Calling the world’s governments unprepared for Covid-19 is to laughably understate the case. They apparently hadn’t even considered the possibility of a pandemic shutting down the global economy, and had zero contingency plans for dealing with either the physical or financial impact.
Now they’re making it up as they go along. Among the offers currently on the table:
Japan is providing loans to businesses hit by the sudden evaporation of travel, sports and trade.
The US raised its repo market funding and proposed small business loans and tax relief.
Europe held interest rates steady while boosting QE modestly.
Australia is giving low-income citizens stipends of $750.
The markets, not surprisingly, are appalled by the modesty of these plans and are melting down. Pretty much everything that can be sold is being sold.
Which means today will see a flurry of conference calls in which the ECB, BoJ, Fed and their elected officials try to hammer out a coordinated shock-and-awe policy to keep the patient from bleeding out.
In a hyper-financialized world, the only remaining tools are variants of easy money, so that’s what is coming. But since “easy” may not do it, expect the money to be free this time. Forget about the loans the US and Japan have mentioned and look instead to Europe (more financial asset purchases) and Australia (direct payments).
The Bank of Japan is already a big buyer of equities, for instance. But the Fed will soon be the biggest. Here are former Fed chair Janet Yellen’s thoughts on the subject:
Janet Yellen Suggests Strengthening The ‘Fed Put’
In a speech in Hong Kong this week, former Fed chair Janet Yellen stated that “global central banks don’t have adequate crisis tools.”
According to that logic, she believes that launching additional multi-trillion dollar rounds of quantitative easing and cutting interest rates into negative territory – two aggressive and controversial monetary tools that are currently available – are simply not enough. Yellen’s comments this week echo comments that she made in September 2016 when she was still Fed chair:
The Federal Reserve might be able to help the U.S. economy in a future downturn if it could buy stocks and corporate bonds, Fed Chair Janet Yellen said on Thursday.
The Fed’s current toolkit might be insufficient in a downturn if it were to “reach the limits in terms of purchasing safe assets like longer-term government bonds.”
“It could be useful to be able to intervene directly in assets where the prices have a more direct link to spending decisions,” she said.
As for direct payments to citizens, businessman/presidential candidate Andrew Yang generated a surprising amount of buzz in the Democrat primary by proposing a $1,000 per month payment to every American adult. From his campaign page:
The Freedom Dividend, Defined
In the next 12 years, 1 out of 3 American workers are at risk of losing their jobs to new technologies—and unlike with previous waves of automation, this time new jobs will not appear quickly enough in large enough numbers to make up for it. To avoid an unprecedented crisis, we’re going to have to find a new solution, unlike anything we’ve done before. It all begins with the Freedom Dividend, a universal basic income for all American adults, no strings attached – a foundation on which a stable, prosperous, and just society can be built.
There’s no need to debate the (glaring and potentially catastrophic) downsides of governments buying up the private sector and/or depositing trillions of dollars in random bank accounts. Those risks are in the future and the crisis is at the door.
The more interesting question is: will these things work? A pandemic, after all, is a physical rather than financial crisis, and it’s unclear how an extra thousand dollars a month or a modestly bigger stock portfolio will convince people to fly or book cruises or stand in line at Costco when such activities carry a potential death penalty.
But we’re apparently going to find out.
11 thoughts on "Here Comes The Torrent Of Free Money"
“Calling the world’s governments unprepared for Covid-19 is
to laughably understate the case. They apparently hadn’t even considered the
possibility of a pandemic shutting down the global economy, and had zero
contingency plans for dealing with either the physical or financial impact.”
Bull _hit! They planed on it. Watch and see how much more control they put on the People.
Matthew 6: 24 No man can serve two masters; for either he will hate the one, and love the other; or else he will hold to one, and despise the other. Ye cannot serve God and mammon.
Mark 10: 42 And Jesus called them to him, and saith unto them, Ye know that they who are accounted to rule over the Gentiles lord it over them; and their great ones exercise authority over them. 43 But it is not so among you: but whosoever would become great among you, shall be your minister; 44 and whosoever would be first among you, shall be servant of all.
They are serving money masters and there is not even any real money! They are in a dark place.
Go read this: https://www.oftwominds.com/blogmar20/goodbye-globalization3-20.ht
Lets pump up the worthless shares of companies and banks,the Gouvernment will buy them at the full price.That is how you offload garbage to the taxpayers.
It’s what they did in 2008 isn’t it? The fed bailed out Wall Street Banks and shifted the burden onto the savers with free money and zero interest (except for the fed paying the banks for holding overnight funds). Then they continued and still continue to do it (quantitative easing) to prop up stocks discouraging saving while engineering inflation and changing the value of the currency.
This “Ain’t no square house” Helmut. Reforms are political forced “Fixes” to benefit the financial classes and special interests at the expense of working people and savers. It’s how the system works.
Of COURSE the government knew that financial mayhem would attend the Coronavirus® and the hoax attendant thereto. The whole purpose of the hoax is to ge the people to destroy the tottering, rotten , dishonest, rigged economic system so it can be replaced with one even more rigged against the real producers of wealth, and in favor of the plutocratic globalists. Yes, Bloomie, I mean you. You to Bill, Jeff, Li ping, etc., etc, etc.
Trump and his cohort propose helicopter money. God luck with that. It is like drinking in the morning to get rid of hangover. It might feel god for a bit, but that hangover will come roaring back.
This is a huge scam, and nothing but. The Coronavirus® won’t kill you, but the hoax will damn sure enslave you. And that has been the goal all along. As Colonel Saitu (Evil Japanese prison warden) said to his slave prisoners: “Be happy in your work!!”
Knowing who knew exactly what and when is far above my pay grade, whew, but one thing I do know. Soon enough some will figure out exactly how to turn it all into advantage and that advantage won’t be distributed democratically.
Sheep being led by their noses with FEAR! Shit happens and the markets always at some point recover even if painfully. Let us face a elephant in the room, the buying power of the Dollar thanks to inflation makes $100 in reality equal to a $20. Everything is flipping expensive and wages are suppressed. Costs of living have tons of artificial pressure on them financially thanks to taxation being out of control. All this Paper wealth is part of what is driving this mess further and further to a total break down and then what? But hey, people are just going to get more stupid by the day about this where the rest of us are watching you people make complete idiots of yourselves.
All this “Give everyone money,” schemes solves NOTHING! Even if we could just print money to give everyone it will quickly lose its value more and then what? And then add the whole idea of Crypto currency… how do you buy pizza when the network goes down? It is only a matter of time when someone decides to pull the plug and watch the world burn accordingly and we are just getting a taste of this with the Covid Scare.
What do I know, not like anyone cares, right? https://media3.giphy.com/media/JpqnWRtJHhsu4/giphy.gif
I will gladly accept the money that the government is going to pull out of thin air, but this begs the question, just how broke will my great-great grandchildren be??
Very, very broke, perhaps even indentured servants, but wasn’t that always the plan?
I ordinarily profit an estimated 6,000 $ to 7,000 $ nearly every 4 weeks using the net. It is satisfactory to doubtlessly replace my earlier workplace income, precisely taking into consideration I only work about 20 hours each and every week from home. I got obviate my occupation after doing work for only one organisation for several years, I required very reliable income. Probably the foremost exciting part of carrying out project on the internet is that I am always home with the child and also enjoy tons of freetime along with my loved ones on many amazing beaches of the attractive countries. Here’s the proper way to start >>>> bpl.kr/8Ys
750 IS A JOKE THEY NEED AT LEAST 1750
Do not underestimate the GREED factor.