Every time I saw the Fed pump money into the economy, it was a documented and needed boost.
FORBES: An Unemployment Report That Screams Spectacular Failure
Rising expectations that the Fed will pump more money into the financial system through additional purchases of long-term bonds, such as mortgage-backed securities, helped fuel a 1.1% increase in gold prices Wednesday.
The Fed has tried to pump money into the banking system to break the log jam, first by opening up its discount window to deposit banks and then by inventing a new term auction program for them.
The Fed's efforts to pump trillions of dollars into the financial markets are helping lift prices of stocks and keep a cap on bond yields.
WSJ: As Many Stocks and Bonds Get Pricey, It's Time to Play Defense
More than any other time in history, this bull market owes its strength to the Fed's unblinking determination to pump money into financial markets until the economic recovery becomes self-sustaining.
The Fed has committed to bond purchases that will pump an additional two trillion dollars into the economy to finance this growing budget gap.
FORBES: On Its 83rd Anniversary, Lessons From The Great Depression
Another round of asset purchases by the Fed will only create more risk taking and pump up asset bubbles, without helping the economy or producing jobs, while making the eventual removal of stimulus that much more difficult.
The Fed will thus feel less pressure to lower rates and pump in more liquidity.
Giustra, whose gold positions increase in value every time Fed Chairman Ben Bernanke institutes quantitative easing, does not think this option will be successful in pump priming the US economy.
Sustained higher prices at the pump will act as a drag on GDP by obstructing consumption, yet inflation remains at comfortable levels for the Fed, which is expected to continue with its ultra-accommodative monetary stance.
FORBES: Rising Gas Prices Fuel Inflation As Headline CPI Hits Highest Level In More Than Three Years
应用推荐