite a few dealing with consumer overindebtedness, not unsurprising given France was the first European country to import US-style consumer financing. Here the key is negotiation with a arbitrating body called “Commission de Surendettement des particuliers”. If no agreement is reached, the Commission will propose to the competent court several measures to be imposed upon the debtor.

      I hope these few examples can help outline the difference between the Common Law and Napoleonic systems.

      • Tim says:

        That’s interesting. One I heard about is in the Baltics. For a loan, all the relatives have to co-sign. They have the non-discharge of personal debt on bankruptcy still on the books, I think.

      • Wolf Richter says:

        MC, thanks! Very helpful.

      • nhz says:

        I can assure you that the situation for people with too much debt is very different – far more attractive – in the Netherlands.

        Many Dutch citizens have huge debts as until recently the average mortgage was 110-120%; this is now gradually declining to 100%, so you still get money for taking out a mortgage, instead of needing a serious downpayment. Netherlands has one of the highest private debt levels worldwide. For people who have owned their home for a long time (purchased at much lower price than current value) it is easy to rack up huge debts thanks to the mortgage system and a 100% mortgage deduction from income tax (debt is fiscally extremely attractive).

        If people stop paying the mortgage – because their income declines due to job loss, divorce etc. or simply because they prefer spending the money on other stuff – they can go into ‘debt counseling’ which means some mandatory lessons in living within your means (a joke, as the whole system learns citizens to act irresponsibly) and for 3 years handing over all income above the minimum income level (often the problems arose because of loss of income or there are other claims on their income, so in practice this usually means nothing). They even can keep money in the bank up to 50K euro (if you have more, just make sure to hand it to a relative before thdebt counceling period), their expensive car, their big flatscreen etc. After three years all the debt is erased and people can apply for a new mortgage and restart the game (lenders cannot even see that they have effectively defaulted on their previous mortgage).

        In addition, most of the mortgages below a certain level (around 300K euro) also have special provisions that if you can’t pay due to loss of income, divorce or other ‘involuntary conditions’ and have to sell the home, you cannot ever make a loss – all losses will be paid for by a national mortgage warranty fund (a bit similar to Fanny and Freddy in the US, effectively one big pyramid scheme).

        So it is very attractive to rack up debt in your home, then claim job loss or divorce, erase all the debt and start all over for another round of big fun. There is massive abuse of the system, politicians know but of course they will never change this because it allows the housing bubble to keep growing and keeps the system going a bit longer.

        At the same time, bankruptcy laws for e.g. small business owners or renters with small debts can be extremely harsh, and I know people who have been in pending bankruptcy – living way below the social minimum – for many years.

  17. d'Cynic says:

    Helicopter money is the equivalent of calling air strikes on yourself when you run out of ammo, and are surrounded by a band of hungry cannibals. That is proof that the Eurobanksters are not going to use helicopter money.

  18. frederick says:

    “d” that North/South EU split is what Jim Willie has been preaching about for years and Wolf is correct about the debt “jubilee” nonsense What about those of us that have paid their mortgage and put their kids through school through hard work Wheres the outrage? Oh right TRUMP

    • d says:

      Where do you get the Idea that I support any form of debt jubilee?

      I dont, It will not work. It rewards bad behavior.

      It encourages foolish people to load up on interest only long term debt, in the hope of said insanity jubilee.

      Just like the madness of this helicopter FREE money. Allegedly at the bottom. It will miss those who most need help, the native Homeless of the states involved.

  19. Keith says:

    Life at the top:

    2014 – “85 richest people as wealthy as poorest half of the world”
    2016– “Richest 62 people as wealthy as half of world’s population”

    Doing the maths and assuming a straight line …….
    5.4 years until one person is as wealthy as poorest half of the world.

    Pretty good.

    Life at the bottom:

    How is the global consumer these days?

    1) The once wealthy Western consumer had most of their high paying jobs off-shored. As a stop gap solution they were allowed to carry on consuming through debt. They are now maxed out on debt.

    2) Japanese consumers have been living in a stagnant economy for decades.

    3) Chinese and Eastern consumers were always poorly paid and with nonexistent welfare states are always saving for a rainy day. Western demand slumped in 2008 and the debt fuelled stop gap has now come to an end.

    4) The Middle Eastern consumers are now too busy fighting each other to think about consuming anything and are just concerned with saying alive.

    5) South American and African consumers are busy struggling with economies that are disintegrating fast.

    Pretty bad.

    Why is demand so subdued?

    “The Marxian capitalist has infinite shrewdness and cunning on everything except matters pertaining to his own ultimate survival. On these, he is not subject to education. He continues wilfully and reliably down the path to his own destruction”

    Those at the top are always blind to who the consumers are that buy their products and services.

