Mario Draghi va-t-il faire pleuvoir des euros ? / article de “La Tribune” jeudi 24-mercredi 30 avril 2016

logo-la-tribune

EN – I recently posted several times about the ECB reflexion and temptation to use in the future what we call “helicopter money”, an expression of Milton Friedman. I just noticed a third article about this idea in the well-know weekly French newspaper “La Tribune” today. It’s an interesting article about QE for people or helicopter money included in the most recent issue of La Tribune.

FR – J’ai récemment publié plusieurs fois au sujet de la réflexion et tentation à la BCE d’utiliser dans le futur ce qu’on appelle “la monnaie hélicoptère”, une expression de Milton Friedman. Je viens juste de remarquer aujourd’hui  un troisième article sur ce sujet dans l’hebdomadaire français très connu “La Tribune”. Il s’agit d’un article intéressant à propos de l’assouplissement quantitatif destiné aux particuliers, ou monnaie hélicoptère, inclus dans le dernier numéro de “La Tribune”.

The Government wants to give you free cash

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CASEY DAILY DISPATCH - Casey Research

The Government Wants to Give You Free Cash

Could the government start handing out free cash?

It sounds crazy. But believe it or not, it’s a real possibility. In fact, an Ivy league economist just predicted it will happen within five years…

If you’ve been reading the Dispatch, you know the Federal Reserve has used crazy monetary policies to “stimulate” the economy since the 2008 financial crisis. These policies have been huge failures. After seven years, the U.S. economy is barely growing.

Yet, instead of acknowledging its failure, the government is preparing to double down. And its friends in the lapdog media think it’s time for “helicopter money.”

•  Yesterday, The Wall Street Journal published an article titled, “The Time and Place for ‘Helicopter Money’”…

It was the top story in The Wall Street Journal’s “Economy” section.

Economist Milton Friedman coined the term “helicopter money” in 1969. He suggested the government could drop free cash from helicopters to stimulate the economy. People would collect the money and spend it. The economy would grow as a result.

Friedman likely never took this cartoonish idea seriously. For a long time, hardly anyone else did either.

•  But The Wall Street Journal argues helicopter money could jumpstart the economy…

Of course, the government wouldn’t actually drop bills from a helicopter. Instead, it would print money and mail checks to people…or deposit the money directly into people’s bank accounts.

People would instantly become “richer.” Then they would buy more televisions, cars, and homes. This would goose the economy, according to The Wall Street Journal.

•  Financial media giant Bloomberg agrees…

Yesterday, it published an article titled, “Milton Friedman’s ‘Helicopter Money’ Is Looking Less Crazy.” According to the author, “helicopter money feels very much like an idea whose time may be coming.”

Central bankers and Ivy League economists like the idea. Mario Draghi, who heads the European Central Bank, recently called it a “very interesting concept.”

Richard Clarida, an economist at Columbia University, thinks we could see helicopter money within five years.

•  Helicopter money is rooted in bad economics…

It’s based on the idea that spending fuels the economy. Casey Research founder Doug Casey explains why this is false.

It’s part of the Keynesian view, in which spending and consumption drive the economy. This isn’t just wrong, it’s the exact opposite of what’s true. It’s production and saving that drive an economy. You have to save to build capital, and capital is necessary for…everything. What these people are doing is destructive of civilization itself. And when we go into the next crisis, governments will use the disastrous results of their own policies as excuses to enact even more destructive versions of the same things.

•  The U.S. government’s other “stimulus” measures have failed miserably…

After the 2008 financial crisis, it borrowed huge amounts of money. Acting through the Federal Reserve, it created 3.5 trillion dollars out of thin air. And the Fed has held its key interest rate near zero for seven years.

These extreme measures were supposed to help the economy. But the U.S. economy is growing at the weakest pace since World War II. The real median household income is lower today than it was in 2007.

