The 7 Reasons Why People Hate QE

May 24, 2013 4:38 PM ETDVY, GLD, HYG, SHV, SLV, SPY, DBC164 Comments
Eric Parnell, CFA profile picture
Eric Parnell, CFA

I recently read an article on a business news website other than Seeking Alpha that sought to explore why people in the investment industry do not like the Fed's balance sheet expanding quantitative easing (QE) stimulus program. Given my strong disagreement with the content of the article, I was compelled to explore the real reasons why so many in financial markets have disdain for QE.

The Business Insider article that was also headlined on Yahoo Finance was baffling for several key reasons. First, in trying to explain why certain investors do not like QE, the author never bothered to talk to anyone who actually feels that way. Instead, the author decided to contact the likes of Paul Krugman to try and understand the scorn for current Fed policy. Thanks for the perspective, but perhaps the author should have entitled his article "Why People Who Love QE Think People Hate QE." Of course, such an approach does not answer the underlying question at all. Thus, a great deal of clarity on this point is needed.

One key topic needs to be clarified right up front. Just because you dislike the Fed's approach to monetary policy DOES NOT mean that you hate Ben Bernanke. I'm not sure when we arrived at the point in this world where people could no longer come together and engage in vigorous debate on policy differences without having to personally dislike each other. In fact, I have a great deal of admiration for Chairman Bernanke and his service to our country, as I do not envy at all the burden of responsibility that he has had to carry over the last several years in trying to carry out what he believes is the best course of action in trying to guide the global financial system out of what was the worst financial

This article was written by

Eric Parnell, CFA profile picture
Chief Market Strategist, Great Valley Advisor Group and Assistant Professor of Business and Economics, Ursinus College

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