Dollar-in-the-air

STAFF NEWS & ANALYSIS
Forget QE Through Banks, The ECB Now Wants To Directly Hand Out Cash
By Daily Bell Staff - March 22, 2016

The lords of finance are losing their touch.  Institutions which dragged the world from its worst depression since the early 20th century are finally seeing their magic desert them, if conventional wisdom is to be believed.  –UK Telegraph

We have read a deluge of mainstream media articles about central banking problems and the article quoted above is no exception.

When the mainstream media trumpets something all at once, we have learned from experience that it signals something of significance.

Central bankers are changing the institution dramatically and offering consumers a good deal more “benefit” from the central banking mechanism itself.

This means a push for “basic income.” That means – quite literally – giving away money to whole populations.

That’s what central bankers are setting up to do via “helicopter money” and the issuance of “electronic” money.

Once the process is in place, governments can pass the enabling legislation. Of course, no one is admitting it right now. The reason for helicopter money and electronic money is to stabilize the monetary system.

But that’s not really true. This is “directed history” at work.

From the article:

Faced with political intransigence, central bankers are openly talking about the previously unthinkable: “helicopter money”.

A catch-all term, helicopter drops describe the process by which central banks can create money to transfer to the public or private sector to stimulate economic activity and spending.

Long considered one of the last policymaking taboos, debate around the merits of helicopter money has gained traction in recent weeks.

The article goes on to remind us that top ECB banker Mario Draghi just this past week “refused to rule out the prospect” of helicopter money.

Is all of this a coincidence? As we just reported HERE, central banks have embarked on a campaign of further monetary control.

The idea is that negative interest rates, cashless societies and a “basic income” will combine to make central banks a good deal more integral to people’s daily lives than they are now.

For instance, we’ve reported on RSCoin, which is a central bank variant bitcoin and is being actively considered for use by the Bank of England. Other variants are being considered elsewhere.

These central bank bitcoin variants are likely to be issued directly by the central bank, which will receive payment in turn directly from buyers.

Thus central banks will go into the business of commercial and consumer banking.

Combine a banking bitcoin with helicopter money and you essentially have a distribution method for a “basic income.”

And a basic income may be necessary if central banks continue to offer negative interest rates. It’s a way to compensate people for increasingly ludicrous and costly central banking policies.

We mentioned that the third part of this central bank strategy is the basic income, but we never fully explained how it fit together.

Cashlessness is a program generated by negative interest rates because people will try to take their funds out of banks and put their wealth in cash.

So central bankers must confiscate cash.

People will be increasingly incensed by cash confiscation and negative interest rates. But by offering people a “basic income,” central banks may be able to alleviate anger.

After all, people will see the money as “free” for the most part. In such an instance, people will also be likely to accept reasons that central banks have confiscated cash and imposed negative interest rates.

A basic income may be central to pacifying people regarding the many other dramatic changes that central banks are trying to introduce via the governments they work with or control.

None of the choices faced by central bankers are especially “safe” ones. As we predicted years ago, after the crash of 2008, the top men running these banks had no idea of how to defend them.

What we didn’t understand fully at the time, but do now, is that the dialectical system utilized by Western elites accommodates even the most significant failures in the system.

And failures there are because, in fact, the system itself is built to fail. It’s supposed to be unstable.

People have a hard time understanding this but if the system is not constantly in motion, dialectical solutions become much less necessary to an outside observer.

The current system is incredibly unstable. It has in fact become unstuck. And – suspiciously – the mainstream media is quite vocal in recognizing its instability and lack of credibility.

This means a change is coming – a directed one. The change may be twofold.

First of all, central banks will likely be simplified and their proponents will try to turn them into digital banks serving the general public.

Secondly, the movement toward state ownership of central banks pioneered in the modern era by Ellen Brown and Bill Still may well take hold.

This would be a way of deflecting the current anger based on the impression that many central banks are privately owned and operated – by the same elite groups.

Once money is being disbursed by banks directly to consumers, organizing a political facility around it is not difficult.

Certainly the PR need is there. We predicted that the Internet would gradually destroy the credibility of major Western facilities – those entrenched there through force and operated by a handful of elites – and that’s just what is happening.

Conclusion: Bribing the public with “free money” to ignore other authoritarian actions – like confiscating cash – is a terminally corrupt concept. The system is growing worse at an exceedingly rapid pace and will certainly fail, sooner or later, with disastrous consequences.  Look to yourself, and to your friends and family for the lifestyle and living solutions you need, not centralized, bureaucratic programs – no matter how tempting they seem.

