"Not suddenly, but over time, gradually higher rates of inflation should be the result of QE...

"Not suddenly, but over time, gradually higher rates of inflation should be the result of QE policies and (endless ZIRP)," writes Bill Gross, the bond man turning goldbug (?) as he urges a higher allocation to real assets as a way to combat this. Gross also recommends shortish-duration fixed income as well as stocks offering 3-4% yields.
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Comments (3)
  • krycap
    , contributor
    Comment (1) | Send Message
    He does not realize that the Fed can devise any strategy they deem adequate to reverse liquidity and as long as M1 & M2 stay completely non-correlated we will never have $$$ floating in the market to create inflation.


    The Fed will reduce balance sheet by making banks buy back Treasuries from reserves on deposit with FED
    1 May 2012, 12:23 PM Reply Like
  • Covingtonium
    , contributor
    Comments (493) | Send Message
    So, Bill Gross, the multibillionaire bond trader, doesn't understand this? lol
    1 May 2012, 12:53 PM Reply Like
  • gh1616
    , contributor
    Comments (864) | Send Message
    Well said Covingtonium! By far the majority on this site understand the basics of how the Federal Reserve works. As for the strategies they have employed & might employ, & it isn't open-ended, & it works until it doesn't work!! The question I have heard both Gross, Mohamed El-erian, & others pose.....What is the exit strategy? It isn't as simple as having member banks buy back Treasuries, not at the level being played!
    1 May 2012, 09:50 PM Reply Like
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