Who are the Prominent Economists Working in the Financial Sector that Advocate a Different Type of QE?

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Did you know that there are a number of prominent economists working in the financial sector that are in favour of a different type of QE? Is it surprising that they are in favour of central banks creating new money for the real economy rather than the financial markets?

In a recent post Positive Money showed that there is a strong intellectual body of history behind the various alternative proposals for QE. Both John Maynard Keynes and Milton Friedman proposed a style of Quantitative Easing (QE) that was aimed at the real economy. Today, these types of proposals are commonly referred to as “People’s QE”, “Sovereign Money Creation”, and “Helicopter Money” amongst others.

In effect, both Friedman and Keynes advocated a different form of QE than that which we are experiencing today: one that would be relayed away from the banking sector and speculators and towards consumers, non-financial businesses and low income earners – and one that could directly back investment projects, rather than create risky asset price bubbles.

At Positive Money we have been trying to keep track of Keynes’s and Friedman’s contemporaries and share them with the public. Accordingly, we will be releasing a series of posts that illustrate the various influential people who advocate a different type of QE. Each post will address a separate category of influencers. In our previous post, we highlighted some of the quotes made by prominent Policy Makers and Public Advisors in favour of a different type of QE. Today’s post will reference quotes made by a number of people working in the financial sector. Subsequent posts will highlight quotes made by: Academics, Politicians, Journalists and Media Commentators, Activists and Special Advisors.


Prominent Economists Working in the Financial Sector

Paul McCulley and Zoltan Pozsar, Chair, GIC Global Society of Fellows and Director at Credit Suisse in the Global Strategy and Research department

“In the cooperation framework the central bank overtly subjects itself to become a partner of the fiscal authority in stimulating economic growth directly as a borrower and spender of last resort for as long as necessary in order to reduce economic slack and thereby root out deflationary dynamics – a target reaffirmed by strategy. In the inflation targeting framework the central bank first generates expectations of negative real interest rates (via commitments to low rates for long, purchases of long-term bonds, or prioritizing employment over inflation) in hopes of the private sector then becoming a willing partner to borrow and dis-save in response to this stimulus – a target that’s in and of itself the strategy… In this paper we argue that simple inflation targets without being reinforced via fiscal-monetary cooperation will fail.”



Eric Lonergan, Fund Manager and Author of ‘Money: The Art of Living’

“Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly. In practice, this policy could take the form of giving central banks the ability to hand their countries’ tax-paying households a certain amount of money. The government could distribute cash equally to all households or, even better, aim for the bottom 80 percent of households in terms of income. Targeting those who earn the least would have two primary benefits. For one thing, lower-income households are more prone to consume, so they would provide a greater boost to spending. For another, the policy would offset rising income inequality.”



Tuenis Brosens, Senior Economist ING

“Perhaps it’s time the ECB considers a radical new stimulus: helicopter money. As the name suggests, helicopter money is when money drops seemingly from the sky directly into people’s bank accounts. It immediately boosts purchasing power. It is probably a far more effective way to boost spending than measures already undertaken, such as purchasing assets.”



Steve Englander, Global Head of G10 currency strategy Citi Group

Our ‘innovation’ here is to suggest that central banks will invite fiscal spending by announcing that their balance sheets will stay expanded permanently, or almost equivalently, be reduced only under extreme circumstances, and that they anticipate additional permanent expansion if targets are missed…The argument for fiscal policy via central bank monetization is that it directly injects purchasing power into the economy and will increase activity or inflation or both. QE increases the balance sheet but there is no guarantee that the increased lending and spending will result”



George Magnus, Senior Economic Adviser to UBS Investment Bank

“Ultimately, the Bank could get involved in direct lending to SMEs and to the government, so that the latter could fund infrastructure and other programmes to boost employment. Extra­ordinary times call for comparable economic thinking. We are a long way from having to worry about inflation and, as things stand, the status quo on policy is leading us into a depression that will sink your medium-term fiscal and economic strategy, to say nothing of the disastrous social consequences.”