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  • Danny B

    “So, says Altman, why not find out now if a
    regular paycheck from the government turns people into dregs or makes
    them more entrepreneurial, whether it boosts their spirits or diminishes
    them?”

    Read more:
    http://www.smithsonianmag.com/innovation/when-robots-take-our-jobs-should-everyone-still-get-paycheck-180958483/#oOB2XHBLTm49BiaV.99

    “In late January, Altman announced that Y Combinator will be doing its own research—specifically
    a five-year project in which a random group of people “who are driven
    and talented, but come from poor backgrounds” will be provided with a
    basic income.”

    This idea somewhat reflects when musicians or painters sought patronage from aristocrats to do creative work.

    • http://www.thedailybell.com/ The Daily Bell

      “This idea somewhat reflects when musicians or painters sought patronage from aristocrats to do creative work,”

      Not at all. There is all the difference in the world between private patronage and government (bureaucratic) handouts.

      • Arthur Hastings

        This idea somewhats resonates Bolshevik propaganda from 1950’s and scare me to death! The world is heading toward “perestroika” times. If the bureaucrats want my freedom, here’s my answer: MOLON LABE!

      • Doc

        Agreed. But I know clever, successful and wealthy people that love this idea as they suddenly wouldn’t have to slave for a corporation or sell their services, and finally will be able to and afford to do what they really want. They are mistaken of course, but it sounds as a good idea to so many people.

      • Danny B

        I wasn’t referring to general handouts. I was referring to the part about people who are talented and driven but, poor. Here is what happens when you provide scholarships to a talented person; http://nextshark.com/sabrina-pasterski-22-mit-grad/
        Here is what happens when you provide money to the general public.
        https://www.youtube.com/watch?v=fTH7IjFD_Wg

        It’s dependent to a great deal on whether or not a person has motivation. Man is carrying the same “baggage” that he carried just a few thousand years ago. A few are escaping this conditioning; https://www.washingtonpost.com/news/wonk/wp/2016/03/18/why-smart-people-are-better-off-with-fewer-friends/

        • alaska3636

          She’s cute and smart? Too bad she’s into theoretical physics; that’s a government boondoggle bridge to nowhere or I’m Captain Kirk.

          I have been listening to the Great Courses on the baroque and classical era composers. They were generally able to compose as a result of patronage from either church or royalty. The poor bastards were all miserable and died young. I think the human mind is subject to the price mechanism of the universe. If you can’t value what you are doing, even if it is really good, it is hard to derive satisfaction from it.

  • dave jr

    I can hear the cheers from the poor little nincompoops who have been indoctrinated with a belief that this can somehow work. Why not pass out free homes, automobiles, food and fuel? Why not decree that everyone has a right to wealth without producing it?

    Absolutely it is designed to fail. It is designed to wipe out the remnant of the free market built on the foundation of individual responsibility. Having first demolished that foundation through authoritarian regulation, the overlords need to buy some time to arrest the angst welled up in the masses while a new foundation of total command and control is being built. The ‘time’ is being bought with lies and innuendo of serving a greater good.

    One day it will become obvious what that ‘greater good’ is. One day it will be discovered that it ain’t so good.

    • MetaCynic

      When you think about it, the sacrifice of individual life, liberty and property “for the sake of the greater good” is the concept empowering every imaginable tyrannical social and political system. The leaders of every nasty “ism” out there tirelessly proclaim that their particular “ism”, unlike all the others, exists solely to serve the greater good. Yet in the end the reality is that the greater good is always sacrificed for the individual good – for the good of the handful of individuals running each “ism”. So much suffering and bloodshed for the sake of so few!

      • dave jr

        I agree. Individuals enrich themselves by selling something. Either they sell goods and services (including their labor), or they are selling an empty bag of ideals. Buyer beware.

  • Webforager

    Anything which does not earn trust will become degenerate. The system is fatally flawed because obligation is compelled. It will only generate more authority as it degenerates into bread and circuses. To my way of thinking, it’s as simple as that.

  • alaska3636

    I have several anecdotes; I am not sure what they mean:

    I watched the Big Short the other night with my fiancee. I thought it was an amusing movie but they kept breaking the fourth wall to “explain” things, which I found distracting and a bit condescending…until, my fiancee finally asked me what the hell a mortgage really was and, essentially, how they were securitized. After a bit of econ. 101 I found out that her basic knowledge of economics lie somewhere between supply and demand and credit default swaps. I am not sure what she took from the movie but we both thought it was entertaining.

