From Crazy to Crazier

Considering how often “helicopter money” has been mentioned in the mainstream financial press of late, it is probably going to be on the agenda fairly soon. The always dependable Martin Wolf at the FT – who has never seen a printing press he didn’t think could solve all our economic problems – has come out forcefully in favor of the idea. See for instance his recent screed “The case for helicopter money”, followed by the promise – or rather, the threat – that “Helicopter drops might not be far away”.


wolf-2The most vociferous establishment mouthpiece for more statism, more central economic planning, and specifically, more money printing: Financial Times chief economics commentator Martin Wolf – a dangerous money crank.

Screenshot via


What is truly funny is that Wolf actually argues that the money supply hasn’t grown enough! He is pointing to an esoteric money supply measure, so-called “divisia money” – apparently he found the one and only “money supply” measure that is coming to this absurd conclusion. However, money can be clearly defined and identified, and the true US money supply has increased by more than 120% since 2008 (this is to say, more money has been printed in the past 7 years than in the entire previous history of the modern fiat dollar). Here is Wolf:


Measures of broad money have stagnated since the crisis began, despite ultra-low interest rates and rapid growth in the balance sheets of central banks. Data on “divisia money” (a well-known way of aggregating the components of broad money), computed by the Center for Financial Stability in New York, show that broad money (M4) was 17 per cent below its 1967-2008 trend in December 2012. The US has suffered from famine, not surfeit.”


And this is what this alleged stagnation in money supply growth, a.k.a. the “money famine” actually looks like:


Money famineUS money supply TMS-2. Obviously, it is high time the helicopters were warmed up! – click to enlarge.


Interestingly, Wolf admits in the very same article that “Central banks can indeed drive the prices of bonds, equities, foreign currency and other assets to the moon”, but he apparently seems to think that no money is needed for doing so. Please note: this guy is actually a trained economist.

After rambling on about the failure of the very policies he has sotto voce advocated to date, Wolf naturally comes to the misguided and dangerous conclusion that even more State intervention is needed. By golly, we will be printed to prosperity, by hook or by crook!


[T]he case for using the state’s power to create credit and money in support of public spending is strong. The quantity of extra central bank money required would surely be smaller than under today’s scattergun quantitative easing. Why not employ monetary financing to recapitalise commercial banks, build infrastructure or cut taxes? The case for letting fiscal deficits facilitate private deleveraging, without undue expansion in overt public debt, is surely also strong.

What makes this policy so powerful is the combination of fiscal spending with monetary expansion: Keynesians can enjoy the former; monetarists the latter.”


(emphasis added)

The fact that both Keynesians and Keynesians-in-drag “enjoy” this dangerous nonsense is of course precisely why it should be avoided at all costs. As to the question “why not”, we would point A) to sound monetary theory (someone should really send this guy a copy of Mises’ “The Theory of Money and Credit”. It certainly seems he will have to start from scratch if he ever wants to say anything on the topic of money that doesn’t sound like the most moronic idea ever) and B) centuries of experience, beginning with the Roman Emperor Diocletian up to whoever is running Venezuela’s central bank at present.


Money cranksFamous money cranks throughout history, who managed to completely ruin entire economies by pursuing the policies Mr. Wolf advocates with the required dedication: Roman emperor Diocletian (who continually lowered the silver content of Roman coins, and then tried to counter the effects with price controls), John Law (a Scotsman who managed to plunge the continental European economy into a more than 60 year long on-and-off depression) and German central banker Rudolf Havenstein (a strong believer in G. F. Knapp’s “State Theory of Money”, the bible of Chartalists, or “modern monetary theorists” as they call themselves today).



It was not too long ago when people like Mr. Wolf or Lord Adair Turner (whom Wolf mentions in an appeal to authority – Turner also supports employing the printing press in ever more extreme ways, i.e., he is yet another member of the John Law school of economics) would have been laughed out of the room. Believe it or not, there once was a time when economists actually knew what the difference between money and wealth is and were aware of the dangers of money printing.

