Helicopter
money in developed countries can have an impact upon flats
in Noida in positive ways. One of the top global investors has remarked
that developed economies may soon resort to such extreme measures to try and
increase demand for goods in developed countries. Helicopter money is credited
directly to consumer’s bank accounts
increasing their purchasing power and spurring demand goods within an economy.
While interest rates are already low or even negative in certain economies, by
injecting money directly into the bank accounts of households, shoppers are
expected to increase purchasing goods leading to increased economic activity
and greater sales for companies. Low-interest
rates combined with helicopter money increases the liquidity in a market; however, helicopter money’s impact can be
maneuvered far better than the QE policies currently being pursued by central
bankers. While central banks across the globe are engaged in quantitative
easing (QE), which is essentially money printing, the impact of helicopter
money can be controlled with surgical precision. Quantitative easing results in
the purchase of assets which prevent the value of such assets from dropping in
value while at the same time injecting the value of such assets into the
economy in the form of capital. Thus the capital used to buy troubled assets
flows into financial instruments such as stocks raising their price; hence the
stock market in the US is at new highs. However while QE leads money to flow
into capital markets, Helicopter Money leads money directly into the hands of
consumers and wherever else suitable in order to spur economic activity.
Direct
capital injections can be targeted to be as precisely as laser beams and may
lead to the construction of new infrastructure projects in developed economies
if required. Such investments always bode well for economic activity.
Furthermore, as interest rates remain low in foreign countries and foreign
consumers may have more money in their bank accounts due to helicopter money,
foreign investors are incentivized to seek markets which have higher interest
rates and thus money from overseas shall likely flow into the coffers of builders
in Noida from overseas household’s keen to invest in new
projects in Noida. As pumping additional money into the hands of consumers
(Helicopter Money) and low-interest rates
mean lower capital returns for foreign investors, capital outflows to markets
such as India where returns are higher is inevitable. Much of this money would
flow into residential property in Noida and into residential property across
India. In particular, luxury apartments in Noida may witness greater demand
particularly from overseas investors and NRI’s as the value of luxury
apartments is prone to sharper price increases than is the value of affordable
housing in Noida.
Direct
capital injections into an economy (helicopter money) if it is pursued shall
signal the failure of monetary policy (QE) to bring about robust economic
growth. Helicopter money had been advocated by Paul Krugman a Nobel Peace Prize
laureate a few years ago. When such a
policy is pursued it will mean that developed economies across the globe shall begin
fiscal stimulus; essentially spending on large infrastructure projects.
Consumers too shall receive a direct injection of capital into their bank
accounts. Governments hope that helicopter money shall incentivize consumers to
shop more thereby increasing economic activity in a country. Much of the excess
capital from the combination of low-interest
rates and greater liquidity from helicopter money shall flow into emerging
economies driving up prices not only of stocks but also of property
in Noida and in other large real estate markets in India.
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