    My guitar instructor is a world-weary sort who slogged his way through the hollywood scene in the late 80’s, early 90’s trying to make it with a band of his that seems to have been a prototype of what the Red Hot Chili Peppers would become. He is fifty now, has returned to his considerable jazz roots, received his history degree and now teaches elementary school kids. After practice, he told me he was “convinced” by his neighbor, who used to work for Peter Schiffs capital group, that the federal reserve was essentially responsible for the wealth that he benefited from during his lifetime. Now, my instructor thinks that any policies that were in effect at the time of his early adulthood up until now are responsible for the cushy life that he has lived and that those policies should be reinstated or reinforced. He says life has never been so good throughout history, so don’t complain because you just don’t understand how good you have it.

    Here’s an article about Trump that I think is good:
    http://slatestarcodex.com/2016/03/19/book-review-the-art-of-the-deal/

    It perceives Trump as being a weird product of the American system; Trump’s view of the system is so narrow that he can’t imagine it being fundamentally different; and, since he has mastered the nuance of Byzantinism, he wants the system to benefit people in the same way as it did him.

    I am wrapping up my CPA exams and my final one is about Business and Environmental Concepts. In the first 100 pages, I have learned about the Keynsian supply curve and the multiplier effect. The Keynsian supply curve kind of makes sense in the context of “full employment” but literally no background regarding the efficacy of aggregate statistics is made evident. The multiplier effect is described as the amount government needs to spend to raise GDP to some arbitrary point. No effort is expended to take the idea to its logical conclusion: if GDP is good, and government spending effects it positively, then government should just keep on spending.

    • dave jr

      Hi Alaska,

      If I may, one at a time, I’d like to offer my take on these issues.

      Mortgages, like any loans, if they create ‘money’ are securitized by the real estate itself (improvements to land), advantaged by down payment, enough to cover administrative costs plus loss by fire sale (sheriffs auction) in the case of default.

      Your guitar instructor is selling himself short in believing that the system has somehow enriched him, where his value added efforts actually did it. Although I’m not saying that government protections of a legal system are worthless, if that is what he is alluding to.

      Trump. What the hell is that? I find it hard to believe that as a real estate broker and developer, he did things so efficiently above his competitors that he could earn billions in one lifetime. I think he is expert in gaming the system, legally cheated and defrauded his way to success. He’s an accomplished con man. Am I so desperate that I need to get behind a con man, hoping some scraps of carnage will fall to my favor? If he were to speak of reducing government largess and a return to sound money, then I could consent to his authority as President of the US. Otherwise I can just vote to help block Hillary. Some choice.

      The Keynesian concept is valid if one wants to produce a temporary big flame, like dumping gasoline on a camp fire (the multiplier effect). Like any get together, the party will soon dissolve when the irresponsible maniac attempts to run the show.

      • alaska3636

        For the mortgages, I was specifically referring to the MBS and the CDO securities that the movie was about.

        The movie did a good job of explaining things, but it occurred to me that there was an ocean of economic ideas in between supply and demand and credit default swaps that was simply being glossed over.

        How a single mortgage was packaged with other mortgages, the prevailing sentiment among financial gurus and the real estate market, the deregulation of banks (not mentioned in the movie), and the macro-effects of monetary policy was something no movie, or me giving a quick lesson, was going to explain. Mostly, the idea the movie was trying to convey was that bankers were jerks (true) and analysts were wrong (also true). A lot of other truths did not make it into the movie.

        I have read that Adam McKay is a big Bernie Sanders supporter, for what it’s worth.

        • dave jr

          It is quite curious how one can legally sell debt without the original mortgagee approval. I have been debt free for some time now, but I can remember back in the early nineties, when notified by ordinary mail, that my mortgage payments will now be sent to an entity I never heard of in New Hampshire. What? I have no dealings with them!

          Then there were the robo-signers. Who is to legally collect the default on a sliced and diced loan? How can they prove anything? Too much funny business. Serious people begin to reject the game and the overlords just move to attract sillier people.

          Well, we know it is getting to the end of the rope when the highest monetary authority suggests free money. Free and money are mutually exclusive. Like dry water, cold heat or bright darkness. Strange times for sure.

    • Green Onions

      Government spending should never be considered a component of GDP.

  • Ron Daugherty

    The “Conclusion” of this article we all must heed. Prepare now, friends and family. Help inform the multitudes who don’t know what’s happening or can’t understand this subtle financial corruption. Governance and central banks are simply not our supportive institutions in any sense. We’re are on our collective own. Make the best of it now!

    • jsmith

      “Help inform the multitudes.” I have tried, they just don’t care, be it family or friends.

  • Bruce C.

    I can’t wait to see how this plays out, if it actually does.

