Its a Re-set

[Mega]

British NHS:-
"Mr Hancock said he is writing off £13.4bn of historic NHS debt to help now and for the future."

BOEING:-
"When the world emerges from the pandemic, the size of the commercial market and the types of products and services our customers want and need will likely be different,” Chief Executive Officer David Calhoun said in a message to employees Thursday. “It’s important we start adjusting to our new reality now.”

One by one Starting with muti-nationals & ending in the village shop, expect MEGA unemployment, factory closures & downsize-ing.

The Western economies are being to told & are "Clearing House".

Interesting times Indeed.

Mike

[GRG55]

Re: Its a Re-set

British NHS:-
"Mr Hancock said he is writing off £13.4bn of historic NHS debt to help now and for the future."

BOEING:-
"When the world emerges from the pandemic, the size of the commercial market and the types of products and services our customers want and need will likely be different,” Chief Executive Officer David Calhoun said in a message to employees Thursday. “It’s important we start adjusting to our new reality now.”

One by one Starting with muti-nationals & ending in the village shop, expect MEGA unemployment, factory closures & downsize-ing.

The Western economies are being to told & are "Clearing House".

Interesting times Indeed.

Mike

For many (most?) enterprises existing business plans have been rendered useless.

But no matter what the CEO of Boeing says, at this moment neither Boeing nor practically any other business enterprise has any ability to see through this viral fog and define this "new reality" with any confidence. He may want to "start adjusting", but we are all making it up as we go.

And that usually means a lot of expensive mistakes are likely to occur.

[thriftyandboringinohio]

Re: Its a Re-set

It really is a thing without equal in business. When we close the books on April, most businesses will have the majority of their customers delinquent on accounts receivable, and will themselves be delinquent on most of their accounts payable. The grocer stiffed the baker on the bread invoice; the bakery stiffed the landlord on the rent; the landlord stiffed the bank on the mortgage.

There's something like 32 million businesses the US, and at least half of them will be in this spot. Everybody bankrupt at the same time.

[GRG55]

Re: Its a Re-set

It really is a thing without equal in business. When we close the books on April, most businesses will have the majority of their customers delinquent on accounts receivable, and will themselves be delinquent on most of their accounts payable. The grocer stiffed the baker on the bread invoice; the bakery stiffed the landlord on the rent; the landlord stiffed the bank on the mortgage.

There's something like 32 million businesses the US, and at least half of them will be in this spot. Everybody bankrupt at the same time.

Yes, the circulation of money involved in productive activity comes to a sudden halt. Dr. Bernanke's "helicopter money" is about the only policy I can see that might be effective in slowing the descent. But the USA has, once again, chosen to bail out corporations like Boeing at the expense of its citizens.

In the meantime the goldbugs say stash it into bullion (which doesn't do the economy any good), and the investment bank computerized algos swing the financial markets like a yo-yo on every TrumpTweet.

[jk]

Re: Its a Re-set

Yes, the circulation of money involved in productive activity comes to a sudden halt. Dr. Bernanke's "helicopter money" is about the only policy I can see that might be effective in slowing the descent. But the USA has, once again, chosen to bail out corporations like Boeing at the expense of its citizens.

in his famous "making sure 'it' doesn't happen here" speech, bernanke presented the helicopter as the final, ultimate weapon against a deflationary spiral. but, as an expert on the great depression, he was only thinking of a demand shock, keynes' fallacy of composition.

you can helicopter drop as much as you want, but if production is shut down, i.e. we also have a supply shock, all the money will do is feed inflation, pay down debt, or increase savings, none of which helps the economy much in these circumstances, because they don't increase supply.

In the meantime the goldbugs say stash it into bullion (which doesn't do the economy any good),

for every goldbug who buys bullion there is a seller who gets the payment. the money doesnt disappear. unfortunately it doesn't add much to demand, assuming the seller is wealthy. and it certainly doesn't do anything for supply.