•  The Fed’s reckless policies did accomplish one thing…

They caused stocks and bonds to soar. The S&P 500 has more than tripled over the past seven years. It hit an all-time high last May. Prices for bonds also hit record highs. Because stocks and bonds soared while the real economy barely grew, we call this the “Alice in Wonderland” economy.

The Fed has set us up for disaster. Doug Casey explains:

These reckless policies have produced not just billions but trillions in malinvestment that will inevitably be liquidated. This will lead us to an economic disaster that will, in many ways, dwarf the Great Depression of 1929–1946. Paper currencies will fall apart, as they have many times throughout history.

Recommended Links

A Young Woman on Her Way to Lunch… (What Happens Next Is UNBELIEVABLE)
She was on her way to lunch… Walking down the street in plain daylight. And then… THIS happened. If you do one thing today, please take a look at this outrageous video. It’s unlike anything you’ve ever seen.

An Important Warning Before You Buy Gold
It doesn’t matter how much research you do. It doesn’t matter how many newsletters or reports you read. It doesn’t matter how many investment conferences you attend, or how many “experts” you watch on TV. There is only ONE THING that matters when it comes to making big money in gold stocks. Learn what it is, and why we think it could hand you 500% gains…but only if you fully understand it, right here.

•  Gold is your best defense against reckless governments…

As the ultimate form of money, gold has preserved wealth for centuries. Gold is money because it’s durable, divisible, easy to transport, has intrinsic value, and has consistent form around the world. And unlike paper currencies, the government can’t print gold and hand it out to people.

Once people realize the government has set us up for a financial catastrophe, bubbles in the stock, bond, and commercial property markets will pop. Investors will flock to gold. We expect this to ignite a “gold mania” that will dwarf the recent seven-year rally in U.S. stocks.

•  Gold stocks will soar…

Dispatch readers know gold stocks offer leverage to the price of gold. A 200% jump in the price of gold can cause the average gold stock to rise 400% or more. The best gold stocks can soar 1,000%…2,000%…or higher.

Physical gold is your defense against destructive governments. Gold stocks are your “offense.” They’re a way to make big profits on government stupidity.

However, gold stocks aren’t for everyone. They’re extremely volatile. It’s common for a gold stock to rise or fall 10% in a day. If you don’t want this kind of volatility, stick with physical gold. Doug expects the price of gold to at least triple from current levels.

But if you’re interested in the huge profit potential of gold stocks, try a risk-free trial to International Speculator, our service dedicated to finding gold stocks with huge upside. For a short time, we’re offering it for $500 off the regular price. When you sign up, you’ll get instant access to our new special report, 9 Essential Gold Stocks to Buy Right Now.

Now is the perfect time to take a position in gold stocks. If you’ve been following the Dispatch, you know the fund GDX, which tracks large gold miners, has already rallied 52% this year. But it’s pulled back significantly in the past few days, giving us a good entry point. Click here to take advantage of the incredible opportunity in gold stocks.

Chart of the Day

It’s never been harder to make money in government bonds…

Today’s chart shows the total value of government bonds outstanding by interest rate. As you can see, nearly 90% of these bonds yield less than 2%. And 29% of them—for a total of $7 trillion—have negative interest rates.

Negative rates sound bizarre to most people. With negative rates, youpay interest on bonds you own. It’s a perversion of saving and a perversion of capitalism. Negative interest rates could only exist in a world with idiot politicians in control.

The European Central Bank and Bank of Japan are trying to stimulate their economies with negative rates. They think negative rates will encourage people to spend money.

So far, it’s been a huge failure. Like the U.S., Europe and Japan are growing at the slowest pace since World War II.

Pourquoi la BCE ne rechigne pas à vous verser de l’argent gratuitement (article de BFM Business)

Puisque les banques rechignent à investir dans l’économie réelle, Peter Praet, l’économiste en chef de la banque centrale européenne, n’écarte pas une piste étonnante: “l’hélicoptère à monnaie”. En clair, donner directement de l’argent aux ménages et aux entreprises. Possible, mais pas sans risque.

