From Paul Singer of Elliot Management:
"It
is critically important for investors to try to understand what global QE is
actually doing, where it may lead, and what will happen when it slows, stops or
shifts into reverse. What we urge most strongly is that the current atmosphere
of calm and stability, and the lack of virulent inflation, must not be relied
upon to continue forever. There are certain words and phrases in official
communications that give some hint of the uncertainty that exists about key
elements of central-bank policies: confidence, anchored inflationary
expectations, and velocity are prime examples. Our takeaway is that when
investors lose confidence in ZIRP-soaked, QE-ridden, faith-based paper money,
the consequences could be abrupt and catastrophic to societal stability. We do not know exactly what to do
about it, except to urge policymakers to STOP substituting QE for sound tax,
regulatory, labor, environmental, and fiscal policies."
I add: There are no free lunches...unless you are TBTF
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