Guardian’s Larry Elliott: Helicopter Money Coming Soon
April 18, 2016 (EIRNS)—In a commentary entitled "The Bad Smell Hovering Over the Global Economy," the Guardian’s Larry Elliott writes today that helicopter money is on its way, maybe sooner than you think. Don’t be fooled, he warns, by reports that economic stimulus is working and the economy has stabilized.
"Put your ear to the ground though, and it is possible to hear the blades whirring. Far away, preparations are being made for helicopter drops of money onto the global economy. With due honor to one of Humphrey Bogart’s many great lines from Casablanca: ‘Maybe not today, maybe not tomorrow but soon.’
"Helicopter money is closer than you think."
Elliott argues out that the situation in China has not really stabilized, and that the so-called recovery in the United States is an illusion, given that it is based on low interest rates, which are only pumping credit into the stock market and easy loans for car sales. Despite an expanding job market, real incomes are not keeping up with prices, especially of health care.
As for Europe, "over and above the fact that the euro was a disastrously-flawed concept, is that the banking system is not fit for [the] purpose. As the IMF noted last week, a third of Eurozone banks have no prospect of being profitable without urgent and meaningful reform. That requires two things: to reduce the number of banks and to do something about the €900 billion (£715 billion) of bad loans sitting on their books at the end of 2014." He predicts that this will not happen anytime soon.
Elliott even notes, "Central banks, of course, swear blind that they are fully in control and that there is nothing to worry about. Perhaps not, but something doesn’t smell right. The fact that economists at Deutsche Bank published a helpful cut-out-and-keep guide to helicopter money last week is a straw in the wind."
He suggests that following the collapse of the Quantitative Easing, the helicopters may take to the air in 2017.