Helicopter Money: Global Central Banks Consider Distributing Money Directly To The PeopleBy Michael Snyder So as they rapidly run out of ammunition, global central bankers are now openly discussing something that might sound kind of crazy. According tothe Telegraph, central banks are becoming increasingly open to employing a tactic known as helicopter money Faced with political intransigence, central bankers are openly talking about the previously unthinkable: helicopter money. A catch-all term, helicopter drops describe the process by which central banks can create money to transfer to the public or private sector to stimulate economic activity and spending. Long considered one of the last policymaking taboos, debate around the merits of helicopter money has gained traction in recent weeks. Do you understand what is being said there? The idea is basically this central banks would create money out of thin air and would just give it to national governments or ordinary citizens. So who would decide who gets the money? Well, they would. If you are anything like me, this sounds very much like Pandoras Box being opened. But this just shows how much of a panic there is among central bankers right now. They know that we are plunging into a new global economic crisis, and they are desperate to find something that will stop it. And if that means printing giant gobs of money and dropping it from helicopters over the countryside, well then that is precisely what they are going to do. In fact, the chief economist at the European Central Bank is quite adamant about the fact that the ECB can print money out of thin air and distribute it to people when the situation calls for it ECB chief Mario Draghi has refused to rule out the prospect, saying only that the bank had not yet discussed such matters due to their legal and accounting complexity. This week, his chief economist Peter Praet went further in hinting that helicopter drops were part of the ECBs toolbox. All central banks can do it, said Praet. You can issue currency and you distribute it to people. The question is, if and when is it opportune to make recourse to that sort of instrument. Apparently memories of the Weimar Republic must have faded over in Europe, because this sounds very much like what they tried to do. I dont know why anyone would ever want to risk going down that road again. Here in the United States, the Federal Reserve is not openly talking about helicopter money just yet, but that is only because the stock market is doing okay for the moment. Most Americans dont realize this, but the primary reason why stocks are doing better in the U.S. than in the rest of the world is because of stock buybacks. According toWolf Richter, corporations spent more than half a trillion dollars buying back their own stocks over the past 12 months During the November-January period, 378 of the SP 500 companies bought back their own shares, according to FactSet. Total buybacks in the quarter rose 5.2% from a year ago, to $136.6 billion. Over the trailing 12 months (TTM), buybacks totaled $568.9 billion. When corporations buy back their own stocks, that means that they are slowly liquidating themselves. Instead of pouring money into new good ideas, they are just returning money to investors. This is not how a healthy economy should work. But corporate executives love stock buybacks, because it increases the value of their stock options. And big investors love them too, because they love to see the value of their stock holdings rise. So we will continue to see big corporations cannibalize themselves, but there are a couple of reasons why this is starting to slow down. Number one, corporate profits are starting to fall steadily as the economy slows down, so there will be less income to plow into these stock buybacks. Number two, many corporations have used debt to fund buybacks, but now it is getting tougher for corporations to get new funding as corporate defaults rise. As stock buybacks slow, this is going to put downward pressure on the market, and we will eventually catch up with the rest of the planet. At this point, many experts are still calling for stocks to fall by another 40, 50 or 60 percent from current levels. For example, the following comes fromJohn Hussman When the SP 500 does fall that much eventually, the Federal Reserve will respond with emergency measures. So, yes, we may see helicopter money employed in Japan and in Europe first, but we will see it here someday, too. I know that a lot of people out there are feeling pretty good about things for the moment because U.S. stocks have rebounded quite a bit lately. But remember, the fundamental economic numbers just continue to get even worse. Just today we learned that existing home sales in the United States had fallen by the most in six years. That is definitely not a sign that things are getting better, and I keep trying to warn people that tumultuous times are dead ahead. And if global central bankers did not agree with me, they would not be talking about the need for helicopter money and other emergency measures. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here. The 1percent need to be taxed more. No one should be allowed to have so much wealth while others are going without food and shelter. This state of affaires is tottaly unacceptable in a civilized society. The question is, Is our capitalist based country really civilized? Wow, you really need to get a clue. I agree about the criminal cabal running Wall Street. We should have arrested the bankers like Iceland did not bailed them out. However, many of the one percent made their money honestly via many unfair loopholes in the tax code as part of Reganomics. There are many parts of the tax code that need to be changed to make a more fair system. I,m very afraid that by the time the poorer people in the US ever see any of that Helicopter Money it will be Too late or the money wont be worth much, if anything! And I bet if it werent for the super rich 1%ers buying multiple expensive homes and 20million$$ mansions , then the very low home buying figures would be a whole lot lower and worse than they are. Hi my name is J.P. Goldman, Ill be expecting a check for $6 Trillion or so. Depends how much you pay for my collection of Lance Armstrong memorabilia. 2-3 million on the cent sounds good. 