    I’m not saying I think CBers don’t have the guts and the lack of integrity to execute “helicopter money”, I just don’t think it will work in the way they might think (i.e., like EVERYBODY will get a “welfare check”, instead of just roughly half the population, and all else will stay equal.)

    I keep coming back to wondering what the motivations might be for anybody to do anything once everybody receives money for nothing. I predict that it will be very deflationary and there will actually be a steady drop off in goods and services throughout the economy. The rate at which that occurs will be fascinating to see.

    • LawrenceNeal

      Robots will do the work, people will sit in front of the TV and sink into lethargy.

      • Bruce C.

        But even maintaining that system (of robots) requires human input.

        There really seems to be no getting around the fact that what a basic income for all humans implies is a kind of perpetual motion – “something for nothing” – scheme.

        It can’t work (as opposed to it might not). It’s just a question of how long it takes to implode.

        Even paying “producers” more – or allowing profits to be made in business – doesn’t change the math.

        • LawrenceNeal

          I think that some kind of universal birth control will be instituted. It will require far fewer humans to produce and maintain than are required to do the work of machines. ‘Welfare Queens’ don’t get welfare for being unemployed, they get it to pay for children’s needs. With that requirement removed, and birth control, they can lay around, watch TV, fornicate, and have useless lives. They won’t even care that within a generation or two, they’ll all be gone. And before anyone cries racism, there are far more whites on welfare than blacks. The agenda is population reduction, and initiative killing Basic Income coupled with infertility inducing GMO’s will be very effective.

  • Praetor

    Yep! Free money. No, nothing is free, its the strings they attach to the free thing that gets you. You get this free money, why because you don’t have a job or you work and are 10/15/20 thousand dollars below the bottom of what they say is a living wage or they just want you to be able to pay the bills and the debts the people have accumulated or to buy the junk a robot made. And to get this free money you sign over your life, and if you don’t end-up spending the free money as they wish you to spend it, they will just take the money and spend it on what they want the money to go to. And what happens if you don’t want the money.

    The Keynesian collectives are on their last lap of total collapse. You could say the world is rotating in the wrong direction and will suddenly stop and everything will float for a second and then crash to the ground in complete ruble, then the world will start turning in the right direction. Nothing is free. The system most collapse and the Keynesian Nihilists most go with it!!!

  • gamathers

    In the big bankers mind: Bitcoin bad – RSCoin good. Only one difference – Control.

  • Jk

    If they do drop from the helicopter, use it to prepare! Because as it is falling from the sky, so will it’s value! Buy what you can of any real value, stick it away for the days that will come! Buy storage foods, tools, clothing, fuel, METALS IF POSSIBLE!, instruments of protection, water purification, the real stuff in general! The asses or I should say the masses, will buy, entertainment, lottery tickets, plastic garbage, trips to nowhere of value, government issued debt, corporate debt, shares in falsified corporations,(leave it on deposit),mutual funds, 401ks, rrsps, high fashion and the like! Just as the have since the printing pressies exploded into action a century ago! Get what you can while the getting is good, because when the music stops, IT IS GOING TO SUCK!

  • r2bzjudge

    “Institutions which dragged the world from its worst depression since the early 20th century…”

    We have been in a depression since 2008. No institution has dragged us out of it. They have in fact been accumulating more damage. The G20 changed the rules for depositors. That means a financial crisis is coming. With accumulated damage since 2009, the crisis should be even worse this time.

    • kenvandoren

      And before that, the instability was obvious, and the economy was soft. I remember Al Greenspan saying, after the crash of 2001, which revealed the economic folly of the economy during the Clinton years, “we will create the liquidity with which to float the markets.”

      Interpretation- “We will counterfeit money to postpone the day of reckoning.” When I heard Al say that, I knew that the next downturn was going to be a doozy. Those who say we never really got over the “last” recession are correct. Most of what has happened since 2008 is almost certain to ensure that the next official downturn is worse yet. You would think this would be obvious to the financial gurus, and maybe, or probably it is. But to admit it is to deny the illusion that they have attempted to create, that they are in control and know what they are doing.

      Had Greenspan let the bankrupt officially go bankrupt, if he had allowed the necessary correction to take place back then, we would by now be standing on a much more reliable, much more stable financial ground.

  • silversmith

    Free ? It is stolen from depositors Who deposits are debased By inflation and negative rate charges . Stealing is the new norm ! Please see this .https://www.youtube.com/watch?v=eHgbRYgpGGs
    This answers alot of Questions not addressed in the aftermath of the 08 debacle .

  • Bruce C.

    I have a question.

