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Reuters: A breakthrough speech on monetary policy - QE for the public!

REUTERS - Consider the U.S. Federal Reserve.

At present the Fed prints $85 billion of new money monthly and distributes it to banks and Wall Street investors by buying government bonds. And the Fed has promised to continue this monthly “quantitative easing” until such time as unemployment drops and is clearly and sustainably declining to more normal levels.

Now suppose instead that the Fed divided its $85 billion monthly money production into 300 million checks of $283 each and sent these to every man, woman and child in America. Suppose, moreover, that the Fed promised to keep sending out these checks, worth more than $1,000 a month for a four-person household, until the United States reached its unemployment target – and the Fed chairman added that he would increase the checks to $1,500 or $2,000 a month for that household if $1,000 monthly proved insufficient.

There can be little doubt that this deluge of free money would stimulate consumer spending and revive employment – and no doubt that it would be infinitely more effective than distributing money to bond investors and banks through QE.

More: http://blogs.reuters.com/anatole-kaletsky/2013/02/07/a-break...

I proposed the idea first: http://www.dailypaul.com/262297/obama-supporters-have-got-it...



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Michael

Jim Rodgers said a few months ago if you must buy currency, choose the Russian Ruble...I laughed....then I read this: http://www.bloomberg.com/news/2013-02-10/putin-turns-black-g...

Putin bought 570 metric tons.....

Yes, if what the Rueters says comes to fruition, the dollar is mega toast.

For Freedom!
The World is my country, all mankind is my brethren, to do good is my religion.

Cyril's picture

HYPER TOAST

HYPER TOAST

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Indeed

Ill take butter and jam with that

For Freedom!
The World is my country, all mankind is my brethren, to do good is my religion.

How about

instead of handing a grand to each family, the government just matches the gross income of each person by either 10, 15 or 28% in direct deposit? Then, to pay for it, they could tax the banks. That would be a complete 180, wouldn't it?

Cyril's picture

Yes, that would be a complete 180... but still unsustainable

Yes, that would be a complete 180... but still unsustainable in the short run.

For the banks have no real assets anyway, they'd have to keep printing more, and more; these charts show how it got out of hand past the point of no return circa Q2 2008:

http://dotxml.brinkster.net/2012/Misc/G4_Charts.pdf

Obama is only around to keep the curtains closed and have the global collectivist planning (definitely installed with Bush's NWO ~ 1990) going on, with some juicy perks for the convenient crony corporatism already in place for decades. Meanwhile, everybody can strike out the Bill of Rights' content. Global fascism is where we are today [ Please enjoy, if not done yet: http://www.cfr.org/about/corporate/roster.html ]

The best we can do is try opting out as much as we can from fake money and fake markets. And keep speaking out. I posted this on "CREDIT" recently:

http://www.dailypaul.com/274028/frederic-bastiats-that-which...

It is time people start reading again texts that really matter.

'HTH,

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

yes, yes.

I was actually making a tongue in cheek comment but I do agree with you. The only reservation I have is that I also believe that we should begin taxing the banks. I'm not sure if you've caught my proposals for "Taxing LIEs" which suggests we tax Leveraged Income Earned as it applies to all derivatives, short sales, fractional reserve banking and possibly even FRNs' very existence.

I calculated that it would only take about 1/2 of a percent tax to cover our deficit in two years.

Also, check out my latest post on a solution to the problem. It's right up your alley.
http://www.dailypaul.com/274256/what-the-root-solution-could-be

This would incentivize many people to not work

I believe this would incentivize many people to not work, and just stay home. Why bother getting a job if the FED sends you free money every month? The blowback from a policy like this could be that many Americans would just stay home, and then let foreigners come in and take all the jobs. That's how it is in many European countries, (been there, seen it). Their citizens get free checks from the government every month, don't work, then hoards of immigrants come in and gobble up all the jobs.

One of the claims made in this piece that we know to be false is "He shows that links between monetary financing and hyperinflation are theoretically dubious and historically unjustified". Austrians know that if more of something exists, then it becomes worth less, and that holds true for money as well.

In closing, I share the sentiment of the below poster that said something like, "this seems like the least stupid idea". It does kind of seem like Keynesianism on crack, lol.

Very interesting read. Thx a lot for sharing.

At first I thought this was from The Onion.

Apparently not, people in positions of power and prominent media outlets are seriously discussing this. FUBAR. I recommend you pick up a wheelbarrow while they're still cheap.

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

Cyril's picture

I recommend you pick up a wheelbarrow while they're still cheap.

"I recommend you pick up a wheelbarrow while they're still cheap."

Indeed.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Cyril's picture

I don't think that'd be a good idea.

I don't think that'd be a good idea. Coincidentally, I have posted yesterday something fairly related to the soundness (or absence thereof) of principles in that matter:

http://www.dailypaul.com/274028/frederic-bastiats-that-which...

'HTH,

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Only two problems

with equitable disruption of QE:
1) Consumer prices would rise as the money circulated and demand rose
2) The Fed and its bankster buddies wouldn't retain control (manipulation) of the economy, which ultimately is the solution.

Answers

1) Cut down on purchasing Treasuries and MBS.

2) That's not a problem for me.

It's ok to print money

if it's distributed more equally? The helicopters are dropping money into the wrong neighborhoods? Keynes was right, wrong sector?

I believe hes saying "if your

I believe hes saying "if your gonna be stupid, this is a way to be less stupid"

"breakthrough"?

How about not being stupid?

gotta learn to crawl before

gotta learn to crawl before you can walk ;) lol baby steps