from Zero Hedge
The G7 countries’ finance ministers recently ended their two-day meeting in Sendai, Japan, without an agreement on any economic policy issues, including those surrounding the recent sharp appreciation of the yen. The unwillingness of policymakers to address Japan’s fervent appeals for exchange rate intervention may inadvertently hasten the implementation of helicopter money by Japan and other industrialized nations.
“Helicopter money”—named after Milton Friedman’s colorful metaphor for an increase in public spending or a tax cut that is financed by a permanent increase in the money stock—is a central bank’s last resort to stoke inflation, devalue the currency and induce consumer spending. Stuck with a moribund economy and a strengthening yen, if the Bank of Japan’s (BOJ) monetary policy cannot get sufficient support from fiscal policymakers or from other central banks around the world, it may not be left with any other choice.