George Cooper, Co-Founder and Director of Equitile Ltd, Author of ‘Money, Blood, and Revolution’

“Corbyn’s PQE could be the correct policy for the risks facing our economy in future years. But we should view all monetary policy like medicine. Used to excess PQE will turn toxic and could do more damage than the original disease. Finding the correct dose of PQE will require considerable skill. Avoiding becoming addicted to PQE will require even more self-discipline.”



Paul Marshall, Chairman Marshall Wallace

“Some object that creating money to spend on infrastructure would undermine the central bank’s independence by forcing it to buy direct from the Treasury. Yet monetary policy has already extended well beyond its technocratic bounds into the realms of wealth distribution. QE had clear wealth effects, which could have been offset by fiscal measures. All political parties should acknowledge this. So should those of us who want free markets to retain their legitimacy.”



Jeremy Lawson, Chief Economist Standard Life Economics

“Under certain circumstances, some central banks could formally agree to purchase government debt issued to finance looser fiscal policy without ever selling that debt back into the market; or deliver money financed helicopter drops directly into household bank accounts. If so much policy space exists, why then is there considerable scepticism about what policymakers can do? Much of it boils down to politics. There is a big difference between what can be done and what will be done, especially when there is likely to be even more opposition to these policies than those pursued since the financial crisis.”



Matt King, Credit Strategist at Citi Group

“Germans make the point that QE just puts off necessary reforms. I’m very sympathetic to that view,” says Mr King at Citigroup. “We’re in a period when investment should be high. People should be saying: ‘I can do something useful with all the cheap money and put it into the real economy.’ But the investment we’re seeing is very disappointing. In the energy sector it is actually being cut.”



Paul Serfaty, Director of Asian Capital Partners, Hong Kong

“There is nothing ‘Keynesian’ about using central bank money to buy financial assets as a putative substitute for shortfalls in aggregate demand. Indeed, the failure of this policy to bring about significant multiplier effects, and the pooling of cash in banking and corporate coffers, shows how poor a substitute it is for what Keynes himself recommended: that government should spend directly on capital works, putting cash in the pockets of the employee-consumer, thus driving demand.”



Sam Alderson, CEBR Consultants

“There are issues one would have to iron out if one were to try to execute such a plan, for example the independence of monetary policy is in question if you are to execute People’s QE… But in terms of the economics, it should boost aggregate demand, and in that sense it should help to engender some sort of recovery.”




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Frank Van Lerven

Frank is our Research and Policy Analyst, and is responsible for our research on current events. Frank also leads our research in Public Money Creation and Quantitative Easing. Prior to working on the availability of credit under a Sovereign Money system, Frank also researched issues related to the 1844 Bank Charter Act and its implications for contemporary monetary policy. With a Research Master’s in Advanced Political Economy (cum laude) and a BA in African Development Studies, Frank is especially interested in how Western financial systems (and models) influence developing economies.
  • jamesmurraylaw

    Frank, a wonderful array of influential, practical and academic economists.
    Well done.
    This blog page should be on a permanent page on the website, and easily accessible.

  • jothwu

    PQE could be administered through a decrease in income tax rates to those in the lowest tax brackets. This is where that money gets spent.

    • RJ


      We can’t do that. It’s much too simple and straight forward. Much better to talk (and write numerous books and articles) about it for 10 years and came up with complex time wasting ways of doing it instead. Like helicopter money.

      And this is in no way a reflection on Franks excellent series of articles. Its just the way the world is.

    • Marco Saba

      No, the people who don’t earn any income will be cut off.

  • http://www.ukcolumn.org Justin Walker

    Unfortunately, all these economists are employed by, and operate within the current financial criminal System. Please read what is coming. It is all based on truth, decency and historical precedent!

    To all supporters of Positive Money, please be aware that 2016 will see the beginning of a major new push in Great Britain to bring back and restore a sovereign monetary system that is based entirely on the provable truth, historical precedent and simple common sense. This push will completely transform the current debate about money creation and money supply in quite an extraordinary and remarkable way. And it will also spell the end of the global financial and monetary system as we know it, not to mention the debt-creating power and control presently enjoyed by the City of London and their corporate and financial backers….the so-called ‘one-per-cent’!