    When you have unfettered Capitalism and leave these people to their own devices, they destroy the system by keeping wages at a level that does not maintain a consumer society.

    Current solutions all involve getting money to the bottom of society that get around employers that will not pay high enough wages to keep the whole thing going:

    1) Raising the minimum wage.
    2) Keynesian stimulus, carrying out infrastructure projects that create jobs and wages which will be spent into the economy and trickle up
    3) Talk of helicopter money to the masses

    It’s all about (pumping money into the bottom of the economic pyramid) to increase spending and demand which can trickle up into the economy.

    There is a glut of investment Capital.

    US firms can’t think of anything else to spend their money on apart from share buybacks.

    Too much money at the top and not enough at the bottom.

    Old solution – redistribution through taxation and free public services to boost spending into the economy.

    • Thomas Malthus says:

      Why is consumer demand dying?

      Money is basically a representation of the a country’s recoverable resources – along with the resources it can pillage from other countries.

      We have consumed much of the recoverable resources – particularly oil. i.e. we have picked the low hanging fruit.

      A mining engineer explains this here https://www.youtube.com/watch?v=TFyTSiCXWEE

      We can print more money — but we cannot print more cheap to extract resources.

      So essentially there are fewer and fewer cheap resources to go around.

      More and more people are chasing a small resource pool.

      That falling resource pool gets more expensive as we move along the depletion curve and as we are seeing the lower and middle classes are getting crushed because of this…

      That is why the consumer is dying.

      For a comprehensive explanation of what is happening it is useful to read this research report that Tullet Prebon put in front of their investment and commercial banking clients are few years ago.

      Keep in mind — you obviously do not put something like this in front of clients – nor do you publish it in the FT.com — unless you are very certain of the conclusions.

      THE PERFECT STORM (see p. 58 onwards)

      The economy is a surplus energy equation, not a monetary one, and growth in output (and in the global population) since the Industrial Revolution has resulted from the harnessing of ever-greater quantities of energy.

      But the critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel.


      • Jerry Bear says:

        Technologically you are wrong. there was something of a crisis concerning whale oil in the 19th Century but it did not lead to a collapse of the U.S. economy but instead to the exploitation of kerosene, first from coal and later from petroleum. Our dependence on petroleum is entirely artificial and contrived and not due to any inherent technological reasons. We have enormous resources of untapped energy that are not fossil fuels. it is for political reasons, to protect the power and wealth of the petroleum industry that these resources are not developed. If you think we are currently living under conditions of free market capitalism you are quite wrong.

        • John Doyle says:

          He’s not wrong. The Simon Michaud video is very explanatory. No real cheap energy breakthroughs have come to light to allow us to kick the can a bit further down the road. Emphasis has to be on cheap.
          Even then energy is just one cog in the economy and many resources are marginal, even food production. You are hopeful something will come along to fill the gap, but that is pure wishful thinking. The reality of converting an economy to a new energy source is energy intense with existing fuels and we would be trying to do both at the same time.
          Forget it!

        • Thomas Malthus says:

          The thing is…

          People jump to conclusions without even watching the video.

          As you say – it’s is rather self explanatory.

          Anyone who cannot understand what he is saying simply does NOT want to understand.

          Because the implications are terrifying.

        • Thomas Malthus says:

          There is plenty of oil left in the ground. Massive amounts of it.

          But it is too costly to extract – and we have nothing else available that is less costly – nor which can replace oil http://www.ranken-energy.com/products%20from%20petroleum.htm


          According to the OECD Economics Department and the International Monetary Fund Research Department, a sustained $10 per barrel increase in oil prices from $25 to $35 would result in the OECD as a whole losing 0.4% of GDP in the first and second years of higher prices. http://www.iea.org/textbase/npsum/high_oil04sum.pdf

          For most of the last century, cheap oil powered global economic growth. But in the last decade, the price of oil production has quadrupled, and that shift will permanently shackle the growth potential of the world’s economies. http://www.bloomberg.com/news/articles/2012-09-23/how-high-oil-prices-will-permanently-cap-economic-growth


          Steven Kopits from Douglas-Westwood said the productivity of new capital spending has fallen by a factor of five since 2000. “The vast majority of public oil and gas companies require oil prices of over $100 to achieve positive free cash flow under current capex and dividend programmes. Nearly half of the industry needs more than $120,” he said http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/11024845/Oil-and-gas-company-debt-soars-to-danger-levels-to-cover-shortfall-in-cash.html

          You may have noticed that most producers are losing billions of dollars each and every quarter…

          They are also slashing capex and failing to grow their reserves.

          Effectively granny is tucking into her nest eggs to buy groceries now…

          But hang on you say — when the prices rise they will start looking for more oil…

          But the prices cannot rise – because as we see – that destroys growth.

