This evening I was perusing FT's Alphaville blog and came across a great piece written by Mohammed El-Erian. The PIMCO Chief Investment Officer breaks down Bernanke's speech from Jackson Hole.
Link:http://ftalphaville.ft.com/blog/2010/08/27/328906/el-erian-how-to-read-bernanke%E2%80%99s-jackson-hole-speech/
Some questions for the FED
El-Erian alludes to some great points....
1. Is the FED over-estimating its 'grip' on the U.S. economy?
2. What happens when Treasury purchases become the new norm?
3. How does the FED's current monetary policy measures stack up against those of other central banks (ECB, BoE, and BoJ)?
4. The main question that trumps all, is the FED comfortable maintaining a $2 Trillion Balance Sheet over the next 10 years?
4a. If yes, will Quantitative Easing become the new tool to re-inflate economies?
Seems to me 'Helicopter Ben' did his homework on the lost decades in Japan.
Patrick M. Ambrus
Analyze Capital LLC
Twitter: AnalyzeCapital
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