However, as the modern-day resurrection of Keynesianism from the grave it was presumed to have disappeared into in the 1970s shows, no economic idea is bad enough not to be warmed up over and over again by statism’s intellectual handmaidens. Mr. Wolf knows most of the bureaucratic and political elite involved in central planning personally, and it is fair to assume that his jeremiads have to be taken as serious warnings of what is actually already in the pipeline.

Prepare accordingly.


Chart by St. Louis Federal Reserve Research



Emigrate While You Can... Learn More



Dear Readers!

It is that time of the year again – our semi-annual funding drive begins today. Give us a little hand in offsetting the costs of running this blog, as advertising revenue alone is insufficient. You can help us reach our modest funding goal by donating either via paypal or bitcoin. Those of you who have made a ton of money based on some of the things we have said in these pages (we actually made a few good calls lately!), please feel free to up your donations accordingly (we are sorry if you have followed one of our bad calls. This is of course your own fault). Other than that, we can only repeat that donations to this site are apt to secure many benefits. These range from sound sleep, to children including you in their songs, to the potential of obtaining privileges in the afterlife (the latter cannot be guaranteed, but it seems highly likely). As always, we are greatly honored by your readership and hope that our special mixture of entertainment and education is adding a little value to your life!


Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke


3 Responses to “The Helicopter Wolf at the Door”

  • Crysangle:

    The FT is now owned by Japanese Nikkei , is it not ?

  • DismalScienceMonitor:

    What Martin Wolf and Ben Bernanke failed to tell us about helcopter money was that the choppers were only going to drop the money on the banks that own the Fed, Bank of England, etc., who are also the beneficiaries of NIRP.
    (he seems to want to pretend that banks are going to pay YOU to borrow money from them, but you are not paying his salary. Simple stimulatory mesures such as terminating automatic withholding from workers’ paychecks are never considered, as that would involve putting faith in the people that they would eventually pay their taxes (withholding did not start until WWII, by the way.)