    Once this sovereign monetary system has been restored, the problems of austerity, the deficit and the national debt will disappear forever leaving the British people prosperous and free from the clutches of the criminal debt-creating bankers and financiers. How? How can all this be achieved? Answer, by simply waking people up to the real and completely provable truth about money creation, the appalling machinations of the central banking system and the historical and extremely successful precedent that was initiated at the outbreak of the First World War.

    Unfortunately, the leading proponents of Positive Money, for whatever reason, have chosen to both completely ignore the organisational set-up and over-riding influence of the central banking system and the ridiculously simple historical precedent which, if brought back today, would transform everyone’s lives for the good. I find this, I have to say, both very sad and very frustrating!

    Now, if you haven’t already done so, please have a good look at Positive Money’s official and extensive website. Do you see any mention of the Bank for International Settlements (BIS)? I’ve looked long and hard and can’t find anything of any meaningful substance. I am completely baffled by this!

    So what is this Bank for International Settlements, I hear you ask? Well, it’s a secretive, very little known and unaccountable privately controlled (by the well established banking dynasties) central bank which enjoys diplomatic immunity and which controls sixty of the world’s central banks (including the Bank of England, the Federal Reserve and the European Central Bank) and which oversees 95% of the world’s GDP and money supply! Not bad for an organisation that hardly anyone in the street has ever heard of – and that includes, I am afraid to say, some, if not many of our elected representatives in the Palace of Westminster!

    Currently, Positive Money advocates the setting up of some sort of central Monetary Policy Committee (that strangely won’t include any of our democratically elected and accountable representatives in Parliament) which will decide on how much money the Bank of England (not HM Treasury) creates for the British economy. That’s right, the British central bank that provably takes its orders directly from the major banking families through the privately controlled Bank for International Settlements, will, if Positive Money succeeds with its campaigning and lobbying, create our money!

    If you don’t believe that I am correct about the Bank for International Settlements, please see what the late and much respected historian Professor Carroll Quigley, mentor to President Bill Clinton and a former trusted ‘insider’ friend to the financial elite, had to say about this shadowy organisation in his 1964 book ‘Tragedy and Hope’:

    “The powers of financial capitalism had another far reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements, arrived at in frequent private meetings and conferences. The apex of the system was the Bank for International Settlements in Basle, Switzerland; a private bank owned and controlled by the world’s central banks which were themselves private corporations. The growth of financial capitalism made possible a centralization of world economic control and use of this power for the direct benefit of financiers and the indirect injury of all other economic groups.”

    But if you are now thinking that the Governor of the Bank of England, Mark Carney, is all powerful when he attends these secretive meetings at the BIS, think again! Professor Carroll Quigley goes on to say:

    “It must not be felt that these heads of the world’s chief central banks were themselves substantive powers in world finance. They were not. Rather, they were the technicians and agents of the dominant investment bankers of their own countries, who had raised them up and were perfectly capable of throwing them down. The substantive financial powers of the world were in the hands of these investment bankers (also called ‘international’ or ‘merchants’ bankers) who renamed largely behind the scenes in their own unincorporated banks. These formed a system of international cooperation and national dominance which was more private, more powerful, and more secret than that of their agents in the central banks…”

    When you hear such compelling evidence as this, it’s not hard to see what’s really going on – that the central banking system is privately controlled and is all powerful when it comes to the creation and control of nearly all of the world’s money supply as debt. So, it must be asked, why do the good people at Positive Money, who have done such an excellent job of exposing how the private bankers create money completely out of thin air as debt, seemingly decline to research and highlight the power and the strength of the BIS (which sees itself as the central bank for all the central banks), not to mention the dynastic banking families who, ultimately, control this secretive and unaccountable organisation as well as the whole central banking system?

    And now we come to that historical precedent which the leadership of Positive Money has also failed to research, even though they have been alerted to it on numerous occasions.