Quantitative easing for People instead of only QE for banks (public bonds) and large companies (high quality corporate bonds)

Deux articles récents, l’un de BFM Business sur le QE pour les particuliers ou le concept développé par Friedman sur l’helicopter money. L’autre est d’un think tank privé organisé par Doug Casey, dans des newsletters “international man” auxquelles je me suis inscrit suite à des lectures de l’hebdomadaire anglais “the economist”.

International aborde tout un tas de sujets (en anglais) mais généralement, la newsletter est centrée sur les matières premières, le risque inflationniste, la faible valeur intrinsèques de monnaies principales, comment éviter les impôts, et comment obtenir plusieurs nationalités rapidement pour, lorsqu’on est un homme d’affaire, se réfugier derrière plusieurs droits et protections consulaires et en bougeant les actifs d’un pays à l’autre, en utilisant les paradis fiscaux également.

Vous trouverez ci-joint une copie de la publication de Doug Casey sur la possibilité d’un QE for people à venir. Deuxième confirmation de cette possibilité, après un article intéressant, et documenté, sur BFM Business, une chaine française consacrée à l’économie et la finance.

http://bfmbusiness.bfmtv.com/observatoire/pourquoi-la-bce-n-exclut-pas-de-vous-verser-de-l-argent-gratuitement-960217.html

The Government Wants to Give You Free Cash

Could the government start handing out free cash?

It sounds crazy. But believe it or not, it’s a real possibility. In fact, an Ivy league economist just predicted it will happen within five years…

If you’ve been reading the Dispatch, you know the Federal Reserve has used crazy monetary policies to “stimulate” the economy since the 2008 financial crisis. These policies have been huge failures. After seven years, the U.S. economy is barely growing.

Yet, instead of acknowledging its failure, the government is preparing to double down. And its friends in the lapdog media think it’s time for “helicopter money.”

•  Yesterday, The Wall Street Journal published an article titled, “The Time and Place for ‘Helicopter Money’”…

It was the top story in The Wall Street Journal’s “Economy” section.

Economist Milton Friedman coined the term “helicopter money” in 1969. He suggested the government could drop free cash from helicopters to stimulate the economy. People would collect the money and spend it. The economy would grow as a result.

Friedman likely never took this cartoonish idea seriously. For a long time, hardly anyone else did either.

•  But The Wall Street Journal argues helicopter money could jumpstart the economy…

Of course, the government wouldn’t actually drop bills from a helicopter. Instead, it would print money and mail checks to people…or deposit the money directly into people’s bank accounts.

People would instantly become “richer.” Then they would buy more televisions, cars, and homes. This would goose the economy, according to The Wall Street Journal.

•  Financial media giant Bloomberg agrees…

Yesterday, it published an article titled, “Milton Friedman’s ‘Helicopter Money’ Is Looking Less Crazy.” According to the author, “helicopter money feels very much like an idea whose time may be coming.”

Central bankers and Ivy League economists like the idea. Mario Draghi, who heads the European Central Bank, recently called it a “very interesting concept.”

Richard Clarida, an economist at Columbia University, thinks we could see helicopter money within five years.

•  Helicopter money is rooted in bad economics…

It’s based on the idea that spending fuels the economy. Casey Research founder Doug Casey explains why this is false.

It’s part of the Keynesian view, in which spending and consumption drive the economy. This isn’t just wrong, it’s the exact opposite of what’s true. It’s production and saving that drive an economy. You have to save to build capital, and capital is necessary for…everything. What these people are doing is destructive of civilization itself. And when we go into the next crisis, governments will use the disastrous results of their own policies as excuses to enact even more destructive versions of the same things.

•  The U.S. government’s other “stimulus” measures have failed miserably…

After the 2008 financial crisis, it borrowed huge amounts of money. Acting through the Federal Reserve, it created 3.5 trillion dollars out of thin air. And the Fed has held its key interest rate near zero for seven years.

