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  • US helicopter money

    From economics.rabobank.com

    This week President Trump proposed sending Americans $1,000 checks. Such a direct stimulus is also known as ‘helicopter money.’ Not all Republicans were enthusiastic about this idea. For example, Senate Appropriations Committee Chairman Richard Shelby said “I don’t know the logic of that.” In this note we take a closer look at the economic logic behind helicopter money. Based on our analysis, we expect this to be effective in slowing down a sharp decline in consumer spending, although it will probably not be enough to bring the economy back on an upward growth path. What is helicopter money? Many people, ... (full story)

Will helicopter money help? This is another brand New experiment in a never ending saga. I am Very doubtful. If people who are greatly in debt and already lost their job get a 1000 usd I doubt they use the money on consumption. I Think they will save it for the next mortgage payment. At least Thats what I would do
It sounds like, looks like and it probably is a “kicking the can down the road” - when an economic shock is dampened in such ineffective ways, one can always expect bigger troubles later on.

The sooner and stronger the shock is felt and absorbed - the stronger is the economy and society after that.

I’m strongly against bailouts and government subsidies to failing banks and big businesses - let them fail and other companies (more innovative and effective) would take their place - this the natural social evolutionary model.
If pay every month 1000 usd 12 months in a row then yes it could help. One time payment wont encourage. People lost jobs.. they need confidence about future. 1 time payment wont give confidence.
Quoting michaelpelly
It sounds like, looks like and it probably is a “kicking the can down the road” - when an economic shock is dampened in such ineffective ways, one can always expect bigger troubles later on. The sooner and stronger the shock is felt and absorbed - the stronger is the economy and society after that. I’m strongly against bailouts and government subsidies to failing banks and big businesses - let them fail and other companies (more innovative and effective) would take their place - this the natural social evolutionary model.
Completely agree to that. First to take the hit must be the share holders. If the companies are running short on cash the share holders must chip in. The share holders are the ones who have taken the 10 years bull market and therefore also the ones to take the risk. It should not be society that bails out the share holders and the companies.

Take again Norwegian Airlines. I communte from Copenhagen to London at least twice a week and can get a ticket for 299 with Norwegian and 2999 with competitors. Norwegian has never posted a profitable year and the strategy is to be cheaper than competitors hoping that they will be bought. Now that the shit hits the fan they are out of cash in a couple of days and asking for all kind of bailouts. Should society really fund suck kind of permanently loss making business? I dont think so. If the share holders are ready to keep funding then that be it. But if the share holders step aside then society must also step aside.
Sounds more like "Sink-Hole" money to me. If businesses are shutting down and people forced to stay home to protect the community from the virus then how can it possibly be influential to provide stimulus. However if and when things begin to look up and things begin to normalise then; wham, pump up the volume, get careers and the economy stimulated. Harder for the people in the short term but more efficient as a long term strategy, imo.
Quoting michaelpelly
It sounds like, looks like and it probably is a “kicking the can down the road” - when an economic shock is dampened in such ineffective ways, one can always expect bigger troubles later on. The sooner and stronger the shock is felt and absorbed - the stronger is the economy and society after that. I’m strongly against bailouts and government subsidies to failing banks and big businesses - let them fail and other companies (more innovative and effective) would take their place - this the natural social evolutionary model.
If the financial system collapses how will you be paying for your expenses such as food? We would also probably get hyper inflation so cash would become obsolete.
  • Post #7
  • Quote
  • Edited at 5:33am Mar 27, 2020 4:42am | Edited at 5:33am
a government in debt and the fed with empty hands of more monetary policy, what will happen if this dam virus will spread more.
back in 2011 Hong Kong gave each citizen $6000 hkd , and this year they have again announced HK$10,000 (US$1,200) so there were cases one can study the effectiveness of such scheme
Could have used the helicopter money yesterday since my Futures broker refuses to allow the 25% day Trading margin on the S&P 500 when it went way up.
Quoting Banditten
{quote} I communte from Copenhagen to London at least twice a week and can get a ticket for 299 with Norwegian and 2999 with competitors. Norwegian has never posted a profitable year ...
..... and

Should society really fund suck kind of permanently loss making business? I dont think so..."
end quote

your logic is interesting , on the one hand you want to benefit from the loss-making airline twice a week but then shirk from the taxpayer bailout of the cheap company you benefited from ?

something doesn't compute there ?

am i missing something ?
or more importantly
are you missing something ?

maybe you should consider contributing to Norwegian Airline's Bailout?
Quoting TraderTero
{quote} If the financial system collapses how will you be paying for your expenses such as food? We would also probably get hyper inflation so cash would become obsolete.
I’ve lived couple months in hyperinflation back in 1996 and I’m still alive...

Yes - you would buy food with government stamps and coupons - everything else is not for freemarket sale but rationed. It lasted couple months and then currency was devalued to normal levels - live went on...
Quoting aquavox
{quote} ..... and Should society really fund suck kind of permanently loss making business? I dont think so..." end quote your logic is interesting , on the one hand you want to benefit from the loss-making airline twice a week but then shirk from the taxpayer bailout of the cheap company you benefited from ? something doesn't compute there ? am i missing something ? or more importantly are you missing something ? maybe you should consider contributing to Norwegian Airline's Bailout?
No it fits in perfect. I will always go for the solution that suits me best. Og others want to give away their money then that be it but just dont ask others to pay the bill.

By the way who sat I fly Norwegian? I fly with any airlines. But my preferred is so absolutte SAS.
thankyou ,but your post demonstrates the market logic precisely, benefiting from a cheap loss making organisation that provides a good service - in the air or other wise which then fails in hard times probably is the best kind of candidate for taxpayer funded bailouts , maybe its fine to be self centred, for you as an individual, but in the end everybody pays for that self centredness:-)

we are entering the age of ....
“The needs of the many outweigh the needs of the one "

may we all go boldly... where we never dared to go before.
It is not for me as a consumer to set the prices. Hej would you bailout something that will need Another bailout 2 years down the Road.

