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Showing posts from October, 2018

Fiat Money, Helicopter Drops, Zuckerberg and the Big Myth

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This article was published by me on Talkmarkets: http://www.talkmarkets.com/content/financial/fiat-money-helicopter-drops-zuckerberg-and-the-big-myth?post=136694&uid=4798

How do we weigh the debate about money, whether it is fiat or  something else? This question has been at the forefront of economic debate since President Richard M Nixon took US currency off of the gold standard. After this discussion of fiat money we can see at the end of the article how this applies to helicopter money in US history as well as a real comprehensive HM for America.

Helicopter money has big advantages over universal basic income which is being pushed by Silicon Valley leaders and Mark Zuckerberg. More on that later. But back to fiat currency concepts.

It is true that US currency cannot be redeemed for gold and many say that qualifies it for the label of "fiat currency".  It is not convertible. But is it backed or secured? At least some of the currency is secured. Federal Reserve notes a…

Helicopter Money, Not Bond Destruction, Must Replace Debt Forgiveness

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This article was first published by me on Talkmarkets: http://www.talkmarkets.com/content/bonds/helicopter-money-not-bond-destruction-must-replace-debt-forgiveness?post=136378&uid=4798

It does not look like Donald Trump is going to break through the New Normal of derivative economics. Derivatives present a very big problem for governments as they force government to reject debt forgiveness, to people or to other, weaker, governments, even when it makes perfect sense. The concept of  Jubilee and debt forgiveness functioned in history in a way that it cannot now. 
We can look at the history of debt forgiveness briefly, and then explain why Helicopter Money must replace this old method of balancing economic interests. Ellen Brown explores some solutions, including one very problematic one that I address later, as solutions to the possible need for write downs in the EU.
Most everyone knows about the Jubilees of Old Israel. But debt forgiveness was a manifestation of the strength of …

The Curse of Trump Is in Cutting Back on the Poor

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This article was first published on my Talkmarkets personal blog: http://www.talkmarkets.com/contributor/gary-anderson/blog/economics--politics/the-curse-of-trump-is-in-cutting-back-on-the-poor?post=136270&uid=4798

The low GDP numbers we have are a concern, because the lower growth is, the harder it is to sustain social programs. However, as the chart shows, the United States is not exactly in its worse place when it comes to debt to GDP levels:


The Trump administration and the pundits who are likely paid to share his stories are all saying this is safety net unsustainable. Certainly, 2017 GDP has started out poorly at 0.7 percent for the first quarter. And that is a concern. But what if that is more an observation about how Trump has impacted Americans than about anything else? Maybe Trump is a recession in the making!

And Trump wants to pass the potential savings gained from the backs of the poor to wealthy people. That makes no sense at all as capital already has been winning …

Fed VP Williamson Destroys Inflation Hawks

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This article was first published by me on Talkmarkets: http://www.talkmarkets.com/content/economics--politics-education/fed-vp-williamson-destroys-inflation-hawks?post=135958&uid=4798

Inflation hawks have ratcheted up inflation expectations with limited results. They are like the guy whose ship came in while he was at the airport. They base inflation expectations on CPI when the Fed measures PCE. Dr Stephen Williamson destroyed the inflation hawks back in April of 2017, but most of the pundits were not paying attention.

The Consumer Price Index (CPI), measures the cost of living by measuring a pre-chosen basket of goods. The CPI includes everything, including food and energy. The Personal Consumption Expenditures (PCE) index does not include the cost of food and energy because they are volatile and change often. The Fed seeks to measure underlying inflation.

The Fed looks, as Dr Williamson has said, at PCE, not at CPI. And since the Fed looks at PCE, the St Louis Fed Vice Preside…