Lead Capital Partners: Japan’s central bank, the Bank of Japan is contemplating the use of so-called “Helicopter Money” as the latest tool with which to arrest the country’s slow growth and low inflation problems.
The term refers to a passage in renowned economist, Milton Friedman’s essay entitled ‘The Optimum Quantity of Money’ in which he postulates a theory where a helicopter could drop money on people in order to fend off deflation.
David Eckhart, Chief Market Strategist at Lead Capital Partners said, “The Bank of Japan has already tried quantitative easing and that’s met with limited success in terms of increasing inflation and boosting the economy. Helicopter money would effectively see the BoJ print money to fund government fiscal stimulus in the form of things like public works. Basically they would print money and give it to the government to spend on whatever it likes.”
BoJ chief Haruhiko Kuroda met with ex-Federal Reserve Chairman Ben S. Bernanke early last week but, while the details of the meeting were not made public, markets speculated that the meeting was aimed at working out how best the policy might be deployed. Later, however, a top government spokesperson moved to dampen conjecture by stating that helicopter money would not be introduced.
Lead Capital Partners is skeptical pointing out that Mr. Kuroda is known for his penchant for surprising markets.
“Remember, he specifically told Japan’s parliament that he would not introduce negative interest rates and then, a few days later, did exactly that,” said Eckhart.

About Lead Capital Partners:
Lead Capital Partners is an independent investment management practice founded on the philosophy that an active, opportunistic and adaptable approach to investing provides our clients with the best chance for the realization of long-term positive returns irrespective of prevailing market environments.
It is our firm belief that the “buy and hold” investment strategy that has traditionally served investors to such great effect over the decades can, now, lead to significant losses in bear markets, or to little or no profit in markets that persist in trading in ranges unless they are actively managed by seasoned professionals such as those at Lead Capital Partners.