Anyway we all have different perspectives.

Back to trading. May we all find a Nice trend to ride!
actually , yes, you have another pearl ,
as consumers
we do set the prices!
if we did not want to pay the price , we wouldn;t

Econ 101

the question of "bailouts" is an interesting thread
we as consumers ultimately decide whether we bailout or not
"to be or not to be..."
that is the question?
would you bailout your aged grandmother if she couldn;t 'pay her way'
:-)
i think from my research, Norwegian Airlines does actually care about their Grandmothers.
trade well
trade with conscience. - with awareness, and a dash of 'my'indfulness
most governments fell asleep while China was initiating its Wuhan quarantine,
now the damage is outpacing the belated response around the world
It's not about giving out free money but about supporting healthcare! The priority should be healthcare! Everything else should be secondary. The US government doesn't appear to have its priorities straight!
  •  Guest
  • | IP XX.XXX.132.60
Will Americans abroad receive the helicopter drop of a 1000 dollars also?
  •  Guest
  • | IP XX.XXX.17.224
Im working Uber, why using helicopter cost more money, use Us UBER , a lot of uber driver don't have Job right now
Quoting Guest
Will Americans abroad receive the helicopter drop of a 1000 dollars also?
No they ran out of fuel and didnt have enough money to buy a last gallon of gasoline
  •  Guest
  • | IP XXX.XXX.88.147
Just think 2 trillion dollar amount is to much cant they work up a bill with out all the fat in it.
  •  Guest
  • | IP XXX.XX.23.216
I have three kids,Rent is due !!! Is so expensive and Los Angeles for an apartment not a house an apartment!!1800
  •  Guest
  • | IP XX.XXX.181.218
FEMA gave out $2000 credit cards during recovery from Hurricane Katrina. 2 days later, they were showing up at the casino. Bad idea!
  •  Guest
  • | IP XXX.XX.220.85
Quoting michaelpelly
It sounds like, looks like and it probably is a “kicking the can down the road” - when an economic shock is dampened in such ineffective ways, one can always expect bigger troubles later on. The sooner and stronger the shock is felt and absorbed - the stronger is the economy and society after that. I’m strongly against bailouts and government subsidies to failing banks and big businesses - let them fail and other companies (more innovative and effective) would take their place - this the natural social evolutionary model.
Your just looking at the stimulus it also increases unemployment pay and other factors
  •  Guest
  • | IP XXX.XX.180.94
Quoting michaelpelly
{quote} I’ve lived couple months in hyperinflation back in 1996 and I’m still alive... Yes - you would buy food with government stamps and coupons - everything else is not for freemarket sale but rationed. It lasted couple months and then currency was devalued to normal levels - live went on...
I don't think that Americans really know hyperinflation, I mean the ki d of life shifting inflation (on a consistent basis) where one year you drive an S-Klasse Benz, the following, you're on a bus. I grew up in Buenos Aires as a kid, and that was a reality - I have a few $1M peso notes from that time. A stimulus package is a band aid, and in 2020, what does $1000 even really get ya.
  •  Guest
  • | IP XX.XXX.249.237
One time payment it's not gonna help people, we know this going to continue
at least two more months.
  •  Guest
  • | IP XX.XXX.82.238
I'm buying bitcoin with my free money.
  •  Guest
  • | IP XX.XXX.81.98
330,000,000 americans.
1,200. Dollars to each american.
$ 396,000,000,000 - injection into the economy

Take a lesson from those on welfare.... gucci, LV, marc jacobs, $120 shoes, $500 + clothes, glasses, and other products, filet mignon. Welfar-ians..... dont spend their money on this crap because they can afford it, they dont buy it because it improves their health...... they buy it to get themselves out of the depressing reality they are in, they buy that crap because it makes them look and feel a certain way, its all psychological.

In the end millions of americans have been cooped up in their houses, restricted to online retail therapy, trumps just kicking everyone in the A** so they all get out and buy way more than he's giving out, its about to be a black friday dopamine buying frenzy once trump unrestricts everyone from their houses... "unleash the beast".
  •  Guest
  • | IP XXX.XXX.135.169
Just pay off everyone's debt ..money roll off the press daily..!!
  •  Guest
  • | IP XXX.X.227.139
I'm definitely putting the money into Crypto.
Ever imagined how corperate America reacted if Bernie invested 2 Trillion USD into public health, infrastructure, avordable education, social security..... everybody whould scream that the USA becoming a socialist state!

A little corona crises and suddenly all this money is thrown into the market to save the share values that are 90% owned by the top 10% or 80% owned by the top 0.1%.....

The one time 1000 USD check to everybody is nothing more than a dog bone.... which will be consumed immidiately and therefore directly wander in the pockets of the 0.1% by a blink of an eye.

At least 80% of all Americans will be worse off after this crisis will have passed and the Gini factor will increase above 90%. I really don't get it why 80% in a democracy punish themselve and vote the most selfish, narcistic psychopath off all 0.1% ers into the office - don't you think it's Bernie time?

4 years to heal a democracy that otherwise will fall apart..... my advice, your choice!
  •  Guest
  • | IP XXX.XX.61.132
I need some of the money
  •  Guest
  • | IP X.XXX.40.250
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  • Story Stats
  • Posted: Mar 27, 2020 1:27am
  • Submitted by:
     Newsstand
    Category: Fundamental Analysis
    Comments: 33  /  Views: 781,349
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