Total Credit Market Debt As A% GDP:
Off-the-balance sheet and market-to-model debt understates the severity of this trend. Moreover, a convenient on/off switch for QE(n), despite the suggestion of one, does not exist. The consequences of curtailing QE(n) are beginning to manifest themselves in the headlines of unrest across the globe.
Headline: Federal Reserve official: 'we've done a bit too much' QE
Richard Fisher, who heads the Dallas branch of the Fed, said that the world's biggest economy is no longer in need of further stimulus and the real question is when to begin tightening monetary policy. To embark on a third round of quantitative easing (QE) would "only prolong the injustice inflicted" on savers through inflation, Mr Fisher said.
The Fed started a second, $600bn (367bn pounds) round of QE in November in an effort to ward off the threat of deflation and ignite a recovery that has made little dent in unemployment. The move sparked criticism outside the US that it would fuel inflation, while domestic opponents argued it threatened to debase the dollar.
Source: telegraph.co.uk
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