[DannyTN]

You don't buy that easier money lowers the cost of making new investments and consequently spurs job growth?

Pimco's Gross believes it. I believe it. The Federal Reserve believes it.

High unemployment is worse than inflation. And the Fed can sell the treasuries they bought (so called printing money) on the market to soak up excess money supply, just as easily as they bought them, if inflation becomes to severe.

The inflation that we are seeing now and will see in the next few months is not so much from QE2 but from the oil price shock that is a result of our government's "do nothing" energy policy that we have had for the last 30 years.

[taildragger]

Your two post make a great deal of sense. I talked to an Uber Liberal today that noted they wrote Boehner to be a statesman and not Shutdown. His reason well we have to keep the Illusion that everything is ok going....

Agghhh !!!!! We know and Bill Gross does that this is all unsubstainable via the accounting equation. We are reaching a tipping point, and as much as this is for Bill not to get wip sawed owning old paper, is he potentially trying to "nudge" Fedzilla into the hard choice they have to make?

[Qbert]

“You don’t buy that easier money lowers the cost of making new investments and consequently spurs job growth?
Pimco’s Gross believes it. I believe it. The Federal Reserve believes it.”

The Weimar Republic and Zimbabwe also believed it...

[jjsheridan5]

You don't buy that easier money lowers the cost of making new investments and consequently spurs job growth? Pimco's Gross believes it. I believe it. The Federal Reserve believes it. High unemployment is worse than inflation. And the Fed can sell the treasuries they bought (so called printing money) on the market to soak up excess money supply, just as easily as they bought them, if inflation becomes to severe. The inflation that we are seeing now and will see in the next few months is not so much from QE2 but from the oil price shock that is a result of our government's "do nothing" energy policy that we have had for the last 30 years.

I would not take what Gross says at face value, ever. He is the big fish in a big pond, and it serves him well to be somewhat deceptive. As far as the Fed goes ... there is probably little to no correlation between what they believe and what they say, to say the least.

More importantly, I seriously doubt that the Fed can sell off Treasuries "as easily" as they bought them. They have created an artificial market. If they start selling, then that artificial market is removed. Given our debt level, if the Fed starts selling, it will start a cascade of selling, with few buyers.

And easier money doesn't always result in job growth. Ask Japan. In a healthy economy, it does create growth. But in a non-healthy economy, it does just the opposite.