Second Fed President Calls For More Free Money

Mish

Richmond Fed President Thomas Barkin issued a video call today for more free money.

Free Money

Thomas Barkin joins Minneapolis Fed President Neel Kashkari in the free money call. 

Barkin says the Economy Faces 'Sinkhole' Without More Fiscal Support.

“Four months ago, when we did the first stimulus, we thought the economy faced a pothole and the stimulus put a plate over it so we could navigate. Now escalation of the virus may be making that pothole into a sinkhole and creating a need for a longer plate,” Barkin said in webcast remarks to the Northern Virginia Chamber of Commerce. “If Congress takes support away too abruptly ... the unemployed, their landlords, the places they shop will then feel the full brunt.”

This is a second attempt by a Fed president to get Congress to extend $600 weekly unemployment checks.

Yesterday I commented Fed’s Kashkari Urges Congress to Hand Out More Free Money

“So while historically we would worry about racking up too much debt, we’re generating the savings ourselves. That means Congress has the resources to support those who are most hurting,” he said.

Right now the U.S. can fund itself at very, very low rates. Congress should use this opportunity to support the American people and the American economy.”

If we were to lock down hard for a month or six weeks, we could get the case count down so that our testing and our contact tracing was actually enough to control it,” Kashkari said.

We Owe Ourselves

We owe the money to ourselves, so let's lock the economy down for six weeks and see what happens.

In other news, I put a signed "I Owe Me" $1,000,000 note in my piggybank today so I have an extra million to spend at 0% interest, the amount of interest I am charging myself.

Six Week Lockdown

Kashkari proposes the path Melbourne Australia has taken.

"Where you slept last night is where you'll need to stay for the next six weeks," said Daniel Andrews, premier of Victoria.

Only one person per household will be allowed to leave their homes once a day -- outside of curfew hours

For details, please see Millions Locked Down Under Draconian Covid Rules in Australia.

Fed Independence?

The Fed hollers every time Trump or Congress meddles in monetary policy, but the Fed repeatedly meddles in fiscal policy.

And here's a new one: The Fed is willing to interject its beliefs about medical policy as well.

Mish

Comments (72)
No. 1-23
anoop
anoop

Don't know about you guys, but I've been the beneficiary of trickle down free money, like forever. So I fully support all the fed presidents that want more free money. It will add to the trickle, hopefully, turning it into a bigger trickle.

Jojo
Jojo

Yea! Comments are back.

Looks like the Fed is becoming the defacto leader and policy setter for the USA.

Jojo
Jojo

"“If we were to lock down hard for a month or six weeks, we could get the case count down so that our testing and our contact tracing was actually enough to control it,” Kashkari said."

But let's say he is wrong. What kind of skin is he willing to personally put into the game to make up for a bad call? His net worth?

Bam_Man
Bam_Man

He's Barkin' Mad.

numike
numike

when do I get my check??

aqualech
aqualech

I guess it makes as much sense as having the Fed paying a premium to buy up bonds from big Wall Street firms that loaded up on them when the price was down. However, it sounds more like bread and circus to quell the masses, all the same.

Tony Bennett
Tony Bennett

"Right now the U.S. can fund itself at very, very low rates. Congress should use this opportunity to support the American people and the American economy.”

...

Right now.

And in a year? 5 years?

Low rates just means everyone ... and I do mean EVERYONE ... hits the debt trough for second and thirds. At SOME point the debt burden will be so great entities won't even be able to service it absent severe cuts to current consumption (or in the case of govt debt, raise taxes).

ksdude69
ksdude69

Since when are a bunch of stupid ass bankers medical experts! Here's what you get with a hard shutdown: More destroyed businesses and more people dependent on them. This is all way too fishy.

Realist
Realist

Item one: Congress giving away more money to everyone.

Interesting how they are willing to give $1200 away without conditions to so many who don’t actually need it. (Not to mention billions to corporations, political organizations, etc). But they want to put conditions and restrictions on giving $600 to the unemployed who actually do need it.

I also find it fascinating that politicians who earn $174,000 - $223,500 each year find it offensive that some poor unemployed person receiving $600 might be making more than they did when they were working.

Item 2: A severe 6-week lockdown in Australia because they had more than 600 cases in a single day. You seem to be wondering why the draconian measures for such small numbers?

I suspect that it’s a case of the government trying to impress how serious this is on its citizens. By overplaying it, the hope is that people will follow the rules, crush the curve, and then they can lift the restrictions much sooner than 6 weeks.

As in all countries that are re-opening, there will inevitably be some surges in new cases. The goal is to identify the surges and crush them to prevent the pandemic from getting out-of-control.

On the other extreme, you have the US, which is attempting to re-open everything while the pandemic is still raging out-of-control in many states.

The way the US is going, there will be well over 200,000 deaths and hundreds of thousands with long term health problems. And the economy will still be crappy, because so many people will be afraid to go out.

Yesterday numbers from Worldometer

Cases:Deaths

Australia 641:7

Canada 285:4

Italy 238:8

US 49,038:467

I laugh everytime I hear Trump crow about how well the US is doing compared to other countries. I guess he believes that if you keep repeating the same lie over and over, that eventually people will think it is true.

nzyank
nzyank

Headline - "Millions live free of virus after successful "Draconian" lockdown in NZ.
We promptly fixed our pothole before it could get bigger. Too many idiots in the US for this sensible strategy to work there. Individual rights and freedom are fine, but to enjoy these, it is also necessary to have a culture of taking individual responsibility (and not just for oneself), which starts at the top.

