July 2016 – ADIFO Global Market Review

by Kevin Burrows

Helicopter Money is Coming . . .

Global central banks, particularly those in Europe and Japan, are growing increasingly desperate in their attempts to stimulate consumer spending. First conceived in 1969 by Milton Friedman, the underlying principle of helicopter money is that central banks can theoretically introduce newly printed money to directly increase the supply of money. In other words, think of a helicopter dropping fresh new $100 bills into the hands of eager consumers below. The money then gets spent into the real economy without recourse to current slow and unpredictable measures like purchasing financial assets.