    In August 1914, at the outbreak of World War One, the Bank of England and the private bankers feared an immediate run on the banks as the uncertainty of war persuaded people to withdraw their gold. The solution was incredibly simple and effective! In a matter of four days, Parliament passed an Act authorising HM Treasury to print debt-free and interest-free paper money which was based entirely on Britain’s wealth and potential. Called Bradbury Pounds (as the signature on them was that of Sir John Bradbury, First Secretary to the Treasury) they were immediately accepted by the British people and so avoided emptying the gold vaults just as Britain was mobilising for war. The full story can be found here: https://www.ukcolumn.org/sites….

    As with President Lincoln’s debt-free and interest-free US Treasury Greenback Dollars and the Colonial Scrip of the American Colonies, the Bradbury Pound worked brilliantly and there was no talk at all of inflation. So we really must ask why does Positive Money not look at this simple and effective precedent of HM Treasury (not the Bank of England) issuing sovereign debt-free and interest-free money that is based entirely on our nation’s wealth and potential in order to provide the liquidity needed to create a prosperous and successful economy whilst meeting the needs of the NHS and our other essential services?

    If you are a supporter of Positive Money, please do something to ensure that this campaigning organisation, that has done so much to raise the profile of how money is created, now goes where the provable truth and actual historical precedents are. This free e-book will help you with your further research http://www.thebcgroup.co.uk/Wh

    For those of us who do know what is going on (and we have some senior ‘insider’ contacts within the City of London who keep us informed), we really hope that the decent people who make up Positive Money will now go where the completely provable truth is and do the following:

    1. Highlight and condemn the criminal central banking system, especially the secrecy and deception being practised by the Bank for International Settlements.

    2. Call for an immediate and formal end to the relationship between the Bank of England and the Bank for International Settlements.

    3. Campaign for the immediate restoration of the Treasury-issued Bradbury Pound in order to provide the debt-free and interest-free liquidity needed for the essential services, strategic industries, vital infrastructure and overall well-being of the British people.

    On the 18th November 2013 Jeremy Corbyn and John McDonnell both signed Early Day Motion 748 which called for the restoration of the Bradbury Pound in its centenary year http://www.parliament.uk/edm/2… and a meeting with John McDonnell is being planned for some time early in 2016. The tide is definitely turning and people are starting to wake up to the truth about money creation and money supply.

    Finally, thank you all for taking the trouble to read this. Regrettably, a huge and planned international financial collapse would appear now to be very likely at some point in 2016, especially as the ridiculous and contrived derivatives debt bubble now amounts to well over 550 trillion US dollars (some commentators say that it has now reached more than one quadrillion dollars!). It would be fantastic if Positive Money could now, with a sense of urgency, join us in our new grassroots campaign network to bring back and restore the Treasury-issued debt-free Bradbury Pound. Surely it is now the time for all of us to come together with the provable truth – the truth that will bring down the central banking system and stop humanity from being debt slaves to the criminal and controlling elite within the City of London and the Bank for International Settlements. Time is not on our side so please take action quickly to get things moving!

    Justin Walker – Bring Back the Bradbury Pound Campaign Coordinator.
    British Constitution Group and the UK Column

    • RJ

      Look I don’t agree with taking control from the Govt and giving control to an appointed committee (as PM propose). It will create a Euro type situation that will likely make the situation much worse. It will give the people even less power than we have at present.

      But the Govt controls the central bank at present. And this control is key as Euro countries are finding out. The issue is who controls the Govt. In theory the people … And we do. But due to misinformation and ignorance the 99% have lost control to the super rich. That is the issue today. And ignorance and misinformation about Govt debt is underpinning this. And that’s the key and only key. We need to educate people and in this respect PM is doing a good job.

      PMs solutions or the Bradbury pound will make the situation much worse without an informed education public as any change will be used to benefit the 1%’s. As they will control the change process.

      • http://www.ukcolumn.org Justin Walker

        I’m sorry RJ but our government does not ultimately control the Bank of England, the Bank for International Settlements does, or more accurately the banking dynasties that controls the BIS. You can’t ignore the warnings from the late Professor Carroll Quigley. Please read my e-book to get more information about this .http://www.thebcgroup.co.uk/What_Exactly_is_Austerity_V1.0.pdf

        • RJ

          We will have to agree to disagree on this point. And some people deliberately plant misinformation. To lead the public down a blind alley. Even those supposed on our side.

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