These extreme measures were supposed to help the economy. But the U.S. economy is growing at the weakest pace since World War II. The real median household income is lower today than it was in 2007.

•  The Fed’s reckless policies did accomplish one thing…

They caused stocks and bonds to soar. The S&P 500 has more than tripled over the past seven years. It hit an all-time high last May. Prices for bonds also hit record highs. Because stocks and bonds soared while the real economy barely grew, we call this the “Alice in Wonderland” economy.

The Fed has set us up for disaster. Doug Casey explains:

These reckless policies have produced not just billions but trillions in malinvestment that will inevitably be liquidated. This will lead us to an economic disaster that will, in many ways, dwarf the Great Depression of 1929–1946. Paper currencies will fall apart, as they have many times throughout history.

Recommended Links

A Young Woman on Her Way to Lunch… (What Happens Next Is UNBELIEVABLE)
She was on her way to lunch… Walking down the street in plain daylight. And then… THIS happened. If you do one thing today, please take a look at this outrageous video. It’s unlike anything you’ve ever seen.

An Important Warning Before You Buy Gold
It doesn’t matter how much research you do. It doesn’t matter how many newsletters or reports you read. It doesn’t matter how many investment conferences you attend, or how many “experts” you watch on TV. There is only ONE THING that matters when it comes to making big money in gold stocks. Learn what it is, and why we think it could hand you 500% gains…but only if you fully understand it, right here.

•  Gold is your best defense against reckless governments…

As the ultimate form of money, gold has preserved wealth for centuries. Gold is money because it’s durable, divisible, easy to transport, has intrinsic value, and has consistent form around the world. And unlike paper currencies, the government can’t print gold and hand it out to people.

Once people realize the government has set us up for a financial catastrophe, bubbles in the stock, bond, and commercial property markets will pop. Investors will flock to gold. We expect this to ignite a “gold mania” that will dwarf the recent seven-year rally in U.S. stocks.

•  Gold stocks will soar…

Dispatch readers know gold stocks offer leverage to the price of gold. A 200% jump in the price of gold can cause the average gold stock to rise 400% or more. The best gold stocks can soar 1,000%…2,000%…or higher.

Physical gold is your defense against destructive governments. Gold stocks are your “offense.” They’re a way to make big profits on government stupidity.

However, gold stocks aren’t for everyone. They’re extremely volatile. It’s common for a gold stock to rise or fall 10% in a day. If you don’t want this kind of volatility, stick with physical gold. Doug expects the price of gold to at least triple from current levels.

But if you’re interested in the huge profit potential of gold stocks, try a risk-free trial to International Speculator, our service dedicated to finding gold stocks with huge upside. For a short time, we’re offering it for $500 off the regular price. When you sign up, you’ll get instant access to our new special report, 9 Essential Gold Stocks to Buy Right Now.

Now is the perfect time to take a position in gold stocks. If you’ve been following the Dispatch, you know the fund GDX, which tracks large gold miners, has already rallied 52% this year. But it’s pulled back significantly in the past few days, giving us a good entry point. Click here to take advantage of the incredible opportunity in gold stocks.

Chart of the Day

It’s never been harder to make money in government bonds…

Today’s chart shows the total value of government bonds outstanding by interest rate. As you can see, nearly 90% of these bonds yield less than 2%. And 29% of them—for a total of $7 trillion—have negative interest rates.

Negative rates sound bizarre to most people. With negative rates, youpay interest on bonds you own. It’s a perversion of saving and a perversion of capitalism. Negative interest rates could only exist in a world with idiot politicians in control.

The European Central Bank and Bank of Japan are trying to stimulate their economies with negative rates. They think negative rates will encourage people to spend money.

So far, it’s been a huge failure. Like the U.S., Europe and Japan are growing at the slowest pace since World War II.

