Helicopter Money and Gold
Helicopter money would be probably positive for the gold market. Although the yellow metal is not always a perfect inflation hedge, the introduction of helicopter drops should raise the fear of inflation overshooting (and the loss of central banks’ independence from the government) and spur safe-haven bids for gold, at least initially. The reason is that the idea of helicopter money is to give money directly to consumers (or via the government as an intermediary). Therefore, helicopter drops could lead to serious inflationary consequences, as newly created funds would ended up in the households (and not in the financial sector or the commercial banks’ vaults like with quantitative easing) which would probably largely spend them on consumer goods.
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