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Posts Tagged ‘costs and ebnefits of quantitative easing’

Bill Gross: Who Will Ultimately Finance Uncle Sam and at What Rate?

Posted by Larry Doyle on March 3rd, 2011 6:47 AM |

If Ben Bernanke had never stepped into the markets via the Fed’s quantitative easing program, where would our level of interest rates currently be? What about equities, commodities, and our greenback? I think the following are easy assumptions to make:

1. Interest rates would be higher.
2. Credit spreads would be wider.
3. Equity markets would be lower.
4. Commodity prices would be lower.
5. The greenback theoretically would be higher, but I am less confident of this.

What will happen to our markets and our economy when Ben Bernanke ultimately does pull the punch bowl–that is quantitative easing–away from those utilizing the easy money provided by the Fed to prop our markets and our economy? (more…)






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