Begin forwarded message:
> From: Bill Totten <shimog...@ashisuto.co.jp>
> Date: March 27, 2016 at 11:59:03 PM EDT
> To: Ugly New World <uglynewwo...@lists.mcgill.ca>, a-list
> <a-l...@lists.riseup.net>
> Subject: [a-list] Japan Goes Full Krugman
> Reply-To: shimog...@ashisuto.co.jp
>
> Plans Un-Depositable, Non-Cash "Gift-Certificate" Money Drop to Young People
>
> by Tyler Durden
>
> Zero Hedge (March 23 2016)
>
> The Swiss {1}, the Finns, and the Ontarians {2} may get their "Universal
> Basic Income" but the Japanese are about to turn the Spinal Tap amplifier of
> extreme monetary experimentation to eleven. Sankei reports, with no sourcing,
> that the Japanese government plans to unleash "vouchers" or "gift
> certificates" to low-income young people to stimulate the "conspicuous
> decline" in consumption among young people. The handouts may not be
> deposited, thus combining helicopter money (inflationary) and fully
> electronic currency (implicit capital controls and tracking of spending).
>
> Since Ben Bernanke reminded the world of the existence of government
> printing-presses, echoed Milton Friedman's "helicopter drop" solution to
> fighting deflation, and decried Japan for not being as insane as it could be
> ... it has only been a matter of time before some global central bank decided
> that the dropping of cash onto the populace was the key to economic recovery.
> Having blown their wad on Quantitative and Qualitative Easing ("QQE") (and
> been left with a quintuple-dip recession) and unleashed Negative Interest
> Rate Policy ("NIRP"), it appears Japan has reached that limit.
>
> As Bloomberg reports,
>
>
>
> The Japanese government plans to include gift certificates for low-income
> young people in its fiscal 2016 supplementary budget, Sankei reports, without
> saying who provided the information.
>
> Recipients would be able to use them for daily necessities.
>
> The government sees gift certificates as more effective in stimulating
> consumption than cash handouts, which may be deposited.
>
>
>
> As Sankei reports (via Google Translate),
>
>
>
> The government 23 days, as the centerpiece of the 2016 fiscal year
> supplementary budget to organize because of the economic stimulus, cemented
> the policy to include the low-income measures for young people. To examine
> the distribution of vouchers to be devoted to the purchase of such daily
> necessities. Although the 2015 supplementary budget, which was established in
> January was the extraordinary benefits pillars of the elderly, because the
> conspicuous decline in consumption among young people, hopes to work to shore
> up at the pin point. Low-income measures of the past on the grounds such as
> "benefit is Oyobi difficult wage hike" (Chief Cabinet Secretary Yoshihide
> Suga) is for the elderly was the main.
>
> However, in January of Family Income and Expenditure Survey (two or more
> people households), consumption expenditure of 34-year-old following of young
> people in a significant negative same month of the previous year of 11, seven
> percent decrease, compared to the total household average of 3.1% year on
> year decline was noticeable even. Government in order to raise the level of
> personal consumption to be sluggish, the determination and consumption
> stimulus measures of young people is essential. Rather than the benefits that
> potentially turn into savings is pointed out, we are considering the
> distribution of gift certificates. Details, such as low-income earners of
> interest and business scale is filled from April.
>
> According to the Cabinet Office survey, for which the straight-line benefits
> that were distributed in 2009, many of proportion to turn to the consumer
> from the elderly entitlements is more of the child-rearing households than
> the household, this time of the measures expected a certain effect on the
> consumption raise That's it. Per capita 3 27 fiscal distribute the yen
> supplementary budget of extraordinary benefits to the elderly of the
> low-income, objection such as "Why do you favor only the elderly" was out of
> the ruling and opposition parties. Ahead of the House of Councillors
> election, there is also aim to appeal to the support measures for young
> people.
>
>
>
> And so while some might liken it to Electronic Benefit Transfer cards ("EBT
> cards") in the US ... it appears this is simply a hidden way to directly hand
> out free money to those that spend (lower income) and force consumption
> (non-depositable or savable) and thus ... increase inflation ... So no need
> for firms to raise wages after all! Well played Abe.
>
>
>
>
>
> One wonders how much these "gift certificates" will trade for on the black
> market ... as we are sure some "spending" will be disallowed and require the
> use of cash - no sugary drinks ... no Fugu (google it) ... no Sumo
> tournaments ... and no BMW X6.
>
> And finally here is Charles Hugh-Smith {3} to destroy the idea that this
> works ...
>
>
>
> In sum, the psychology of punishing the productive and rewarding
> non-contributors is destructive to everyone. Have proponents forgotten that
> humans are prone to emotions such as resentment? Resentment goes both ways;
> the recipients of Basic Income will be getting by, but they won't be able to
> build capital or better their financial stake. They are in effect Basic
> Income Serfs.
>
> Proponents also believe that the loss of work will free everyone getting a
> basic income to become an artist, composer, musician, et cetera. As I noted
> in {4}, since meaningful work is the source of positive social roles, Hell is
> a lack of meaningful work.
>
> In the myopic view of the Basic Income proponents, humans are nothing but
> consumer-bots who chew through the Earth's resources in their limitless quest
> for more of everything - what the Keynesian Cargo Cult worships as "demand".
>
> Tragically, this blindness to humanity's need for meaning and the elevation
> of spiritually empty consumerism to a Secular Religion leaves the basic
> Income crowd incapable of understanding this timeless truth: the only
> possible result of robbing people of their livelihood is despair.
