European money printing is starting off with purchases of government securities. But does that makes sense? Because new money will be channelled to the rich, who will mostly save it rather than spending it and boosting the economy. Is there not a more intelligent way of monetary easing? I think there is.
The institution of basic income reminds many people of socialism. You went to the factory, did nothing, then collected your wages. The difference is that now there is no need to go anywhere for your wages, but the government still interferes seriously with the distribution of income. Yet, basic income allows a much more human capitalism to be created, which continues to be driven by competition, but does not involve extreme poverty.
Bitcoin was the first money in history invented by the private sector and based solely on trust, for example, it is not backed by gold deposits. The initial scepticism about bitcoin was in fact due to the fact that since no one had seen anything like that previously, there were doubts about its viability. No one believed bitcoin. Its creation opened the road for the geniuses of the future to construct a monetary system that works much better than the one currently in place, while providing cutting-edge technology in its services.
Printing money is a monopoly of the government. And it is one of its most precious monopolies and since the government is one of the least innovative operators in the market, we should not be surprised that the structure of the monetary system is far from ideal.
the US has spent more overseas than what foreign countries buy from it, the difference currently being USD 40 billion per month. This raises two questions. Why indeed does the US not run out of money if it only flows out of the country? Why indeed do foreigners accept the dollar, and why do they participate in unsustainable processes?
I argued that instead of asset purchases or boosted lending, we could much more successfully avoid deflation and stimulate the economy by means of a monetary basic income financed from newly printed money. There are two principal problems with this idea.
The Fed would be much more efficient and it could achieve its target by printing much less money if it made its purchases of enormous value in the market of real goods rather than on capital markets. That is, by purchasing goods rather than bonds. In good measure, the central bank will go to the baker’s to fetch its donuts, to the pub for the regular pint, and to the hairdresser’s to get its hair trimmed, and will use newly printed money to pay for all that. That would be real economic stimulus and job creation, and we could say goodbye to deflation.