The U.S. Federal Reserve has leased 736 helicopters in the past two weeks, an investigation by The Daily Currant has revealed.
According to sources the fleet is intended to be used in the Fed's new Aerial Liquidity Dispersal Operations (ALDO), an unconventional monetary easing program designed personally by Federal Reserve Chairman Ben Bernanke.
ALDO distributions are expected to begin in the coming weeks in major cities including New York, Boston, Los Angeles, Eugene, Ore., and San Francisco. So far the Fed has been tight-lipped about what to expect, but a well-placed official says it's exactly what it sounds like.
"We're gonna be dropping money from the sky," he explains. "Hopefully, people pick up the bills and spend them, thus stimulating the economy. It might be a long shot, but we're getting kinda desperate here."
The Federal Reserve is responsible for the monetary policy of the United States. Since the onset of the global financial crisis it has moved aggressively to loosen policy through both conventional and unconventional easing in hopes of stimulating growth.
The recovery thus far, however, has been one of the weakest on record as U.S. output has stagnated and unemployment remains well above historical norms.
Today's news that the unemployment rate has ticked up to 7.6 percent may be the impetus the Fed needs to began a new round of innovative helicopter-based stimulus.
"He said he was going to do it, so I don't know why we're surprised," says Guy Royal, a fixed income analyst at BNP Paribas in New York. "Our models have always assumed that helicopter drops were going to be a major component of the Fed's strategy.
"I don't see anything to worry about. Hopefully the extra cash will work its way back into the economy."
Other analysts, however, are less sanguine and worry that directly sending cash through the air could lead to consumer price inflation.
"I can't f**king beleive this," says Peter Schiff, founder of Euro Pacific Capital. "The CPI is going to go through the roof. Even Zimbabwe didn't try to pull this. Can you imagine the scene in Times Square as the Fed's helicopters dropped $10,000-packets of cash. It will be chaos."
According to a copy of the contract with Harare Leasing Company, the helicopters will remain in the Fed's possession for "an extended period" or until unemployment drops below 6 percent.