>
> Once meaningful work vanishes, so do positive social roles.
>
> This is why guaranteed income for all is just a new version of Socioeconomic
> Hell. Being paid to do nothing does not provide meaningful work or positive
> social roles, which are the sources of positive identity, pride, purpose,
> community and meaning.
>
> The petit-bourgeois fantasy of every individual flowering as an artist,
> musician and creator once freed of work is an abstraction, one born of the
> expansion of academic enclaves and private wealth-funded dilettantes
> fluttering from one salon to the next. (Ever notice how many trust-funders
> have therapists? Would they all need therapists if being freed from work
> automatically generated happiness and fulfillment?)
>
> These are precisely what basic income for all doesn't provide. To the degree
> that serfdom is political powerlessness and near-zero access to the processes
> of accumulating productive capital, guaranteed income for all is simply
> serfdom institutionalized into a Hell devoid of purpose, pride, meaning,
> community and positive social roles.
>
>
>
>
>
>
>
> As we previously detailed {5}, support is growing around the world for such
> spending to be funded by People's Quantitative Easing ("QE"). The idea behind
> "People's QE" is that central banks would directly fund government spending
> ... and even inject money directly into household bank accounts, if need be.
> And the idea is catching on.
>
>
>
> Already the European Central Bank is buying bonds of the European Investment
> Bank, an EU institution that finances infrastructure projects. And the new
> leader of Britain's Labor Party, Jeremy Corbyn, is backing a British version
> of this scheme.
>
> That's the monster coming to towns and villages near you! Call it "overt
> monetary financing". Call it "money from helicopters". Call it "insane".
>
> But it won't be unpopular. Who will protest when the feds begin handing our
> money to "mid- and low-income households"?
>
>
>
> Simply put, The Keynesian Endgame is here {6} ... as the only way to avoid
> secular stagnation (which, for the uninitiated, is just another
> complicated-sounding, economist buzzword for the more colloquial "everything
> grinds to a halt") is for central bankers to call in the Krugman Kraken and
> go full-Keynes.
>
>
>
> Rather than buying assets, central banks drop money on the street. Or even
> better, in a more modern and civilised fashion, credit our bank accounts!
> That, after all, may be more effective than buying assets, and would not
> imply the same transfer of wealth as previous or current forms of QE. Indeed,
> "helicopter money" can be seen as permanent QE, where the central bank
> commits to making the increase in the monetary base permanent.
>
> Again, crediting accounts does not guarantee that money will be spent - in
> contrast to monetary financing where the newly created cash can be used for
> fiscal spending. And in many cases, such policy would actually imply fiscal
> policy, as most central banks cannot conduct helicopter money operations on
> their own.
>
> ...
>
> So again, the thing to realize here is that this has moved well beyond the
> theoretical and it's not entirely clear that most people understand how
> completely absurd this has become (and this isn't necessarily a specific
> critique of SocGen by the way, it's just an honest look at what's going on).
> At the risk of violating every semblance of capital market analysis decorum,
> allow us to just say that this is pure, unadulterated insanity. There's not
> even any humor in it anymore.
>
> You cannot simply print a piece of paper, sell it to yourself, and then use
> the virtual pieces of paper you just printed to buy your piece of paper to
> stimulate the economy. There's no credibility in that whatsoever, and we
> don't mean that in the somewhat academic language that everyone is now
> employing on the way to criticizing the Fed, the ECB, and the BoJ.
>
>
>
> And it will end only one way ... {7}
>
>
>
> The monetizing of state debt by the central bank is the engine of helicopter
> money. When the central state issues $1 trillion in bonds and drops the money
> into household bank accounts, the central bank buys the new bonds and
> promptly buries them in the bank's balance sheet as an asset.
>
> The Japanese model is to lower interest rates to the point that the cost of
> issuing new sovereign debt is reduced to near-zero. Until, of course, the
> sovereign debt piles up into a mountain so vast that servicing the interest
> absorbs more than forty percent of all tax revenues.
>
> But the downsides of helicopter money are never mentioned, of course. Like QE
> (that is, monetary stimulus), fiscal stimulus (helicopter money) will be sold
> as a temporary measure that quickly [will] become permanent, as the economy
> will crater the moment it is withdrawn.
>
>
>
> The temporary relief turns out to be, well, heroin, and the Cold Turkey
> withdrawal, full-blown depression.
>
> Links:
>
> {1}
> http://www.zerohedge.com/news/2016-01-29/helicopter-money-arrives-switzerland-hand-out-2500-monthly-all-citizens
>
> {2}
> http://www.zerohedge.com/news/2016-03-07/helicopter-money-comes-canada-ontario-pledges-basic-income-experiment
>
> {3} http://www.zerohedge.com/news/2015-12-11/flaws-basic-income-everyone
>
> {4} http://www.oftwominds.com/blognov15/serfdom-hell11-15.html
>
> {5} http://www.zerohedge.com/news/2015-10-04/here-come-money-helicopters
>
> {6}
> http://www.zerohedge.com/news/2015-10-07/you-never-go-full-krugman-insane-helicopter-money-calls-continue-trapped-central-ban
>
> {7}
> http://www.zerohedge.com/news/2015-10-13/where-first-helicopter-drop-money-likely-land
>
> http://www.zerohedge.com/news/2016-03-23/japan-goes-full-krugman-plans-un-depositable-non-cash-gift-certificate-money-drop-yo
>
> https://billtotten.wordpress.com/
> http://www.ashisuto.co.jp
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