The Helicopters Fly on for Now, but One Day They Will Crash

‘Helicopter money’ is not sustainable in the long run, writes Tom Stevenson

by Tom Stevenson

We are sailing through uncharted waters. Interest rates have been close to zero for seven years across the developed world. Investors are paying for the privilege of lending money to their governments. Stock and bond markets, which usually move in different directions, are simultaneously hitting record highs in the face of a corporate earnings retreat and Brexit threatening the UK and Europe with recession. These are not normal times.

If you think all of this is odd, prepare yourself for things to get a whole lot stranger. That whirring in the background is the sound of helicopters preparing to drop trillions of yen on the streets of Tokyo. The Bank of Japan meets next week to decide whether to lead the world ever deeper into an Alice in Wonderland world of experimental monetary policy.

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