    If you take a 1 oz US silver Eagle coin that has a face value of $1 to a US bank they will exchange it for a $1 Federal Reserve Note (aka one US dollar).

    If you take a 1 oz US gold Eagle coin that has a face value of $50 to a US bank they will exchange it for $50 FRNs/dollars.

    So, if you take a 1 oz silver (Austrian) Philharmonic coin that has a face value of 100 euros, will a European bank exchange it for 100 euro currency?

    • Tsarina in a Barrel on the Sea

      A one ounce Philharmonic has a face value of €1,50 (one and a half Euro).

      • Bruce C.

        I’m sorry. You’re correct. The 1 oz gold Philharmonic says “100 euro”. I realized that what I wrote couldn’t be right for obvious reasons but I didn’t have a chance to edit my post.

        However, my basic question still stands: Will a European bank exchange a 1oz silver Philharmonic for 1.5 euros (i.e., are they considered legal tender in the euro zone, or even in non-euro zone countries)?

        Thanks for responding.

  • 2bvictorius

    Barack Hussein Obama twice became president of the USA, and judging from current activities by the republican party leaders it is evident they are willing to help him become a third term president, if for some reason Hillary is eliminated from the race,.

    The XXII Amendment means nothing to either party, or to a majority of voters. Both party’s conspired with MSM and academia to essentially nullify the requirement of being a natural born citizen per Article II, by convincing voters, that even anchor babies are eligible. The constitution of the Unites States Of America has officially been declared dead by both political parties and all elected and appointed politicians.

    The real power and control behind the false label, republican party, will never accept or advocate any candidate they cannot control absolutely, meaning Donald Trump.

    • Bruce C.

      My concern is that if Trump becomes the Republican nominee, Hillary will be swapped out for Washington’s class clown (“Crazy”) Joe Biden. I wouldn’t mind seeing Hillary get her comeuppance but I’m afraid Biden could defeat Trump and that would be a nightmare.

    • bouf

      Check out Gary Johnson.

      • 2bvictorius

        Yes, I remember Gary Johnson, if you are referring to the former governor of Utah and “almost” a presidential candidate.
        I researched him as best as I could, and found nothing to prevent me from supporting him. I believe he was on Glenn Becks fox program.
        I don’t recall whether he was a Mormon , if so that would be my only concern with him.

  • alaska3636

    Patrick Buchanan’s new article about Trump is good:
    The Rule-or-Ruin Repuplicans
    http://takimag.com/article/the_rule_or_ruin_republicans_patrick_buchanan#axzz43fuVkmwY

    “Do they think that Republicans who stay loyal to the ticket will not see them for the selfish, rule-or-ruin, wrecking crew they have become? Do they think that if a Trump-led ticket is defeated, they will be restored to the positions of power and preeminence that a majority of their fellow Republicans have voted to strip away from them?

    The Beltway has to come to terms with reality. It has not only lost the country; it has lost the party. It is not only these elites themselves who have been repudiated; it is their ideas and their agenda.”

  • desertspeaks

    taking anything from these creatures will have strings attached for the “gifts”.. like that house you owned, it’s going to be confiscated when you die “if not sooner” to pay back the GIFTS you accepted, your car, jewelry, anything of value and eventually, your internal organs will in all likelihood be sold off to cover those GIFTS you accepted!

  • kathkin

    kathkin

  • kathleen sirotkin

    Free money delivered electronically> cashless society> total control

    • Bruce C.

      And also probably limited to what you can buy with it. E.g., no PMs, savings, or even “investments.” Just consumption. The free “bits” may have a limited shelf-life too.

  • rahrog

    What percentage of americans would “vote” for a basic income? I would guess a vast overwhelming majority.

    • http://www.paleosaver.com Lorin Chane Partain

      of course, because they understand economics about as well as the central bankers do.

      • rahrog

        Yep. Scary but true.

    • Christan

      Before or after I run out of food for the family?

      • rahrog

        The people pushing the concept of a “basic income” intend for you and your family to run out of food. That is their plan. What’s yours?

        • Christan

          I am not sure if anyone can survive what is coming. You can buy food and store it. I finished Geoff Lawton’s Permaculture Design Course however I still need some land.

          • rahrog

            Sounds like your mind is in the right place, so you are well ahead of most folks. Nobody “survives” this. Mother Nature runs a temp agency. Good luck and best wishes to you and your family.

  • Steffo Eriksson

    Mark of the Beast to follow shortly

  • http://www.paleosaver.com Lorin Chane Partain

    These central bankers can’t even grasp the basic concept of supply and demand how can they possibly be trusted with the power to print money?

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