There May Be No Exit From QE: Malmgren

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Oct. 28 (Bloomberg) –- Principalis President & Founder Pippa Malmgren discusses the possibility the Fed may begin tapering in March of 2014 with Mark Barton on Bloomberg Television’s “Countdown.” (Source: Bloomberg)


There may be no exit from qe, you say.

At think we have to consider this possibility.

After all, janet yellin's basic position is that if there is a tightening of monetary conditions, and we have to stop.

Every time they announce 50 taper, we get a tightening of monetary conditions.

It is a catch-22. what is the alternative, then?

It is designed to create inflation.

We are starting to get it heard that is what they want.

In a way, they have to have an excuse to get out and maybe the excuse has to be when inflation rises to level that it has to be addressed.

That is years away.

Is her way of telegraphing it to the markets without them reacting as he did in may or june?

No, because if one of them comes out of bed in the morning with a different pair of socks on, the market starts reacting.

The sensitivity is immense.

I think the federal reserve is for distressed about this.

They are annoyed at the financial markets keep reacting so severely.

But that is what markets do.

There's a disconnect.

If the economy shows signs of improving, surely that should be enough to calm markets.

But we are not there yet, are we?

What you think of the jobs numbers?

Even without the shutdown, it wouldn't have precipitated any change in qe, wooded?

No, because we're shipping from -- we are shifting from bernanke to yellen, who cares much more about wages.

How much inflation is she going to allow?

This is a good question, but she is prepared to let the inflation rate to above average for as long as -- the point is since it has been below for so long, she is reasonably cool about letting it go about for a while.

Today in the "new york times," there is a great article on this.

Maybe inflation is good.

Is a good thing or is it not?

Either way, what does it mean for asset rices?

Should there be a level of four percent?

If you're a pension fund, the difference between two percent and four percent is immense.

For an individual, the jump from two to four is massive in terms of the squeeze on your cost-of- living.

The degradation of your living standards.

Should we be reallocating our assets?

Should we be planning ahead of a yellen chairmanship of the federal reserve even though she has not been approved yet?

We have a number of them.

There's something called shrinks laois and.

Golden wonder potato chips, crisps as you call them in the uk, there half aaron only 11 ships.

They're giving you less the charging you the same price.

That is inflation, it is margin protection.

The last time you're in is a 11 of the government shutdown.

You are good because you did say, look for mother going to be ok, but get ready to which is this again and again and again.

He still stand by that?

Seriously, we've got this just committee which convenes this week, doesn't it?

They have to come back and report on something by december 13. december 13, would anybody be doing any work going into christmas?

That tells you already that we are not really going to have a deal.

Willis good on the same way though?

The same way.

The january and february deadlines?

For the budget, for the government shutdown in the debt ceiling we're going to come to again?

We will have the same impasse.

This will be going on into the next presidential election.

What damage would do to the economy?

There are those people who would say look, the economy works perfectly well even when the government shutdown.

So do we really needed?

You can look at it both ways.

Yes it creates uncertainty, but we have been here before.

This is only the 18th time this is happened.

The market can withstand this for a while.

I think the longer it goes on the more problematic it will be.

If it goes on for a year, i think that people will start to feel indigestion.

If it is this earlier.

, people shrug it off.

We are going to talk about the eurozone.

This text has been automatically generated. It may not be 100% accurate.


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