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Quantitative Easing: To Infinity and Beyond?

Posted by Larry Doyle on January 29, 2012 12:02 PM |

What does the Federal Reserve know that we don’t?

I mean, why would the Federal Reserve commit to keeping prevailing interest rates at next to zero through the end of 2014 if they were not aware of just how weak our underlying economy truly is?

Bernanke and team know our domestic economy and the global economy at large remain in need of significant and steady oxygen support.

Over and above committing to this interest rate policy, one does not have to read the tea leaves too hard to see that Chairman Bernanke is poised to unleash another round —if not many rounds—of quantitative easing. How much QE should we expect?

If we were to listen to Pimco’s Bill Gross, we should start to think of additional QE in terms of “to infinity and beyond.” Really? As Bloomberg wrote the other day, Pimco’s Gross Predicts ‘Repression’ with Addiitonal Easing:

The U.S. will suffer “financial repression” as the Federal Reserve implements additional quantitative easing, according to Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co.

A third, fourth and fifth round of easing “lie ahead,” Gross wrote in a Twitter post.

Bernanke’s commitment to low rates through 2014 and Gross’ sentiment regarding QE both beg the question, “WHY?”

Given the size and scope of these expected measures, what is an investor to do? That is a great question. Let’s listen to a recent Bloomberg interview which offers disparate yet compelling insights and perspectives regarding inflation vs deflation, our “debth” spiral, our economy, and our markets.


Navigate accordingly!!

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets, our economy, and our political realm so that meaningful investor confidence and investor protection can be achieved.

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