[Mega]

Re: Its a Re-set

I honesty don't know how far this will go.
I mean everyone is bust, but if there is some sort of "Debt Jubilee"......& then drop cash to re-start things.

Its radical, but given where we are..........

[jk]

Re: Its a Re-set

I honesty don't know how far this will go.
I mean everyone is bust, but if there is some sort of "Debt Jubilee"......& then drop cash to re-start things.

Its radical, but given where we are..........

we are in the midst of the debt jubilee, which will take the form of "poom," a burst of significant inflation. you don't print and throw around trillions of dollars in the face of supply constraints without raising prices. the big moment will be when it feeds into salaries and wages.

[Mega]

Re: Its a Re-set

Yes, but will it mean "Spike inflation" that fades or real on going inflation, that would force them to lift rates back up to 4-6% ?

What might happen is they print like Bastards ......then it all crashes EVERYWHERE ......With the Central banks now blized they have to go to the IMF.

There is than a "Grand Deal"......not like the Plaza accord, more like Brenten Woods......a NEW WORLD ORDER.

The East agrees to bank roll with SDR's from the IMF (Backed by Gold?).
The Western pigs then try to go back to "Normal" (let me assure you the last 20 years have been far from normal) & try to inflate their way forward ///& gets its ass kicked by the IMF.

Mike

[thriftyandboringinohio]

Re: Its a Re-set

we are in the midst of the debt jubilee, which will take the form of "poom," a burst of significant inflation. you don't print and throw around trillions of dollars in the face of supply constraints without raising prices. the big moment will be when it feeds into salaries and wages.

J K Galbraith said " The process by which banks create money is so simple the mind is repelled"
It's true - there are some simple concepts that repel the mind.

Putting all the helicopter money into the hands of individual breathing human beings is one such idea, so simple the mind is repelled. The resulting burst of inflation would subside as the economy restarts all the supply chains. A helicopter drop is the only action I have heard about that can create a massive broad demand surge of cash orders that can move up the supply chains. I don't see the value of granting money to a steel producer who has no end user customers trying to buy steel products.

[GRG55]

Re: Its a Re-set

in his famous "making sure 'it' doesn't happen here" speech, bernanke presented the helicopter as the final, ultimate weapon against a deflationary spiral. but, as an expert on the great depression, he was only thinking of a demand shock, keynes' fallacy of composition.

you can helicopter drop as much as you want, but if production is shut down, i.e. we also have a supply shock, all the money will do is feed inflation, pay down debt, or increase savings, none of which helps the economy much in these circumstances, because they don't increase supply.



for every goldbug who buys bullion there is a seller who gets the payment. the money doesnt disappear. unfortunately it doesn't add much to demand, assuming the seller is wealthy. and it certainly doesn't do anything for supply.

Well this is a chicken and egg thing perhaps. In my mind the helicopter money is needed to spur demand, not production. Production will follow from demand if it's needed. Things like paying rent, buying groceries, the utility bills and so forth. That gets money moving around the economy. The helicopter money should be direct injections of cash for individuals and families and perhaps SMEs to replace some of the income from job/customer losses.

Sending money to corporations like Boeing isn't going to do anything to create demand or get the economy moving.

[Mega]

Re: Its a Re-set

[Mega]

Re: Its a Re-set

Meantime:-

[Milton Kuo]

Re: Its a Re-set

the big moment will be when it feeds into salaries and wages.

Illegal aliens and incompetent idiots on H1-B visas will take care of that.

[thriftyandboringinohio]

Re: Its a Re-set

Illegal aliens and incompetent idiots on H1-B visas will take care of that.

That's certainly the method of holding down wages that is most tried and true.

[jk]

Re: Its a Re-set

harald malmgren: CBs privately hope for significant inflation resulting from their bold liquidity measures, but assumed underlying strength of economies is illusion. Stagflation likely settles in for an extensive period before a potential inflation wave