Fixing It #6 – QE to Shareholders

  By Richard from Canada | August 25, 2012 - 17:03 | ,

 

The Canadian Central Bankster appears to like the concept of QE to Shareholders, especially if companies do not plan on spending their hoards of cash.

Bank of Canada governor Mark Carney says companies sitting on piles of cash need to give it back to shareholders or spend it on expanding their businesses.   He says holding on to cash only amounts to “dead money.”   Carney told a Canadian Auto Workers union gathering that companies should give cash back to their shareholders if they can’t come up with a better plan.

http://www.cbc.ca/news/business/story/2012/08/23/business-carney-cash.html

Could this be considered some form of QE to the people ?!

 

 

Written by: Richard from Canada on August 25, 2012.
Tagged , . Bookmark the permalink.
  • axionication1

    A’ better plan’ may see vast sums spent on automation ( to regain competitive edge).
    No firm is going to spend capex when it will not receive return on the spend. Export thoughts…
    If the shareholders receive the money ( because the firms will not expand) they would want it invested in something that provides return. Export da money…
    Not sure the government will get what it wants out of it ( besides having done somethin…)

    Some how I read the words ‘dead money’ as ‘deal money’… some form of Freudian mishmash in my mind.

    • CSArichardo

      A private company that is happy making 10% profit will someday get sold to a hedge fund who will sell it to a bigger company who will close the local operation.  That company is only happy with 15% profit (US based manufacture) or maybe 30% profit (Asia based manufacture).  I agree that this is deal money.  In a way it is also dead money for your local community where that factory used to be, because they are not going to invest there if they are foreign owned either US or Chinese !!??

      I think Germany has one of the largest percentages of private small businesses supporting the manufacturing etc.???? I think this tells you alot about their economy !?

  • http://overthepeak.com/wordpress/ Mystic

    No ….. Giving the `excess` to the workers would be closer to `QE for the people`.

    • CSArichardo

      Good point ….. but they would argue it cannot be a wage increase because that would reduce compeditiveness. So a bonus instead to all !!

  • joebhed

    This is really quite excellent for a CB head. It implies there is something more “serious” (my Dad used to say a ‘higher priority’) about the “means of exchange” function of money in the national economy, superior to its function as a store of wealth.
    If the aristocrats use it to store their wealth, there is no means(media) for exchange to foment demand.

    Great comments on the article – noting the humongous tax breaks the PCs gave to the corporate industrialists in the hope of productive investment – with the CB asking where the investment in jobs has gone..

    But it is truly significant because it draws a discussion around the monetary system as a foundation of the national economy. That is a pretty far out discussion for any CB to be having.