Regards,

Justin Spittler
Delray Beach, Florida
March 23, 2016

ECB flexes its muscles in effort to silence doubting voices, FT, 11/03/2016

Paying institutions to lend is novel, even for policymakers used to rolling out shock-and-awe plans

CLAIRE JONES — FRANKFURT

   Central bankers were once celebrated as the miracle workers of the global economy, but many people wonder whether they have lost their magic powers.   Central banks’ efforts to save the global financial system from collapse might have worked but, despite ultra loose monetary policy, growth and inflation remain weak and in the eurozone unemployment remains painfully high.   Yesterday, the European Central Bank set out to dispel the doubts about its potency, with a set of measures aimed at helping ordinary businesses and consumers as much as markets.   The ECB’s big idea to silence the doubters is an auction of their cash that will, if it works, in effect involve central bankers paying banks to lend to businesses and households. Policymakers are praying these auctions, dubbed Targeted Longer-Term Refinancing Operations, or TLTROs, will finally produce the meaningful recovery that the single currency area craves.   “The ECB has designed its suite of measures to have the most impact on activity,” said Karen Ward, chief European economist at HSBC Investment Bank. “[It] has changed the emphasis of its actions from depressing the exchange rate and relying on external demand and higher import prices to trying to fuel the domestic recovery by nurturing the banks to support credit growth.”   Mario Draghi, ECB president, hopes the package will quash any scepticism that central banks can only boost asset prices with limited benefit for the wider economy.   The ECB now had a package that would “exploit the synergies” between asset purchases and ultra-low interest rates, and the new auctions. He added that the new measures were “favouring pass-through from the banking system to the real economy”.   While the ECB beat expectations by ratcheting up its monthly bond buying under quantitative easing by €20bn to €80bn, markets were downbeat, possibly because Mr Draghi became the latest central banker to express doubts about just how low interest rates could go. Hints the ECB did not anticipate further rate cuts — at least for now — sent the euro higher and stocks lower.   Another round of downgrades to the central bank’s staff projection underlined why the ECB decided to change tack and focus on boosting lending to the economy instead. In its latest quarterly forecasts, the ECB said it expected inflation of just 0.1 per cent this year. If the estimate is right, 2016 will be the third year in a row that inflation in the eurozone has registered less than half the ECB’s target of just below 2 per cent.   Inflation would remain below target at least until 2018, coming in at 1.3 per cent in 2017 and 1.6 per cent in the following year. The eurozone’s economy would grow by 1.4 per cent this year — hardly the sort of level that will produce a jobs boom, and by 1.7 per cent and 1.8 per cent in 2017 and 2018 respectively.   The idea of the auctions was presented by officials this morning and the package was supported by all bar four of the 25 member governing council in what Mr Draghi described as “a very reassuring discussion”. Under the ECB’s system of rotation only two dissenters had votes this month.   The big question is whether banks, businesses and households will bite.   The ECB will hold four auctions — one a quarter from June 2016 to March 2017. Banks can bid for cash of the value of as much as 30 per cent of their loan book. At most, they pay nothing on the four-year loans, which they will not have to pay back until 2020 at the earliest. But if the banks lend more, then the ECB will pay them up to 0.4 per cent interest on the lenders’ loans with the central bank.   Paying private banks to lend is novel, even for a generation of monetary policymakers used to rolling out shock-and-awe measures. Yet earlier designs of the TLTRO were touted as game changers and in the end proved much less effective than ECB hoped.   In a region drained of confidence, businesses and households might not want to borrow. Or banks could use the funds to invest in financial markets instead of expanding their loan books, pumping up asset prices but leaving the eurozone economy flat.   “While [the new TLTRO] is clearly groundbreaking, it remains to be seen whether it will work,” said Carsten Brzeski, chief economist at ING-DiBa. He added: “The ECB is clearly determined to keep on fighting. Admitting impotence does not seem to be an option.”