Posted on 03/01/2011 12:28:29 PM PST by FromLori
Extending the Federal Reserve's easy-money policies would be a mistake for an economy that badly needs to learn how to live without artificial stimulus, Pimco's Mohamed El-Erian told CNBC.
As Fed Chairman Ben Bernanke delivers his semi-annual policy update to Congress, El-Erian said the central bank ought to be weighing how it will exit the second leg of its multi-trillion dollar quantitative easing program, often called QE2.
El-Erian used an automotive analogy to demonstrate what he thinks should be Bernanke's position.
"Think of your car having stalled and someone comes along with jumper cables and starts it. At some point, you have to take the cables off and see whether the car will drive," he said. "The reality is if we go to QE3 we're going to find very quickly that the costs and risks of these unconventional policies are going to offset what the benefits are."
(Excerpt) Read more at finance.yahoo.com ...
bttt
Yes.
The Fed is monetizing our debt in other words we own more of our own debt then private buyers. You can read what Fed’s Fisher has to say about that and note it is called an inflation tax by Wikipedia.
http://www.dallasfed.org/news/speeches/fisher/2011/fs110112.cfm
http://en.wikipedia.org/wiki/Monetization
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