Bill Gross of Pimco defended his comments from earlier today about quantitative easing and the Fed on CNBC. He’s actually in support of more QE, because he thinks the economy does need an “some adrenaline straight to the heart.”
It’s a bit confusing really, how Gross can on one hand call the U.S. government a Ponzi scheme and then encourage it to continue activities he considers Ponzi in nature.
But, back in short-termism mode, Gross is all for more QE, but has no idea if it will work.
- 0:15 We should have a choice other than Democrats and Republicans. We always end up with some sweeteners and a weak result.
- 1:15 When you have treasuries at their current lows, there is little space to go down in terms of yields. What we’re left with is low or negative real yields. The bull market in bonds has been played out.
- 2:30 We think Bernanke needs to do something, some adrenaline straight to the heart. QE 2, asset price pumping, could stimulate spending through the wealth effect.
- 3:40 There are consequences to QE. It does debase the dollar and does increase inflation. These are intentional, to create growth and make the American worker more competitive.
- 4:45 We’re in for a long slog. Unemployment will remain high and go down slowly. It is a good five years until we return to normal, until de-leveraging takes place.
- 6:40 Requesting information on mortgage put-back crisis.
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