American billionaire ray Dalio, considered the most successful managers of hedge funds in the world, announced the approach of a new era of radical monetary policy, which will probably be “helicopter money”, writes the Financial Times. The investor claims that Central banks are unable to achieve an economic recovery, using the current methods.
In a note to its clients Dalio said that such measures as the reduction of the key rate, quantitative easing and negative interest rates has been exhausted. “Although quantitative easing will slightly increase the cost of assets, investors will still tend to accumulate, lenders still remain cautious, and prudent borrowers will still remain the same, so we will continue to try to “push nevpihuemoe (originally pushing on a string — ed.)”, — he wrote, referring to the situation when monetary policy does not lead to growth in consumer spending and investment.
According to Dalio, in the end Central banks will have to move to the third stage of the monetary policy after the rate cuts, and quantitative easing, which would be in direct stimulus spending. The investor said that in this phase the banks will directly Finance government spending using electronic money and to send money directly to households, which economist Milton Friedman called “the distribution of money from a helicopter”.
Dalio noted that the above scenario is not a matter of the near future, but only his thoughts about the actions of Central banks. FT says that the idea of “helicopter money” periodic debated by economists, but is rejected by politicians. In this case, adds the edition among investors and economists there is a growing conviction that with the limited ability of Central banks to boost economic growth should pay more attention to fiscal policy.
The phrase “helicopter money” attributed to Nobel laureate in Economics, founder of the theory of monetarism and a prominent representative of the Chicago school of Milton Friedman, who in his work of 1969, “the Optimum quantity of money” cited a hypothetical example of demand stimulation through the spreading of banknotes from a helicopter.
The idea behind the SCM is that the easiest way to increase inflation to target and stimulate economic activity of direct transfers to households, are noticing an increase in the quantity of money in circulation will begin to spend more freely.
Ray Dalio occupies 29-e a place in Forbes rating of billionaires with $15.6 billion In 2015, Bloomberg has included him among the most influential people in the world, placing it in 18th place. The Financial Times recognized him as the most successful Manager of a hedge Fund. Bridgewater is the largest hedge Fund in the world and manages assets na $169 billion.