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • 5-cotmmrangegc03Ganging Up on Gold
      So Far a Normal Correction In last week's update on the gold sector, we mentioned that there was a lot of negative sentiment detectable on an anecdotal basis. From a positioning perspective only the commitments of traders still appeared a bit stretched though, while from a technical perspective we felt that a pullback to the 200-day moving average in both gold and gold stocks shouldn't be regarded as anything but a normal - and in this case actually long overdue -...
  • gold_bullionGold Sector Correction – Where Do Things Stand?
      Sentiment and Positioning When we last discussed the gold sector correction (which had only just begun at the time), we mentioned we would update sentiment and positioning data on occasion. For a while, not much changed in these indicators, but as one would expect, last week's sharp sell-off did in fact move the needle a bit.   Gold - just as nice to look at as it always is, but slightly cheaper since last week. Photo via The Times Of India   The commitments of...
  • wryAustralian property bubble on a scale like no other
      Australian property bubble on a scale like no other Yesterday Citi produced a new index which pinned the Australian property bubble at 16 year highs:   Bubble trouble. Whether we label them bubbles, the Australian economy has experienced a series of developments that potentially could have the economy lurching from boom to bust and back. In recent years these have included:    the record run up in commodity prices and subsequent correction;  the associated...
  • andy-duncan-and-claudio-grassA Looming Banking Crisis – Is a Perfect Storm About to Hit?
      Andy Duncan Interviews Claudio Grass Andy Duncan of has interviewed our friend Claudio Grass, managing director of Global Gold in Switzerland. Below is a transcript excerpting the main parts of the first section of the interview on the problems in the European banking system and what measures might be taken if push were to come to shove.   Andy Duncan of (left) and Claudio Grass of Global Gold (right)   Andy Duncan: How do you see the...
  • urban_ii_croppedPope Francis: Traitor to Western Civilization
      Disqualified There has been no greater advocate of mass Muslim migration into Europe than the purported head of the Catholic Church, Pope Francis.  At a recent conference, he urged that “asylum seekers” be accepted, “through the acts of mercy that promote their integration into the European context and beyond.”*   Before we let Antonius continue with his refreshingly politically incorrect disquisition, we want to remind readers of two previous articles that have...
  • 9-market-internalsBubble Dissection
      The Long Term Outlook for the Asset Bubble Due to strong internals, John Hussman has given the stock market rally since the February low the benefit of the doubt for a while. Lately he has returned to issuing warnings about the market's potential to deliver a big negative surprise once it runs out of greater fools. In his weekly market missive published on Monday (entitled “Sizing Up the Bubble” - we highly recommend reading it), he presents inter alia the following eye-popping...
  • spankinggoodtimeUS Stock Market - a Spanking May be on its Way
      Iffy Looking Charts The stock market has held up quite well this year in the face of numerous developments that are usually regarded as negative (from declining earnings, to the Brexit, to a US presidential election that leaves a lot to be desired, to put it mildly). Of course, the market is never driven by the news – it is exactly the other way around. It is the market that actually writes the news. It may finally be time for a spanking though.   Time for some old-fashioned...
  • "What if we don't change at all ... and something magical just happens?"Prepare for the Unthinkable
      Red Ink Growth and profits mask a variety of problems.  They hide business inefficiencies and the money suck of corporate adminis-trivia.  They also conceal unproductive staff.   The final career leap   But most of all growth and profits obscure the extreme value subtracting forces of bloated management teams.  During good times it is unclear what these smug fellows do.  During bad times it is lucidly clear that most of them ain’t worth a darn. When the...
  • fischersDoomed to Failure
      Larded Up and Larded Over We’ve been waiting for the U.S. economy to reach escape velocity for the last six years.  What we mean is we’ve been waiting for the economy to finally become self-stimulating and no longer require monetary or fiscal stimulus to keep it from stalling out.  Unfortunately, this may not be possible the way things are going.   As Milton Jones once revealed: “A month before he died, my grandfather covered his back in lard. After that, he went...
  • larry-1Meet Your New Stimulus Allocation Czar
      March Towards Midnight The march towards midnight is both stirring and foreboding.  Like a death row inmate sitting down to savor his last meal, a grim excitement greets the reality of impending doom.  Thoughts of imminent mortality haunt each bite.   Tic-toc, tic-toc...   As far as the economy’s concerned, there’s no stopping its march towards midnight.  The witching hour’s rapidly approaching.  We intend to savor each moment and make the best of...
  • state_police_980_600_s_c1_t_c_0_0_1Are the Deep State’s Drones Coming for You?
      What’s Aleppo?   Look out kid Don’t matter what you did Walk on your tip toes Don’t try "No Doz" Better stay away from those That carry around a fire hose Keep a clean nose Watch the plain clothes You don’t need a weather man To know which way the wind blows – “Subterranean Homesick Blues,” Bob Dylan   The entrance to Baghdad's “Green Zone”. Photo credit: Karim Kadim / AP   DELRAY BEACH, Florida – Biggest foreign policy blunder...
  • speculatorInterview with Doug Casey
      Natalie Vein of BFI speaks with Doug Casey   Our friend Natalie Vein recently had the opportunity to conduct an extensive interview with Doug Casey for BFI, the  parent company of Global Gold. Based on his decades-long experience in investing and his many travels, he shares his views on the state of the world economy, his outlook on critical political developments in the US and in Europe, as well as his investment insights and his approach to gold, as part of a viable strategy for...

Austrian Theory and Investment

Support Acting Man

Own physical gold and silver outside a bank




Realtime Charts


Gold in USD:

[Most Recent Quotes from]



Gold in EUR:

[Most Recent Quotes from]



Silver in USD:

[Most Recent Quotes from]



Platinum in USD:

[Most Recent Quotes from]



USD - Index:

[Most Recent USD from]


THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

Buy Silver Now!
Buy Gold Now!