          That said – there is no growth to destroy — even with oil at these low levels growth is not recovering…

          Why? Because the world it up to its eyeballs in debt incurred to try to offset the impact of very high oil prices that were the norm since they hit $147 in 2008 until the past year.

          THIS is the problem we are facing — everything else would be symptoms related to the decline of CHEAP to extract oil.

          I don’t see how anyone can refute this argument.

          And please please don’t tell me solar panels are the answer….

        • Jerry Bear says:

          That video is clever lying propaganda. the increasing poverty of the masses has nothing to do with “resource depletion” and everything to do with those at the top taking everybody else’s wealth. I think you are trying to excuse their crimes.

        • Thomas Malthus says:

          Propaganda? To what purpose?

          The guys is a blood and guts highly qualified engineer.

          Dr Simon Michaux has a Bach App Sc in Physics and Geology and a PhD in mining engineering. He has worked in the mining industry for 18 years in various capacities. He has worked in industry funded mining research, coal exploration and in the commercial sector in an engineering company as a consultant. Areas of technical interest have been: Geometallurgy; mineral processing in comminution, flotation and leaching; blasting; mining geology; geophysics; feasibility studies; mining investment; and industrial http://circulatenews.org/author/simonmichaux/

          I used to rant and rave about the stupidity of Bernanke… the corruption of government and the elites…

          And then I came across this research paper (which was put in front of investment and commercial banks a few years ago).

          And I had an ah ha moment.

          All the madness that I was railing against made complete sense.

          And soon after I moved to a remote part of the south island of New Zealand and set up a farm (which is probably going to prove futile due to the dire nature of the situation we are facing – but hey – the weather is nice and there is good skiing, hiking and mountain biking here)

          THE PERFECT STORM (see p. 58 onwards)

          The economy is a surplus energy equation, not a monetary one, and growth in output (and in the global population) since the Industrial Revolution has resulted from the harnessing of ever-greater quantities of energy.

          But the critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel.


          If you are prone to anxiety attacks or clinical depression – I suggest you not read that research and continue to believe that we are going through just another cycle as we have done many times in the past….

          Just continue to yell and scream at Janet and Mario ..

          Remember what Bernanke said when he walked… something like ‘I know many people hate me for what I have done – but when they understand why I did these things – they will thank me’

          Bernanke was fighting the end of growth due to expensive to extract oil. His every policy was aimed at a) propping up growth and b) allowing the expensive oil to continue to be extracted for as long as possible.

          The central banks have bought us over a decade now with magic tricks.

          But this is as good as it gets. They will of course eventually fail.

          And when it ends – remember Bernanke’s words.

        • John Doyle says:

          Looking at your blogs, I see you are using “Thomas Malthus” here and “Fast Eddie” in Gail Tverberg’s blog. Any others you care to admit?

        • d says:

          Changes names, nearly as fast as the working girls, renew their underwear.

          There are obvious reasons why he/she/it would do that.

        • John Doyle says:

          Do you have the New Zealand connection as well?

        • d says:

          I am there at the moment, be more specific.

        • John Doyle says:

          It’s not necessary. New Zealand is the common connection, so far. wth FE and TM. So you can add to it as well, depending on whether you just visit or whether it has become your domicile, like “them”.
          I am just across the ditch.

        • d says:

          I spend 5 months either side of said ditch and the rest else where.

          You may be famillar with 183 day laws on both sides , and how to use them depending on how you earn.

        • John Doyle says:

          You won’t be able to still do that when the crash comes. Will it matter where you end up?

        • d says:

          Yes I will.

          I have sail Boats. and have already made the Journey more than once.

          Secondly, in a real crash, Tax enforcement against the mobile not carrying trade goods will cease.

          Ocean going sail boats, are long term self sufficient environments.

          If there is Urban/Land based social unrest, simply sail away until the situation settles down.

          Nobody really examines how many layers, and what types of metal, are under those many chromed/polished fittings on boats. Even in india which has a huge gold smuggling problem.

        • Thomas Malthus says:

          I like your plan.

          I’ve often thought of purchasing an old retro-fitted fishing boat with loads of storage space — filling it with tonnes of non-perishable food and drums of diesel – then when the collapse hits – heading out to a quiet calm bay in the Marlborough Sounds – and just sitting tight and hoping the chaos at some point subsides.

          However I’ll not likely go that route as I have already established myself in a small farming community and set up shop.

          That’s about as much as I intend to do. In the meantime I’m pissing away what is soon to be toilet paper on bucket list trips every few months. And of recent – indulging a penchant for fast cars.

          That is the wonderful thing about understanding the end game. No stress. No worries about health. No worries about investing. No worries about retirement preparations.

          One has to find the positives in what is a very grim situation that will not have a Hollywood ending.

