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QE2 Failed to Boost U.S. Spending, El-Erian Says

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June 02, 2011 – Comments (5)

No surprise at all

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QE2 Failed to Boost U.S. Spending, El-Erian Says: Tom Keene
By John Detrixhe and Tom Keene - Jun 2, 2011 9:45 AM ET

http://www.bloomberg.com/news/2011-06-02/fed-s-qe2-failed-to-boost-u-s-spending-pimco-s-el-erian-says-tom-keene.html

The Federal Reserve’s quantitative easing policy failed to meet the “ultimate objective” of boosting employment and economic growth, said Mohamed El-Erian, chief executive officer at Pacific Investment Management Co.

While the bond-purchase program pushed investors into higher-yielding assets such as stocks, the “transmission mechanism” to lower unemployment by driving more money into the economy didn’t work, El-Erian of Pimco, the world’s biggest manager of bond funds, said in a radio interview on “Bloomberg Surveillance” with Tom Keene.

“If success is defined in terms of the ultimate objective, which is pushing up valuation in order for people to spend more on goods and services and therefore get the economy to grow and unemployment to come down rapidly, then the answer is no,” El- Erian said from Newport Beach, California.

5 Comments – Post Your Own

#1) On June 02, 2011 at 12:50 PM, leohaas (31.42) wrote:

Just imagine how bad things would have been without "QE2"...

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#2) On June 02, 2011 at 12:54 PM, Borbality (46.93) wrote:

Agree with Leohaas. What would news of deflation (or at least non-mega inflation as predicted) do to precious metals?  

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#3) On June 03, 2011 at 9:59 AM, miteycasey (30.42) wrote:

Trickle down economics does not work.

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#4) On June 03, 2011 at 10:09 AM, tdoodler (25.06) wrote:

leohaas is right!!! 

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#5) On June 03, 2011 at 10:52 AM, outoffocus (23.12) wrote:

I agree with miteycasey

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