Note that US government debt is very different from individual debt. I keep seeing them being treated as the same thing, including in the above post. The US is one of the wealthiest countries, and can easily afford the extra gov spending. Just search "wealth by country" on google. I really don't get those that complain about extra gov spending when its needed, as long as the spending is done in a fair and transparent manner...oh...

Roger_Ramjet
Roger_Ramjet

"We're generating the savings ourselves"

What a statement. Not only do these bozos on the Fed not understand inflation, now they are having a hard time understanding the concept of savings.

bradw2k
bradw2k

The richies know that the next Occupy Wallstreet will make the last one look like a game. Class warfare will get very ugly as soon as it becomes clear enough to enough people that they are going backwards while connected twits like this keep counting their millions without a care in the world.

Six000mileyear
Six000mileyear

Based on one of Mish's earlier blogs, the free money is being used to pay off credit cards, which reduces defaults of UNSECURED credit. "Free money" is about saving banks more than the economy.

Stuki
Stuki

"we’re generating the savings ourselves."

No, illiterate monkeyboy; "We" are not. Printing money is not "generating savings". Hence you are not generating savings. Hence no "we" that you are part of, is generating savings. I do understand comprehension of even the simplest of logic, effectively bars one from admission to any position of influence in progressive dystopias, but that doesn't mean logic somehow has been banished. Just that all idiots in all positions of power, are in fact, tah-dah, idiots.

Instead what "you" are proposing, is not to "generate savings." But rather to, as always, steal; by way of debasement; the savings someone else has "generated." So that you can then spend it. Such that then, even those guys no longer have any savings, despite having originally generated some. Then; what does stupid little you, think will then happen to those people's willingness to generate further saving,s as a result of this having it stolen from them? Or, more accurately, what would stupid little you think would happen; if you did, in fact, posess the aptitude to actually engage in sometime as quaint as thinking?

numike
numike

Hows that in person school re-opening going there in Manatee County FL?? Samoset Elementary employees sent home by COVID-19. It was teachers’ first day back

Mr. Purple
Mr. Purple

Having the world's dominant military and reserve currency means never having to repay your debts. Who's gonna collect?

Open the floodgates. 100 trillion isn't enough.

humna909
humna909

Since Melbourne was brought back up again I figure I'll leave my comments here. I live in Melbourne.

Regarding mishes questions:
~~What's Going On?~~
Australia has had minimal covid cases since May. An outbreak occurred in Melbourne and the state and country want to get it under control.

~~Do these measures fit the outbreak?~~
In the context of Australia. Yes. In the context of the US. No. Melbourne's new daily cases per capita are still half that of the US and vastly lower than severe outbreaks in the US.

~~What if someone was in a hotel? Someone else's house?~~
That is taking the comments too literally. People are to stay in their primary place of residence.

Melbourne has gone into 80% lockdown due to the desire to get rid of the virus. It is what is necessary IF that is your goal. New Zealand achieved this successfully with an even stronger lockdown than what Melbourne has now.

Australia got close to achieving this with much lighter restrictions but due to some mistakes and bad luck, it resurged in Melbourne. The rest of Australia is doing mostly fine and they are going to keep their borders shut to other states and especially Victoria (Melbourne) until things are under control. This latter point has helped push Victoria into the strong measures.

It is my belief that most of Melbourne's populace is reluctantly accepting the need for these 'draconian' measures. Certainly all my peers are accepting them. Of course you will get plenty of people complaining about them, Aussies are exceptionally good at complaining. But we will largely and compliantly accept it.

Herkie
Herkie

And maybe this is the reson why. Just look at this chart. This is true depression era off the cliff information:

nzyank
nzyank

"Over 100 CEOs beg Congress: Don't let small businesses fail permanently" https://us.yahoo.com/finance/news/over-100-ce-os-beg-congress-dont-let-small-businesses-fail-forever-175536533.html
If the "Free Money" is not released, the long term damage to the economy will be quite expensive. This should preferably be a result of considered planning and actions taken by our elected president and congress, instead of emergency measures by the Fed. Whining about some poor bloke unfairly benefiting, or that it is only meant to bail out the banks, is just that. People are important, banks are important, and its the the job of our president and congress to figure out how to do this fairly and transparently in the best interest of the country and its people.

Augustthegreat
Augustthegreat

Why doesn't the government just print and give $1 billions to every citizen? The american people own all the money anyway.

The Window Cleaner
The Window Cleaner

Monetary Gifting is the new paradigm. The pandemic is a huge teaching moment about the efficacy of direct and reciprocal monetary gifting. Now all we need to recognize is that a 50% discount at retail sale by every retail merchant, all of which
is rebated back to that merchant by the monetary authority, and everyone's purchasing power is doubled. Thus both systemic and individual monetary scarcity and inflation are resigned to the dust bin of history.

debracarter
debracarter

Isn't it nice to have assets, & borrow from yourself! Well, that's what the gvmt is doing. I like the comment about zero interest & a $1m, note to self. Now, the % rate is less than 3%-. Most consumers have never seen that %, ( in boomers days.) 12% in WA. St. 70/80's & that was cheap compared to the south @ 20-30%. Geez, I would still be in my house. Thanks a lot!


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