        • d says:

          Launches/fishing launches are fuel dependent. No fuel, becomes an uncontrollable wind driven island.

          Properly designed trimarans, as opposed to Yachts with outriggers on, 30 Ft and over, are What you want/need.

          Properly designed they will have two + permanent double beds, a full sized shower, forward cabin, rear cabin/engine machinery room, and access to the inside of the outriggers from the main cabin/deck area where ther will be at least 2 single accommodation and lots of storage space.

          Will easily do over 28 Knots safely under sail singel-handed and if they have ocean going bows, go anywhere.

          The usable deck space is huge.

          In a mono hull boat you need to go well over 40 Ft to get the same usable cabin areas. over 40’s get harder and more expensive to set up for single handed sailing.

          I regularly pass launches doing their maximum economical 14 Knots, like they are standing still with just the two forward self furler’s up, no kite or main. Real easy to tack single-handed like that.

        • Thomas Malthus says:


          However my idea was having enough space to store say a year’s worth of food and other gear.

          Need a pretty big sail boat for that…

          As for the issue of fuel – I hadn’t planned to go far. Just far enough into a remote part of the Sounds and drop anchor and wait to see what happens.

          The idea of towing a barge behind with diesel drums etc would also makes sense.

          One of the problems with a boat would be keeping warm. A gen set could be a saviour during the the few months of chilly weather in that area.

          In any event, the biggest problem is when this blows, what comes afterwards.

          Worth reading http://www.feasta.org/2012/06/17/trade-off-financial-system-supply-chain-cross-contagion-a-study-in-global-systemic-collapse/

        • d says:

          “However my idea was having enough space to store say a year’s worth of food and other gear.

          Need a pretty big sail boat for that…”


          You need surprisingly little space once you have the experience.

          That’s why trimarans are recommend, over 3 time the available storage space of an equivalent Mono Hull. And the deck area to securely store your long range fast dinghy.

          There are things called Fish, they live in the water under the boat, and follow it around. If there are no Fish, the Planet, has a VERY BIG problem

          If the shore gets ugly you need to go out of sight and day boat range of it. Until your radios start to tell you it is not so ugly, then you use your long range fast dinghy to check out the onshore situation. If those of evil intent on shore can see you, they will come and visit you.

          The Waters in the sounds, and Fiordland, like the bay of Islands, will see a sudden increase in population if things become ugly. As they are close and many are familiar with them.

          Now the Auckland islands, Campbell island. With no DOC or navy to come and harass you, with some livestock and root crops, you could happily hide down their forever. Plenty of safe Fiord anchorages on both islands. As google satellite will show you if you have never been there.

        • Thomas Malthus says:

          Sounds like a good plan.

          I’ve already made my bed so the boat is not an option …

        • Keith says:

          The best laid plans …….

          it was all going so well until you met Somali pirates.

          A British couple were enjoying themselves on their yacht back in 2009 ….

          “It is now three years since Paul and Rachel Chandler fell into the hands of Somali pirates and embarked upon nearly 400 days of living hell.”

          Start digging the bunker.

        • d says:

          What small boat sailor with any degree if sanity, goes anywhere near Africa, India, the Spice Islands, or the Malay peninsular. Or the eastern coast of south America.

          Stupid (White) people go to places where they are not welcome, and viewed as a free revenue source.

          Stupid people dont have pump action shotguns on their boats, as well as AK 47/AR 15’s. Yes international boats are allowed to have those things. Supervised storage costs (for AK/AR) in some states are expensive though.

          When I go to the Philippines I go from Eastern Au, via Guam, to lamon bay then around to Lingayen Gulf, and back the same way.

          Going to South America you go to Chile and Peru. If you go through the Caribbean you need to thread the needle between Columbia and Haiti as well. From Panama you stand well out until the Galapagos then drop down to Peru.

        • John Doyle says:

          That’s Dmitry Orlov’s plan. Maybe you’ll meet up?

  20. Central banks cannot simply offer unsecured loans, that is, money lent without collateral. Ordinary folks (unlike firms or banks) have no collateral to offer … so central banks are considering unsecured loans!

    Ordinary folks’ security is own funds on deposit in banks!

    Tthe central banks would loan the depositors’ own money back to them (which would then be loaned back to the banks as more deposits). A hundred-thousand dollars would become a hundred and ten thousand: instant inflation!

    The idea is currency debasement: the effective contra-strategy is to take the unsecured loans and buy gold …

    The reason the entire private finance system is insolvent is because they have made trillion$ in unsecured loans. Now the central bank wishes to imitate its commercial peers … what then, is the difference between the private firms and the central banks?

    Answer: there is none. The entire system is busted. Let the bank runs begin!

    • John Doyle says:

      This is mostly untrue. I wrote a rebuttal, but it hasn’t shown up yet.

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