Are governments acting illegally as they print ever greater sums of cash?

Helicopter economics – giving money to citizens proposed by Milton Friedman the economist who advised Reagan and Thatcher. It was also seen as a way by Ben Bernanke to kick start the Japanese economy in the 1990s

However, most governments in an effort to stimulate their economies and keep business alive are encouraging them to borrow yet more  and more money and add to an already a massive mountain of debt globally

However, ‘Monetary financing’ is illegal i.e. when a central bank creates money to buy government bonds enabling the government to in effect spend without limits. In 2014 it  was prohibited for the ECB to do this, indeed its QE programme has already been questioned by the German constitutional court

A member of the BoE’s monetary policy committee, which sets interest rates recently said “If we were the central bank of the Weimar Republic or Zimbabwe, the mechanical transactions on our balance sheet would be similar to what is actually happening in the UK right now. That is not where you would find the smoking gun,”  Because the B of E is independent of the Government, so technically it is not ‘Monetary Financing’ – even though it may look, swim and quack like a duck!!!

Only 41% of Americans have emergency savings of $1,000 or more

33% of Brits have savings of less than £1,500

There are only 15 companies in the S&P 500 that are net cash positive

In Q1 2019 bankruptcies were highest in 5 years

Chapter 11 bankruptcies could triple in the USA based on what happened in 2008

Most governments were not prepared for covid-19 and in a desperate effort to save lives have locked down their economies and turned on the printing presses. The potential ensuing recession could tip many companies in to bankruptcy

James Mather, barrister specialising in insolvency, fraud and company litigation “once the lockdown ends, huge numbers of businesses will survey the scene and find that, despite government assistance, they have accumulated hopelessly unpayable debts”.

Be interesting to see if anyone does indeed challenge a government or bank for their activities!

Bought to you by Digital Bytes if you would like to receive Digital Bytes weekly please use this link to register  http://eepurl.com/gTDiwP

More about Irish Tech News and Business Showcase here

FYI the ROI for you is => Irish Tech News now gets over 1.5 million monthly views, and up to 900k monthly unique visitors, from over 160 countries. We have over 860,000 relevant followers on Twitter on our various accounts & were recently described as Ireland’s leading online tech news site and Ireland’s answer to TechCrunch, so we can offer you a good audience!

Since introducing desktop notifications a short time ago, which notify readers directly in their browser of new articles being published, over 30,000 people have now signed up to receive them ensuring they are instantly kept up to date on all our latest content. Desktop notifications offer a unique method of serving content directly to verified readers and bypass the issue of content getting lost in people’s crowded news feeds.

Drop us a line if you want to be featured, guest post, suggest a possible interview, or just let us know what you would like to see more of in our future articles. We’re always open to new and interesting suggestions for informative and different articles.

Contact us, by email, twitter or whatever social media works for you and hopefully we can share your story too and reach our global audience.

Irish Tech News live new content every day.

If you would like to have your company featured in the Irish Tech News Business Showcase, get in contact with us at Simon@IrishTechNews.ie or on Twitter: @SimonCocking